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The introduction of new products in FMCG and the three crucial moments in the launching process
Manufacturers with a new product, a market opportunity or a new concept
are smart if they first run these ideas by a few retailers they know well
enough to trust. If they do, responses are generally confusing.
Outspoken enthusiasm in this mini research usually opposes downright rejection.
The interpretation of the squarely opposing opinions makes it a complex issue.
The fact that all view points of the consulted retailers are 'waterproof' increases the complexity. Go or no go.
In their explorations, manufacturers usually weigh the positive feedback heavier than the negative response.
Rejection based on communication content
The second situation occurring too often is directly linked to not having the right category view supporting the introduction.
Many introductions at head office are rejected there in lack of the right 'language'. In what retailers call 'manufacturers language'.
Language failing to sufficiently convince the retailer about the benefit of the new product and its role in his assortment.
From his standpoint he feels that the product should first prove its point with a colleague.
The event described here happened at a multinational.
A national account manager has an appointment with his largest buyer.
The stakes are high. It's about the launch of a new product. The multi million advertising campaign has already been
planned. The national account manager has done his homework perfectly.
Consumer acceptance ranks 8.5.
Loss of distribution: a sneaky process.
The introduction is presented strongly.
The account manager's story is rigged up with Nielsen, IRI, consumer research and Spaceman. Books full of facts and figures.
All footholes covered. Great powerpoint presentation. The major client just needs to say yes.
The presentation takes 45 minutes. Indeed, the client admits to all the
points scored. For there is no other option.
Then, after the final sheet, the client baffles the account manager by stating
"You're 100% right, but you don't get it."
Underestimation of the situation is the third pitfall.
The manufacturer has invested much time, money and energy in the development and launching of the new concept.
The marketing is right and Sales has set up sound distribution. Head offices support the product by promotions on the shop floor.
Advertising budgets are substantial and the Wheel of Retail is won. Then, out of the blue, the product loses distribution.
Mostly gradually. Not visible in the figures and invisible to account management until they notice buyers suddenly de-listing the product.
Fact of the matter is, retailers/buyers never de-list a new product without prior
signals. Months ahead, usually. On these moments the sails can still be trimmed effectively, if this is done in the right way. And done quickly.
Benefit of the doubt
Today it's about introductions of new products according to a process fully controlled by the manufacturer not allowing major retailers to back off.
Successfully launching a new product on the market becomes an ever heavier task.
Retailers are more skeptical every day. Good trade
relations that could tip the balance before are not meaningful anymore. They feel less 'obliged'. Nowadays the benefit of the doubt is rarely given. And if so, the time left for the product to prove itself gets shorter.
A swift introduction in the assortment, a successful introduction is only attained if everything is right and nothing is left to chance.
Bierman offers professional support on three crucial moments in the introductory phase
Based on many years of research on the performance of new products in Food Retail, Drug and Out of Home, we have marked off three crucial moments in the introductory phase. What can go wrong? And how do you intervene if it does?
The crucial moments are before, during and after the introduction.
- In the first phase, the moment right before the introduction, there is either a rough concept or a more developed one that needs testing. At this point manufacturers call us in for research on retail level. Research on the
viability of the (often rough) concept. The research show if the concept has potential and if so, how much. The research also shows what should be
done to ensure maximum chance of success.
- In the second phase, the moment during the introduction, the manufacturer has decided to bring a newly developed product on the market.
What is needed now are the best sales arguments supporting the introduction
-Bierman's Category View- and a perfect presentation. In this phase we are the sparring partner for the team conducting the introduction, or we coach the entire course from initial rough presentation up to the presentation of the category view at head office.
- The third phase spans the months after the introduction. The moment for the product to become self supporting is an extremely critical moment. Now it becomes clear how important it is to have the know-how of the
shop floor and how little retailers know about their own shop floor. The industry overlooks fundamental facts here as well. Many new products with turnover potential and substantial campaign support fail in this phase due to the lack of sufficient knowledge about the shop floor.
Together with our clients we have developed and conducted successful introductions.
We are closely involved in the development of growth strategies. We deliver analytical perfection.
Advise: have investigate your existing assortiment. A strength/weakness analysis.
We look with 'retail eyes' at the performance of your products.
Interested manufacturers can invite us for an exploratory exchange of ideas.
Calling in Bierman to support product introductions has six advantages:
- Through our ongoing contacts with all major retailers -at head office as well as at
the point of sale- we take the lead in developments in the field of retailing,
category management and ECR.
We are well informed about the decision making process of retailers and their motives.
- Bierman knows what information retailers need. And Bierman knows how to
translate this information into effective communication in support
of introductions. Bierman's category view. Not the manufacturer's language
that leads to frequent rejection, but retail language.
- Bierman has an extensive retail database with qualitative
data of all categories in FMCG. This retail database
has been built by us in 27 years. It enables us to provide
professional support for introductions in every category.
- The consumer shows paradoxical behavior. "What she says and what she buys"
are often two different cases.
Researching the consumer on shop floor level is of essential importance to
prevent bias in traditional consumer research.
Bias causes the failure of many introductions. Our techniques for research and interpretation
exclude the errors.
- Our good relations with major accounts -from shop floor to general management- enable us
to provide our category analysis quickly.
- After the introduction we 'pilot' the new product together with manufacturer
and account management to steer it through its most critical phase (6--12 months).
Click to FAQ:
eight frequently asked questions.
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