ew products are the lifeblood of nearly everycompany’s growth strategy—and the sourceof enormous investments in development,research and advertising. Yet despite theseefforts, it’s undeniable that the overwhelmingmajority of new products fail. In fact, most

sources put new product failure rates at more than 80 percent—and fewer than five percent are considered clear successes, with$50 million or more in first year sales.

New product success is largely dependent on effective packaging.For established brands, many shoppers come to the shelf lookingfor the product—and the primary role of the packaging is toensure recognition that it is indeed the brand and product peopleknow and trust. New product packaging, however, faces adifferent (and far more demanding) set of challenges.

1. SHELF VISIBILITY (“UNSEEN IS UNSOLD”)

Without question, the most decisive driver of new productsuccess is shelf visibility (i.e., the likelihood that a product willbe actively considered by shoppers). Indeed, across our studies,we’ve seen a consistent and direct relationship between shelfvisibility and purchase levels.

This linkage should not be surprising: Despite advertisingsupport, the reality is that very few shoppers come to the shelflooking for a new product. Thus, new product packaging must“break through clutter” and force consideration.

This can be daunting, because new products often have limitedshelf space, perhaps two to three package facings within a “sea”of hundreds of products. In fact, our studies typically find thatnew product visibility is at 33 percent or lower.

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CONSUMER INSIGHTS

OVERCOMINGTHE ODDS

Five principles for packaging new products effectively.

by Scott Young

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It’s vital for new products to “embody a dimension”visually. A new structural delivery system, such as thisinnovative approach from consumer health product Alli, strongly signals innovation.

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This reality helps to explain why studies that are based onforced exposure greatly overstate sales projections for newproducts. They don’t take into account the fact that nearly two-thirds of shoppers will never even see and become aware of thenew product! Overall, most new product failures are not a resultof shoppers actively considering (and rejecting) a new productproposition. Instead, they are a function of new brands getting“lost on shelf ” and never being considered by most shoppers.

So what is the best way to maximize shelf visibility? The oneword answer is contrast. Visual contrast (relative to otherbrands on shelf) can come from several sources, which typicallyinclude color blocking, the use of unique packaging structure—and/or a very bold visual icon.

As a rule of thumb, color is the strongest tool—and the smaller thebrand, the more important it is to “own a color” on shelf.

While there is no “magic color” for creating contrast, wecan say that the best solutions often involve “breaking the

rules” of the category.

Wrigley’s 5 gum is an excellent example, as it brokefrom category norms of colorful packaging that

suggest flavor to “own” the color black within thegum display.

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PRS Eye-Tracking studiesconsistently find that “less is more”. Adding packaging claims reducesthe likelihood that a clearpoint of difference will make it through the clutter.

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2. DIFFERENTIATIONWhile it may be intuitive that a new product must be unique,we’ve found that differentiating (versus the competition) in anextremely clear, visible—and ideally visceral or emotional—manner is critical to success.

New products face a very difficult task in trying to change shoppers’ingrained behaviors and thought processes, often in low-involvementcategories. Given these barriers, a new product’s distinction has to beimmediately apparent. At a minimum, new CPG products/packagesmust pass the “five-second test.” They must convey a clear point-of-difference in this limited time frame, which is how long shopperstypically take to actively consider a package, before deciding whetherit should go in the shopping cart.

This fact points to another reason why many studies overstatenew product success. They are based on extended exposure tonew products, often in the absence of competitive options,which is simply not reflective of the shopping experience.

Of course, there are many strategies for differentiation, but the mosteffective start with truly innovative product propositions that “slice”categories in new ways and speak to shoppers’ underlying concerns.

For example, the success of the 100 Calorie Packs brand wasdriven by its unique delivery of an underlying consumer benefit(portion/calorie control) through innovative packaging.

When we observe shoppers in the aisle, we often see a “disconnect”between shoppers’ priorities and what these people encounter atthe shelf (a plethora of features/benefits, flavors and sub-branding). That’s why we find many successful innovations “breakthrough the clutter” by linking more closely to the shopper’smindset—and by speaking directly to specific usage occasions (e.g.on-the-go packs, packs designed for school lunches, etc.)

On a packaging level, it is vital for new products to “embody adimension” visually, by looking more premium (or more fun, ormore appetizing, etc.) than competitive brands. We’ve found thatstructural innovation is the strongest strategy across categories inthis regard; it is difficult to do this using just graphic changeswhen you are trying to differentiate on an emotional level.

However, a new structural delivery system (such as that for theconsumer health product Alli) strongly signals innovationupon an initial glance.

3. VERSIONINGA third challenge for new product packaging is what we call

“versioning,” which refers to working effectively within alarger brand family.

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Most new products are sub-brands or line extensions, whichmeans that they are typically “speaking” to brand users who areconsidering the new product in the context of what they normallybuy. As noted earlier, we’ve found that new products tied to usersand usage occasions are typically more intuitive to shoppers—andthus more successful at driving incremental purchases. Conversely,shoppers often have a more difficult time accepting premium lineextensions, and understanding “good, better, best” strategies.

With regard to packaging, new products involve a more delicate“balancing act” than entirely new brands. On the one hand,there is a need to leverage the equity of the established brand,which typically involves some visual continuity (i.e., the samelogo, color scheme, etc.). On the other, there is the need tovisually distinguish from the “base,” in order to drive visibility,awareness and consideration.

We’ve seen many companies err on the side of visualdifferentiation, by making new product packaging differ fromthe “base” across multiple dimensions (new colors, new brandidentity, new labeling architecture, etc.). The result has oftenbeen confusion—and a default to the familiar—as shoppershave not known how to define the new product (How is itdifferent from what I use today? Is it still right for me?).

