What to do when marketing is gifted a new product by R&D.
It’s not uncommon for R&D to develop products and then “throw them over the fence” for marketing to promote. This is a particularly common problem in Life Science companies because they are often run by scientists and engineers who focus on the technical aspects of the product, leaving the customer as an afterthought. These products have a high rate of failure in the market.
Here are some of the most common reasons why products, that aren’t designed with the customer in mind, fail:
The customer doesn’t perceive any need for the product;
The number of customers who need the product is just too small for the product to be profitable;
The product falls short of the claims or customer expectations so only a small number are ever sold;
Poor targeting — when there’s no clear idea of who the target customer is marketing typically targets every possible customer and dilutes the message by listing every feature and benefit in the hope that something will appeal to someone;
The product is revolutionary and requires a significant amount of customer education and market development which only becomes obvious after the product is launched and there is neither the will nor resources to support it for a protracted period of time;
The price isn’t set correctly because marketing doesn’t understand what benefits the customer values and is willing to pay for;
The timing is either too early and not all the pieces are in place for customers to adopt the technology (e.g. internet radio before broadband and 3G became widely available) or too late and competitors have beaten you to it.
Forcing yourself to go out and gather customer insight early on, at the product concept stage, means that you will have to address some of these issues in order to find the right customers to speak to.
You’ll need to define who the target customer is and what market segment are they in (e.g. for a cell analyser product, are they microscope users or cytometer users?). You will quickly discover how easy are they to find, how many of them have this particular problem, whether they will be willing to part with money to solve it and how much they will be prepared to pay.
If you’re in marketing and unfortunate enough to be gifted a product which hasn’t involved customer insight and feedback during the development process then you should go and speak to some potential customers as soon as possible. Customer research doesn’t have to be a lengthy, expensive process. Interviewing a dozen or so people from a cross section of people who you believe to be potential customers will help you begin to understand how the product might be received in the market and what the key obstacles to adoption might be.
For example, an established high content analysis (HCA) provider developed a bench-top cell analyser based on an existing platform with additional functionality so it could do cell counting, cytometry as well as imaging. When R&D first presented the instrument to Marketing, the specs were already locked down and the beta version was about to go out to testers. At this late stage, we set about trying to find a unique angle that would differentiate the product in an already crowded market for cell analysers.
The first thing we did was identify who we thought the customers might be and set up some focus groups to test the concept. The customers’ initial reaction was “we don’t want a hybrid instrument because it probably won’t do any one of these three things well”. The challenge was to find a customer problem that the instrument could solve in a differentiated way which didn’t call attention to it being a hybrid. Through the focus groups, we began to understand that cell biologists use multiple analysis instruments most during cell culture when they need to regularly check the health of their cells so this is where marketing recommended the company position the instrument.
The project highlighted how easily development teams can get wrapped up in the technology and lose sight of the customer. Customer research helped us to uncover a customer need and market position but the company could have gone to market much more quickly if the customer input had been there during the design phase. No retrofitted value proposition will be as good as one that’s developed from true customer insight.
How do you avoid this happening?
Customer insight is the key to developing and selling products that customers want and will pay for. To get this depth of customer insight, marketing needs to have a seat at the table at the start of the product development process. But it’s often difficult for marketing to become part of the development team unless the C-level management understands the value that marketing brings to new product development. To prove the value of early marketing input, it’s helpful to analyse all new product introductions over a given period of time and assess the level of customer insight that existed at the start of each project. In other words, was market research carried out to identify a customer problem and was a value proposition developed and tested with customers at the concept stage? There is usually a clear correlation between failure rates and the lack of customer insight which quickly becomes apparent. This type of evidence and the financial implications are very compelling to get senior leaders in the company to rethink how they approach product development and product launch
By involving marketing when talking to customers early in the innovation and product development process, you will develop the right products to meet customer needs, position them clearly to rapidly gain market share and ultimately reach the business objectives set out in the business plan.
This article is an extract from a podcast on Life Science Marketing Radio. You can listen to the full discussion between Chris Connor and Marina Hop by clicking on the link.
