Testing New Products in FMCG Industry

Testing new products is a critical aspect of the FMCG industry, particularly in the fast-paced world of consumer goods. Based on my extensive product marketing and development expertise, I want to emphasize the importance of thorough testing and highlight key considerations to maximize success. Did you know that approximately 80% of new product launches fail to meet expectations?  Yes, that's right.  Only a mere 20% manage to achieve their desired goals and resonate with consumers. These numbers clearly highlight the need for comprehensive testing to stack the odds in your favor. Research conducted by McKinsey & Company found that companies prioritizing testing and iteration throughout product development are 2.5 times more likely to achieve successful market launches. This statistic alone underscores the tangible benefits of a testing approach. When it comes to introducing new products, based on my experience, there are three main categories to consider, each requiring a tailored approach: Portfolio Optimization This involves refining existing products by adjusting in certain areas such as downsizing, upsizing, improving recipes, or optimizing packaging. Line Extensions As a popular strategy in the confectionery industry, line extensions introduce new flavors or variants to existing product lines. Careful segmentation and differentiation from the main flavor are crucial to avoid cannibalization and attract new consumers.  Implementing a thoughtful flavor strategy allows seasonal adaptation (e.g., a cinnamon bar during Christmas or a coconut bar during the summer), and continuous new flavors over the years keep the brand modern and appealing. Innovations This entails introducing entirely new products or ground-breaking offerings to the market. Innovations require extensive planning and often have longer development timelines. However, they offer the potential for significant market disruption and growth. When developing innovative products, it is essential to carefully analyze market needs, consumer preferences, and competitive landscapes. A study conducted by Nielsen revealed that consumer preferences and demands are evolving at an unprecedented pace. In fact, 39% of consumers actively seek out new and innovative products. This showcases the immense potential for success if you can deliver something fresh and enticing.  <h2 style="text-align: justify;">Approaches for Successful Product Development </h2>To increase the chances of success, conducting market research and testing throughout the product development journey is vital. This approach enables incremental optimization and ensures that the final product meets consumer expectations.  Testing should cover aspects such as flavor profiles, product form, packaging design, and even communication strategies. By gathering insights and feedback from target consumers, marketing teams can refine their approach and create a more compelling product offering.  Action Standards  Defining clear action standards is another critical aspect of testing. Action standards serve as benchmarks to evaluate the product's success and guide decision-making during development.  Establishing action standards based on measurable outcomes such as sales targets, consumer reach, taste evaluations, or desired distribution levels is advisable. Regularly assessing the product's performance against these standards helps identify areas for improvement and facilitates timely adjustments.  Learning the Competitive Landscape Additionally, staying informed about the competitive landscape and establishing benchmarks within the industry is valuable. This provides a reference point for evaluating the new product's performance and helps identify differentiation and market positioning opportunities. Collaborating with reputable market research institutes is highly recommended. A close partnership between the marketing team and the research institute allows for comprehensive and accurate data collection, analysis, and interpretation. The resulting insights and recommendations will be more precise and actionable by providing the research institute with detailed and high-quality input, such as target consumer profiles and specific research objectives.  In summary, testing new products in the FMCG industry is crucial for success. Companies can optimize their product offerings, maximize consumer appeal, and drive growth in an increasingly competitive market by implementing a comprehensive testing approach, defining action standards, and leveraging market research.     This article was contributed by our expert <a href="https://www.linkedin.com/in/melissa-zicchino/" target="_blank" rel="noopener">Melissa Zicchino</a>   <h3 style="text-align: justify;">Frequently Asked Questions Answered by Melissa Zicchino</h3> <h2 style="text-align: justify;">1. What are the key benefits of product testing before launching in the market? </h2>The key benefits of conducting product testing before launching in the market include the following: Identifying Potential Failures Testing helps identify any flaws or issues with the product, allowing the company to rectify them before the launch. This saves costs by avoiding launching a product that may fail in the market.  