Your new product or service make take longer than you think for it to take off after launch, especially if it really is a new product or service.
Just how long? A chart featured in the 2013 book Unrelenting Innovation: How to Build a Culture for Market Dominance tells the tale. Its author, Gerard J. Tellis, is director of the Center for Global Innovation, the Neely Chair of American Enterprise, and a professor of marketing, management, and organization at the Marshall School of Business at the University of Southern California. Tellis has studied global takeoffs extensively. He defines “takeoff” as 2 percent market penetration.
And guess what? To achieve even a mere 2 percent market penetration, it typically takes more than five years. The chart breaks it down: In Japan, the mean time to takeoff is 5.4 years. In the U.S., it’s 6.2 years. In China, it’s 13.9 years.
OK. So why, in reading these numbers and knowing that they’re backed by professorial research, do Tellis’s reported times to takeoff still seem so . . . long?
One reason is that we are perhaps too brand-oriented when it comes to market penetration. In our heads, as consumers, we may instinctively think of takeoffs in terms of specific products, such as an iPhone or a Kindle. From Tellis’s perspective, this is the wrong way to look at it. “If an analyst focuses on the successful, individual brand that takes off rapidly, then he or she wrongly assigns too short a period of takeoff and wrongly raises the threshold for future products,” Tellis writes in the book. “So it’s best to research all the prior brands that were launched in the category.”
The examples he gives are all too familiar to business readers. MP3 players existed for years before the iPod; e-readers existed for years before the Kindle and iPad.
And yet . . . more than five years to takeoff still seems like a long time. That’s because our expectations are so skewed by these anomalous, brand-specific successes. In reality, it is extremely difficult for any new product to take hold.
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As Joan Schneider and Julie Hall of Schneider Associates, a firm that specializes in launches, point out in Harvard Business Review: “The consultant Jack Trout has found that American families, on average, repeatedly buy the same 150 items, which constitute as much as 85 percent of their household needs; it’s hard to get something new on the radar. Even P&G routinely whiffs with product rollouts. Less than 3 percent of new consumer packaged goods exceed first-year sales of $50 million — considered the benchmark of a highly successful launch.”
These numbers alone may explain why our expectations are skewed. So few new products crack the radar, that when they do, we remember them. And apparently — and wrongly — we remember them as “overnight successes.”
Schneider and Hall’s HBR article includes an amusing sidebar about new-product failures. “These products, launched ‘successfully’ from 2002 to 2008, disappeared within two years,” they report. The list includes: Coca-Cola C2, Colgate Simply White, Hershey’s Swoops, M&M’s Mega Chocolate Candies, Oral-B Brush-Ups, Pepsi Blue, and Pepsi Edge.