Increasing Innovation Success

New Product Development has become even more challenging in an environment of fragmenting consumer tastes, changing technologies, accelerated product life cycles, and profit-impatient retailers. With fewer chances to get it right, new product launches must be sharply aligned against the needs of those consumers that will make or break the business in year 1 - the so-called "early adopters" that will drive initial success and ultimately mass market sales.

 

The Importance of Precisely Defining Early Adopter Targets

The general need to focus on early adopters is well understood, but most marketers fail to realize that this group is uniquely defined in each product category.  While individual consumers may be early adopters in multiple categories, there is no universal "early adopter" mind set.  Rather, early adopters differ from category to category, so the people first in line for the newest cell phones are motivated by category-specific drivers that are distinctly different from early adoption drivers in home electronics.

 

Understanding your category's unique early adopter drivers, and tailoring product development and marketing accordingly, are critical keys to a successful new product launch. Failing to do so can lead to the wrong choices around product, features, pricing and positioning, and to disappointing launch results.

 

Using Segmentation Insights to Personalize the NPD Process

The challenge companies therefore face is how to identify the early adopters for their product, understand their key drivers, and integrate these insights into everything from R&D to branding, and media planning to promotions. In one recent example, a leading gaming company used Personality^SM-based segmentation to find the early adopters for its next-generation product, and used the resulting insights to prioritize the product's feature set and refine its positioning to align with this key group.

 

The critical first step was to identify the fundamental consumer segments in the gaming category. Two in particular emerged as critical early adopter segments, comprising less than a third of the target gaming population, but estimated to account for over 70% of year 1 sales.

 

In-depth profiling of these segments revealed very different product/feature needs as compared to the broader population, both in terms of game-related features (e.g., game genres, online gaming, downloading capabilities, etc.) as well as multimedia features such as DVD capabilities, video & music streaming, and messaging. The company used these insights to prioritize feature development, ensuring that critical investments in the first generation of the product aligned against the current top needs of these key segments. Segmentation-specific insights also provided a roadmap for future product iterations, by identifying secondary needs of the early adopter segments and the broader needs of "mass market" segments.

 

Expanding the segmentation internationally then revealed early adopter differences by country, facilitating more effective marketing in each launch market. These included differences in emphasis on "pure gaming" vs. multimedia capabilities in the US vs. Europe and Asia, which were integrated into local branding and launch marketing to personalize the product to each geography's early adopters.

 

The results? First-year sales and subsequent sales for the product have been strong and the company is now enjoying a series of successful release cycles that continue to use segmentation-driven insights to ensure product design and marketing efforts are personalized to key targets.

 

Product Design in Your Company

What does a company need to do to personalize its product launch strategies to the early adopters that matter most? The basic approach can be summarized in 3 key steps:

 

• Find the early adopters for your product by developing a category-specific segmentation that identifies the minority of consumers driving the majority of early demand. The segmentation should be specifically designed to reveal the distinct and actionable beliefs and preferences that drive brand / product choice and category behaviors, thereby separating early adopters from the mass market within your specific category.

• Profile their distinct needs via segment-scored, in-depth research focused on understanding desired product set, prioritizing feature choices, determining optimal pricing, and testing messaging around the product. Results for this research should be markedly different among early adopters than among the mass market.

• Integrate the insights into the business - this is for many companies the most challenging step. With the product development function often removed from the "front lines" and marketing efforts often focused on tactical elements, businesses must make a concerted effort to ensure that insight informs execution. This will typically involve not only leadership and support from the most senior levels, but dedicated launch management using incentives, milestones and metrics explicitly tied to successful early adopter penetration.