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14-01-2021

How common is new product failure and when does it vary?

Authors: Kirsten Victory, Magda Nenycz-Thiel, John Dawes, Arry Tanusondjaja, Armando Maria Corsi

Published in: Marketing Letters | Issue 1/2021

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Abstract

This study aims to explore how common new product failure is in consumer packaged goods (CPG) categories and investigate the conditions in which the new product failure rate varies. This study analyzes 83,719 new stock-keeping units (SKUs), which were introduced over 8 years (2002–2009) across 31 CPG categories in the USA. Failure is the permanent cessation of sales, which is measured in consumer panel data. We find that one in four (25%) new SKUs are no longer bought 1 year later—a rate that increases to approximately 40% 2 years post-launch. New SKU failure was more likely for new launches that were introduced into higher revenue categories and by smaller share parent brands. Our findings can be used as a resource to aid marketing practitioners’ understanding regarding how common failure is for new CPGs and when there is greater associated risk.

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Title: How common is new product failure and when does it vary?
Authors: Kirsten Victory
Magda Nenycz-Thiel
John Dawes
Arry Tanusondjaja
Armando Maria Corsi
Publication date: 14-01-2021
Publisher: Springer US
Published in: Marketing Letters / Issue 1/2021
Print ISSN: 0923-0645
Electronic ISSN: 1573-059X
DOI: https://doi.org/10.1007/s11002-021-09555-x

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