According to an analysis by Nielsen, more than three out of every four new FMCG products launched fail in their first year.1 The reasons behind the success or failure of a product are varied. However, a common precaution companies can take while conceptualizing a product is to gauge its product-market fit.
Across the world, some of the best companies are popular today because of their products and product-driven approach. This is quite evident in the case of companies such as Apple Inc, where 63% of the revenue comes from the iPhone alone.2 In the case of some other technology companies such as Facebook or Google, it is hard to imagine them as product based; however, what they build are products too. In fact, any company building or producing anything that satisfies a market need is a product-based company. Here are some key principles and concepts to be aware of when building consumer products. Although the focus is on consumer products, most of these principles apply to almost all other products too.
metrics and product-market fit
Most companies are aware of the term ‘product-market fit’ but do not have a systematic and mathematical way to assess it. However, it has a clear definition and can be measured from a consumer-product perspective. The first step to determining whether you have the right fit is to define what a churned user is. A churned user for any company is one who used to use their product but no longer does so. The exact definition here may be different for different consumer products. For example, for Facebook a churned user may be someone who has not visited the app for 28 consecutive days; for Apple, it could be someone who used to be an iPhone user but no longer uses it. Once ‘churn’ has been defined, product-market fit is visible simply by looking at the retention curves for each cohort of users. When this is plotted over time you get a graph similar to exhibit 01.
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Building A Quality Culture
A strong company culture defined by its values, beliefs, and behaviors, has a profound impact on its products and services. More so in today’s VUCA world, where to stay relevant and maintain a competitive edge, it is critical for organizations to build a culture that focuses on quality. Suresh Lulla, author of Quality Fables, elucidates through significant examples how creating a culture of quality is imperative to driving success and productivity.
Customers For Life
The history of General Motors in India can be traced back to the 1920s, when it became the first automotive company to set up an assembly plant in the country. The relationship since then has not been as fruitful as GM would have hoped. GM’s flagship brand, Chevrolet, was introduced in India to build upon the success of the popular Opel marque. However, success has been fleeting at best—an issue that GM India is determined to rectify. It aims to do so by adopting a two-pronged approach: using customer feedback to influence product development, and delivering a superior sales-to-service experience.
The Digital Shift
… technology will radically disrupt HR in the near future. Indeed, it is already changing the way HR works and the role it plays and opening the door to a new type of “digital HR” function.1 The rise of digital and social media is changing the dynamics of HR and creating new ways of hiring, engaging, and retaining employees.
The Story Of Telling
“The best brands are built on great stories,”* this remark by Ian Rowden best captures the strategy of diligent brand building. Much more than attractive logos or the products themselves, what builds a brand is how successfully a story is woven around it. Brand marketers have to be good storytellers indeed.
Complexity Is Simpler Than You Think
Kay Kendall and Glenn Bodinson, authors of Leading the Malcolm Baldrige Way, shatter myths about excellence models such as Baldrige and EFQM.
Proponents of Isolation Never Become Victors
Multilateralism in the political and economic space has always led to frameworks that favor the mighty. WTO was no exception. With agriculture kept out of its purview, it could never become a truly fair and free trading system. China was the only large emerging economy that exploited relative openness in low-cost manufactured goods to take full advantage of the system. Other emerging economies could at best garner minor gains.
A History Lesson (From Year One) for Trump and the Brexit Crowd: Isolationism Has Never Worked!
Professor Stephane Garelli on growing isolationism.
A Win-Win Game
Business is not a sport where some stakeholder has to lose or fare badly for others to do well. Building an atmosphere of trust and transparency between all stakeholders will help companies retain them even during adverse times.
A Sustainable Model
With a total market value of $4.3 trillion and an employment base of at least 1.3 million direct employees and millions of others indirectly employed, platforms have become an important economic force.*Companies today are constantly looking for ways to build platforms—Infosys Ltd announced its plans of monetizing its platforms to make them a $2 billion business by March 2021. But are all platform businesses successful?
Custom Made
…three in four consumers said they receive too many emails from brands, and one-fifth said they could not handle the current volume…69 per cent have ‘unfollowed’ brands on social media, closed their accounts or cancelled subscriptions.*In these times, when the market is flooded with products and services, the most efficent way to engage customers is to offer them customized content. To achieve this, brands need to focus on observing the nuances of individual preferences.
