Efficient Product Introductions – The development of value-creating relationships


Publication Date: 1999 Publication Language: English Publication Country/Region: ECR Europe Publication Type: Bluebook Companies involved: United Distillers & Vintners, Colgate Palmolive, Corc International, ICA, Tradeka/Valintatalo-Chain, Cardiff Business School, Bristol Myers, Kellogg, Procter & Gamble, Kraft Jacobs Suchard Author: Andy Adams, Paolo Borghesi, Malkolm Corby, Juliya De Soysa, Tapio Finer, Mike Francis, Alicia Gilmartin, Ben Hoelke, Phil Jarratt, Anne-Marie Kearney

by Ernst & Young (1999)

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According to this research, manufacturers spend as much as 8 to 16% of net revenues on innovation. Enormous numbers of new products are introduced to the market each year yet within 12 months most have failed. The challenge, and a key aim of this study, lies in knowing how to translate good ideas into successful new products.
The report reviews current practices in new product introduction in the European consumer goods industry, and recommends a new process for Efficient Product Introduction - EPI. The findings are based on a number of sources, including extensive data analysis made possible by the participation of AC Nielsen-Bases, interview-based fieldwork, and the involvement of an EPI Core Team representing major manufacturers and retailers across Europe. This is one of the most extensive projects of its kind to date.
The EPI process is not a "one size fits all" tool. Companies can choose to apply it either selectively or comprehensively. A comprehensive approach has the greatest potential to create brand and category value as well as cost savings, but it involves close collaboration between the trade partners which may or may not be realistic. A selective approach typically involves collaboration in step 4 (joint planning of product launch) and this alone can bring both retailers and manufacturers considerable benefits.
Test results from two pilot projects with European manufacturers and retailers in Italy and Sweden are reported. These projects demonstrate that the EPI process requires some investment in terms of people and time - especially when it is applied for the first time - and therefore requires full support from top management. But after the retailer and manufacturer teams involved have done it once, the lessons learned allow them to repeat the process more swiftly and efficiently in future cycles.