Countless new products are launched every year - but how innovative are they? But how can this be measured? According to modern market research, there are several aspects that are decisive for the degree of innovation of a good product. Therefore, the degree of innovation of a new product can be measured using a few parameters that we have compiled for you:
- Relevance for the customer
An innovation should satisfy the customer's needs in order to be successful. If the customer does not like the product, then it does not bring any real benefit. This is why many companies start with the customer first when developing their products. To this end, many companies take an iterative approach to product innovation, often using design thinking processes and then testing their products fairly quickly with customers.
- Unlike the competitor
A product innovation must clearly differentiate itself from the competition. This requires at least one unique feature that sets a company apart from the competition. This should also have a decisive and high relevance for users or customers. This can be seen particularly well with the various smartphone providers: Apple focuses on design, Samsung wants to differentiate itself with a folding phone, while Chinese providers such as Huawei or Opodo want to differentiate themselves with technical refinements.
- Product benefits are visible at first glance
New products must also be accepted and embraced by customers. Innovations sometimes have a hard time - not only was the invention of the car or the internet initially dismissed as a negative development, but also the invention of the ATM, for example. When one was first installed in the 1930s, it was not used at first. In order to accept new products, customers need to change their way of thinking. This rethinking takes time. That's why it makes sense to carry out an information campaign - such as the introduction of QR codes for deposits.
- Uncomplicated operation
A new product must be easy to test and try out. A customer must be able to experience the benefits directly and immediately. This is what ultimately made the iPhone so successful, as it was the first smartphone where everything worked smoothly. The so-called Segways, on the other hand, were doomed to failure. They were simply too complicated to operate for them to become popular with the masses.
- Simply change
When customers discover a new product, switching from the old to the new product must be simple and straightforward. The customer should not have to go to any great expense and does not want to take any risks. For example, there is still skepticism about switching from a combustion engine to an electric car. Customers wonder whether there are enough charging stations and whether it won't take too long.
- How much money do I earn?
Numerous product innovations require a "warm-up phase", sometimes lasting several years, until they generate sales and the price/performance ratio is appealing to customers. New technologies also play a role in the assessment of earnings prospects. If a product quickly becomes obsolete again, it will generate little revenue. This is a stumbling block for many companies, especially when developing software. Or a product suddenly becomes obsolete because another one can perform the same function. This is the case with navigation devices for cars, for example, which today mainly run on smartphones and on-board computers.
- Avoid cannibalization
When new products are launched repeatedly, there is an increased risk that they will displace other products that have already been launched. This can also happen if, for example, new brands are added to the portfolio, which then cause the existing ones to fade away. This cannibalization should be avoided, even if it is quite possible that the new product will still generate a higher margin. Another prominent example of this is the iPhone: Steve Jobs knew at the time that he was cannibalizing the iPod with the introduction of the iPhone, even though it was generating good profits.
- Does the product match the brand?
A new product should fit in with the brand positioning and the company's values. Before launching a new product that deviates from the existing portfolio, it is therefore important to ask yourself whether there is a match with the brand world at all. One company that does this very well, for example, is Dyson. It has produced vacuum cleaners and then also drying appliances - all of which fit the company's DNA and were highly successful. To find out whether a new product really suits the company, there are now online market research tools that can be used quickly and cost-effectively.
- Resources for production and marketing
It is becoming increasingly common for companies to work together on a product innovation, with everyone contributing a share. It is easier to innovate by pooling resources, as someone can contribute the technical components and the other the means of production. The sales and marketing channels can also be expanded with different partners.
- Have the courage to take the product off the market again
If a product innovation proves to be a slow seller and a flop despite all the evaluation steps, then a company should have the courage to take it off the shelves again. In today's market environment, it is no problem to take a product off the market again, as the flow of new products has become so great. No one is losing any sleep over it.
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