The product development process is full of challenges, and to boost your chances of success, it is critical to have an excellent plan in place. Don’t believe us? Take a look at these three surprising product development statistics.
1. Of 7 product ideas, only 1 idea will yield a successful product
According to data from the McKinsey Global Institute, for every 7 product ideas, only 1.5 launch, and only 1 succeeds. Of course, not every idea will yield a successful product. That is why effective brainstorming is so critical — you need to come up with a variety of ideas and approaches to the same consumer problem in order to up your chances of finding that golden idea that could actually turn into a viable, profitable product.
2. For every 7 new product ideas, only 4 enter the product development stage
Not all product ideas are good enough to make it to the development stage, and that isn’t necessarily a bad thing. Before you move to the development stage of things, you need to make sure that the idea is profitable. How can you do that? Well, you will need to rigorously validate your product and conduct a comprehensive economic analysis.
3. New products have a failure rate of 25 percent to 45 percent
You may have heard that 80 percent of all new products fail. Well, put simply, that is an exaggeration. It is difficult to pinpoint a precise, across-the-board product fail rate, but the McKinsey Global Institute puts the number somewhere between 25 percent and 45 percent. The rate does tend to vary by industry. While the rate is lowest in the capital goods industry (35 percent), it is highest in the consumer goods category (45 percent).
According to a survey conducted by Copernicus Marketing Consulting and Research, the most commonly cited reasons for product failure include a failure to assess market conditions accurately, targeting the wrong group, a poor configuration of product attributes and benefits, poor pricing strategy, lack of consumer awareness, unrealistic forecast of the revenue, and poor marketing plan implementation.
Pivot International is a product design, development, and manufacturing firm with strengths in software development, electrical engineering, mechanical engineering, and industrial design. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.