Most companies fail to successfully position their new products in the market. As one of our Global Pricing Studies showed, almost three out of four new products fail to meet their profit targets. These problems are self-inflicted and thus curable: Pricing and marketing need to be the top priority of the innovation process. By far the best and often the only way to overcome price pressure is through new products, as 77 percent of the responding managers confirmed.
Pricing and marketing need to be integrated from the get-go
Successful companies fully incorporate marketing and pricing throughout the innovation process, from the product inception to the market launch. An example of what NOT to do: After years of developing a product, a client approaches us a week before the product launch with the question: "Could you help me to find the right price for my product?"
Make the innovation process and new product pricing C-level priorities
The main difference between companies that succeed and companies that fail is essentially how they look at new products. The successful ones focus on value, always looking at their products from a market or customer perspective. The CEO sets the tone in this process and is closely involved from the start.
Make sure that you have at least one pricing/marketing expert in each new product team
This is a simple rule of thumb that will help you ensure that your product doesn't end up being over-engineered or impossible to sell.
Allocate a budget ahead of time to measure customer value and willingness to pay
You can't make something out of nothing. Even for extremely long innovation cycles that take several years, the most successful companies set aside the necessary budgets early on (e.g. life sciences).
Every now and then, take part in product milestone meetings
We don't mean a surprise visit, but one that's been announced ahead of time. Such a visit has an enormous impact on the team: The CEO is interested, the project gains importance, the team gets attention everyone gives their all.
Annual New York Growth Strategy Forum
June 1, 2017 | New York, NY, USA