By validating the product's viability and appeal before mass production, companies can reduce the likelihood of market failure and financial losses. Optimizing Product Attributes Through testing, companies can gather feedback on various aspects of the product, such as taste, packaging, pricing, and communication concepts. This feedback helps optimize these attributes to enhance the product's appeal and increase its chances of success in the market. Generating Consumer Insights Testing provides valuable insights into consumer preferences, behavior, and needs. It helps companies understand how consumers interact with the product, their motivations for purchasing, and potential barriers. This information can be used to refine marketing strategies and tailor the product to meet consumer needs better. Establishing a Strong Brand Testing allows companies to build strong brands by ensuring the product meets or exceeds customer expectations. Companies can establish trust and loyalty among consumers and retailers by delivering high-quality products.  <h2 style="text-align: justify;">2. What are the common methods used for product testing in the FMCG industry? </h2>Generally, I have divided my test projects into two phases:  <ul style="text-align: justify;"><li>Qualitative Phase </li><li>Validation Phase </li></ul> In the qualitative phase, it is necessary: <ul style="text-align: justify;"><li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="1" data-aria-level="1">To understand first the market (local market understanding) where one wants to operate, which means collecting data (e.g., retail panel and consumer panel) </li><li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="2" data-aria-level="1">After that, we move on to taste testing, concept- and packaging testing </li></ul> Once the taste, concept, and packaging have been optimized and finalized, we proceed to the validation phase: <ul style="text-align: justify;"><li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="3" data-aria-level="1">With a Simulated Market Test (SMT), where the entire marketing mix can be tested </li><li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="4" data-aria-level="1">This phase also includes advertising research if the launch is accompanied, for example, by TV advertising </li><li data-leveltext="" data-font="Symbol" data-listid="2" data-list-defn-props="{"335552541":1,"335559683":0,"335559684":-2,"335559685":720,"335559991":360,"469769226":"Symbol","469769242":[8226],"469777803":"left","469777804":"","469777815":"hybridMultilevel"}" aria-setsize="-1" data-aria-posinset="5" data-aria-level="1">If the company already has test products available, store tests can be conducted. Test products are placed in selected stores (test- and control stores), and their sales performance is monitored through scanner data analysis. Additionally, consumer feedback can be gathered through in-store surveys or interviews </li></ul>   <h2 style="text-align: justify;">3. How can FMCG companies effectively gather feedback from consumers during product testing? </h2>POS surveys My best experience has been with POS surveys of test store buyers recruited directly at the shelf. Conducting on-site surveys with consumers who have purchased the product allows for real-time feedback and insights regarding their experience and satisfaction. Focus Groups  If this option is unavailable, the market research institute can help determine the target group. With the recruited participants, focus groups can be conducted: a small group of consumers who fit the target demographic, and discussing their perceptions, opinions, and preferences regarding the product can provide qualitative insights. In-home Usage Tests In-home usage tests could also be interesting.  Providing consumers with test products to use at home and collecting their feedback through structured questionnaires or interviews can offer insights into real-life usage scenarios.  <h2 style="text-align: justify;">4. What are the potential challenges or limitations of product testing for FMCG companies? </h2>Time Constraints Product testing can be time-consuming, requiring thorough planning, execution, and analysis. This can delay the product launch timeline, which may impact market competitiveness. Internal Processes and Decision-making The involvement of multiple stakeholders and decision-makers within the company can lead to challenges in coordinating and aligning their efforts during the product testing phase. Budget Limitations Conducting comprehensive product testing requires financial resources. FMCG companies may face budget constraints, especially if they must allocate funds for multiple tests, research methodologies, sample sizes, and data analysis.  Limited budgets can restrict the scope and scale of product testing, potentially affecting the robustness and accuracy of the results. FMCG companies must navigate these challenges and limitations effectively by carefully designing their product testing strategies, allocating sufficient resources, involving key stakeholders, and considering a holistic approach to gather actionable insights for successful product launches.

Premium Insights

Consumer Staples

Testing New Products : A Strategic Imperative For FMCG Companies

KR Expert - Melissa Zicchino

Beauty And Personal Care Trends

Exploring Controlled Environment Agriculture (CEA)..

Revolutionizing Agriculture with Solar-Powered Hyd..

IUVA Labs: Pioneering Animal-Free Dairy Solutions

Valuable By-products From Processing Agricultural ..

Testing New Products : A Strategic Imperative For ..

Core Services

Phone Interviews

Targeted Custom Surveys

Term Engagements

Executive/Board Placements

Consumer Staples

Testing New Products : A Strategic Imperative For FMCG Companies

KR Expert - Melissa Zicchino

Core Services

Phone Interviews

Targeted Custom Surveys

Term Engagements

Executive/Board Placements

Premium Insights

500+ multinational clients across all sectors

8,000+ global projects

353,000+ experts in our network

Businesses

Experts