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3 Ways New Launches Sink or Swim

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Read more about sustaining brand success beyond launch.

Successful brands win with careful planning, not luck.

"Sales for 55% of new products begin to slide as soon as their second year in the market," according to a new report from Nielsen. "By year three, sales for 69% of new products have declined."

Buzz alone cannot sustain a new product launch long term as target consumers are continuously exposed to new products.

In such an environment it is not surprising that Nielsen found that, "among new products with declining sales, the majority see a sales dip of 30% or more following year one."

The Nielsen analysis derived three key insights into what separates a sinker from a swimmer:

1. Maintain Marketing

Marketing resources are often dialed down for new products in their second year, based on the erroneous assumption that sales will remain stable compared to year one. This is a critical error, Nielsen notes: "In reality, the brands that grow are the ones that keep their media spend constant [at least 94%] through the second year."

Once media spends are cut to 80% or below year-one rates, brands begin to significantly decline.

2. Keep Trials Going

Year-two growth also benefits from ongoing trials for new consumers; brands that succeed maintain at least 80% of their year-one trial levels.

3. Focus on Performance

No amount of trial and marketing spending can make a poor product succeed, Nielsen notes.

The analysis found that "new product concepts that don’t perform well on need/desire in pre-market research but launch anyway succeed only 41% of the time in the long term." Conversely, those that performed as expected posted a 70% success rate.

As a result, those companies that improve their concepts based on consumer feedback are more likely to see success.

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