This is particularly common when the labeling architecture, orplacement of information, on the new product packaging differsfrom that on the base brand. Shoppers can’t quickly compare thetwo packages—the new product versus the current product.

Often, we’ve found that the “right answer” is typically at least 50 percent visual continuity from current (to leverage brandequity), varying one primary design element (such as color orstructure) combined with a very clear emphasis on the newproduct’s point of difference.

In fact, it’s particularly effective when the new product nameitself conveys or embodies the product’s reason for being—andis visually accompanied by a brief “definition” that speaks to itsuse or importance.

The packaging of Tide Coldwater illustrates this point, anddoes a very good job of managing this balancing act betweenvisual continuity (via the familiar Tide logo) anddifferentiation (via the unique color).

4. REASSURANCEA fourth challenge for new product packaging is providingshoppers the key reassurances they need to make a newpurchase. Here, it’s important to remember that many shoppersare buying for others and a driving factor/consideration is thedesire to avoid making a mistake.

Of course, this dynamic works against new product trial—andit means that new product packaging has to work much harderto convey added value and provide needed information.

For marketers, this creates the strong temptation to fullyexplain new product benefits and include every possible claimon pack. However, when marketers try to “do too much” onpackaging, the result is nearly always self-defeating clutter.

In fact, our studies consistently illustrate the fact that “less ismore” in terms of packaging claims. Specifically, we find thatadding claims or messages does not drive higher packageviewing times. Instead, more messages simply compete for thesame four to five seconds of attention and reduce the likelihoodthat any single message will come through. It’s also dangerousto rely on the back panel for important information, becausein-store observational research reveals that only 10 to 15percent of shoppers consistently check back panels.

Of course, there’s no easy answer to this reassurance challenge,other than to approach packaging development with a clearunderstanding of the “hot button” issues within a given category.

In other words, it’s a matter of sorting and prioritizing the “needto know” information (potential deal-breakers) from the “nice toknow” information (additional claims). In our experience, we’vefound that most critical reassurances relate to compatibility (i.e.,Will it work with what I have today?) in technology categories andto users/usage (i.e., Is it appropriate for my child?) in othercategories, particularly OTC pharmaceutical products.

Perhaps most importantly, it’s critical to test new productswithout the benefit of extended concept statements orcommercials. For the shopper, the package is the conceptstatement—it is all that he or she is likely to encounter at retail.If the package leaves key questions unanswered, this must becorrected in advance, before it’s too late.

As a rule of thumb, color is the strongest tool to maximize visibility. Wrigley 5 gum broke from category norms of colorful packaging to “own”the color black on the gum aisle.

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5. PRODUCT DELIVERYA final (and often overlooked) challenge is for packaging tocreate realistic expectations about the product inside. It’s amistake to ignore this issue or to dismiss it as a productquality/delivery issue that falls outside the purview of thepackaging development or design team.

The reality is that when shoppers buy a new product, they arebringing with them a set of expectations created largely by thepackaging (visuals, claims, etc.). Their satisfaction (or lackthereof)—and their likelihood of re-purchase—is a direct

function of any “gap” between these expectations and theproduct delivery. Thus, as the old adage goes, the best way tokill a bad product is through a good package.

Of course, this is not an argument in favor of making lesscompelling, and perhaps more realistic, packaging. However, itdoes speak to the importance of being as descriptive andinformative as possible. In our experience, more direct, literalapproaches are less likely to confuse or mislead than moreabstract approaches in the treatment of primary visuals,naming/sub-branding, etc.

Perhaps more importantly, this issueillustrates the need to test newproducts holistically and from the“outside-in,” in a manner that mirrorsthe shoppers’ experience ofseeing/buying the packaging and thenusing the product.

Too often—and most notoriously withNew Coke—we’ve seen situations inwhich product testing is done on a“blind” basis, with terribly misleadingresults. Similarly, we’ve seen cases inwhich new product packaging wascompelling, but not consistent with theproduct proposition—and thus likely tosell only once.

INCREASING THE ODDSThe odds against new product successare undoubtedly high. Moreover, it’sclear that effective packaging (whichmeets the challenges of visibility,differentiation, versioning,reassurance and product delivery) isabsolutely essential, while weakpackaging can “break” even the mostcompelling concept.

Thus, if success rates are to improve,the single most important first stepwill be for marketers to recognize that“the package is the product”—andchange the role of packaging withinthe new product development cycle.

Today, packaging is often the last stepof an extended process, but after yearsof new product development andconcept testing it is likely to be rushed

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into several months to meet an introductory deadline. In thefuture, these elements must be better integrated, with a greateremphasis on shelf presence and packaging communication.

Secondly, significant improvements are needed with regardto how new products are tested. The research process needsto better replicate the manner in which shoppers actuallyencounter new products: as packages; on shelves; withincompetitive context; and without the benefit of explanations,commercials or concept statements.

Taken collectively, these changes reflect a fundamental shiftaway from an “inside-out” approach to new productdevelopment that is centered on the product and concepttowards an “outside-in” process that is focused on thepackaging as the driver of expectations and satisfaction.

The result will be a far more accurate sense of performance—and,I believe, ultimately a much higher rate of new product success. BP

Sub-brands and line extensions must leverage the equity of the established brand while still visually distinguishing themselves from the base. Tide Coldwaterdoes a good job of managing this balancing act betweenvisual continuity and differentiation.

The author, Scott Young, is the president of PerceptionResearch Services, a company that conducts more than 600 studies annually to help marketers develop, assess and improve packaging systems. Contact Scott atsyoung@prsresearch.com or 201.346.1600.

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