Understanding and predicting new line extension success
The practice of capturing more business and growing brands through launching new products continues to reign. Thousands of new consumer products are launched each year, equating to a new launch every two minutes in the United States. A common belief is that 80% of new products fail. While the actual failure rate is much lower at 40%, success is rarely guaranteed. Brands make decisions about allocating resources to shorten the odds of success, but these resources are often limited, and priorities are needed. This leads to two broad questions: 1) ‘How do successful new products perform?’ and 2) ‘When are they more successful?’.
This thesis documents the success of new line extensions (NLEs) on key performance indicators and investigates key marketing conditions in NLE success.
Understanding New Product Performance: A Descriptive Investigation Across Multiple Categories and Two Countries
Many manufacturers launch new products to maintain and boost performance, but the launch of new products is one of the riskiest and costliest activities an organisation can perform. New products can be great successes but there is mixed evidence examining new product launches and brand market share and category demand change. Although examining new product success is important, more research is needed to understand what to expect from new products, in terms of their performance, across different market, category and launch conditions.
