When a new product hits the scene, how many people actually have to buy it before it’s considered successful? Not nearly as many as you think. From CPG Matters, an industry trade publication focusing on consumer packaged goods:
Only a tiny fraction of shoppers determine the success of new consumer packaged goods (CPG) product launches, says a new report from Catalina Marketing.
Based on the purchasing behavior of more than 41 million U.S. consumers, the report shows that on average, just 1.5%, or 1 in 67 shoppers, accounted for 80% of volume during a 12-month window following their introduction. The study, which examined 25 of the top product launches of 2010, also found that for line extensions, 63% of sales came from existing brand buyers, of which almost half of those sales cannibalized existing brand purchases.
“This report shows just how few consumers make or break even the most successful new CPG product launches,” said Todd Morris, executive vice president, brand development, for Catalina. “With such small shopper concentrations driving the success of product launches, it’s critical for a brand’s advertising and promotions to reach the consumers who are most likely to try and repeat.”
I really enjoy reading reports like this, because they shed so much light on what we do as coupon shoppers. When you see a great sale price on a new item, or a high-value coupon that motivates you to run out and try something new, obviously the manufacturer hopes that you’ll love it and continue being part of that 80% re-buying the product regularly once it hits the shelves.
LouiseT says
Several times we have had a very high value coupon – or even free – in our Sunday supplement for a new product. Yet the product wasn’t on the shelves of any store. I have been searching over a year for one particular product, still can’t find it, but the coupon continues to appear. I didn’t know it was targeted like this article says, so now I really wonder why we got the coupon; seems odd.