Robert Shulman
Best known as the Shulman in the once prestigious, now defunct marketing firm Yan kel o vich Clancy Shulman, Robert Shulman is a marketing professor at Columbia University. He is also CEO of Markitecture, jkonieeting, research, and product development company. In 30 years of helping launch new goods and serv ices, Shulman has observed a trend that he calls the " new-product paradox. "
Q: So, what is this paradox?
A: We've done research where we talked to senior marketing executives. Eighty-seven percent of executives said that the future success of companies depends on introducing new products. But executives give themselves very mediocre grades at successfully introducing new products. That's the paradox.
Q: How many products fail?
A: The vast majority fail. Products are being rushed to the market and sidestepping the development process. That is the area in which the homework isn't done.
Q: Can you provide an example of a new product that failed and why?
A: One new product failure that everyone picked on is New Coke. All the facts are out there now that Coca-Cola didn't follow the process. One of the phases that I recommend is an in-environment test, as opposed to an artificial environment. A lot of Coke's testing was in a mall. If the tests were done in people's homes, it would have shown that the Coke wouldn't be a success.
Q: Why are new products a major factor in a business's growth?
A: We've spent the last 10 to 15 years cutting expenses, streamlining operations, reducing our costs, and outsourcing. The focus has now shifted because you can only ring so much out of cost reduction. There was a focus on product modification because it was perceived to be less risky. We've focused most of our attention on either reducing costs or leveraging the assets we had. What remains is the growth opportunity--the new product.
Q: How can companies successfully launch new products?
A: A disciplined process is likely to be more successful. Thoroughly investigate what's going on in the market so you can understand unmet needs. Identify a target market for the new product. Develop a product that would clearly differentiate you from any competition. Treat new products as you would treat any other investment. Set goals, and put the money on the table as a risk. Be patient.
Q: Why don't firms dedicate full resources to developing products?
A: New products take time to succeed. In companies, people who handle new products are often also handling existing products. If you have something tugging at you that is taking care of the bills, you would do that instead of focusing on what may pay off in a year or two.
Q: Can new products help improve the company's profitability?
A: We've looked at the impact of new products on corporate performance. There seems to be almost a [direct] relationship: Our hypothesis is that successful new products will enhance corporate performance. -Jennifer Vishnevsky
This story appears in the August 15, 2005 print edition of U.S. News & World Report.
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