The Global Consumer
It’s a small world after all: On the global stage, two out of every three products are destined to fail regardless of what country they originate. What’s more, more than half of all launched won’t sustain their year-one sales performance during the second year.
Extinction and sophomore slumps: Sounds like a doom-and-gloom forecast, but if you’re a marketer harboring a well mapped-out plan and vision for long-term success, it doesn’t have to be—more like a call to action. The state-of-the-new-product was one of several compelling findings gleaned from “Every Breakthrough Product Needs an Audience,” a Global Survey Report by The Nielsen Co. The new product deep-dive encompassed insights from surveys of more than 29,000 online consumers in 58 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America.
The survey uncovered current consumer sentiments pertaining to purchasing new products, details about which product categories enjoy the most interaction, and examined media and other information sources influencing new-product purchase activity.
Nielsen found that new products driven by a true rather than perceived consumer need likely stand the best chance to achieve staying power. The downside: Not executing properly means disappearing from retail shelves within the first three years of introduction. To wit: The research shows that more than one-half of all products launched will not sustain year one sales performance in year two.
Nielsen stressed that savvy marketers may already be one step ahead of the game. Two sometimes overlooked factors hold sway: A multi-faceted messaging platform in the quest to meeting consumer “emotional factors” can’t be underestimated. Both often serve as critical determinants as consumers process purchasing decisions. “Value, variety, proof-of-concept and familiarity resonate most with consumers worldwide when thinking about buying new products,” the report states.
Wide, Wide World
And “worldwide” is certainly becoming an operative word: The Nielsen study discovered unique tendencies of consumers around the globe. Consider:
Pliable people: Latin Americans are eager to try new-product options, with 80% of respondents agreeing they like when manufacturers offer new innovations, compared with the global average of 63%.
Fear factor & capricious: Europeans and North Americans show the most trepidation when sampling new-product innovations. Less than one-quarter (23%) of respondents in Europe and 29% in North America consider themselves early purchasers of new products. Likewise, economic uncertainty continues to take a toll on respondents in these regions as they claim to be less likely to pay a premium price for innovative new products compared to respondents in other regions.
Roughly three-in-10 Europeans (28%) and North Americans (31%) agree to pay higher prices. However, they are more likely than their regional counterparts to switch to a new brand. More than half of Europeans (56%) and North Americans (57%) are willing to make a switch, compared to the global average of 45%.
Thinking local/global: Asia-Pacific respondents are most likely (62%) to wait until a new innovation has proven itself before making a purchase decision. One-quarter (26%) of Asia-Pacific respondents don’t prefer to purchase local brands over large global brands, compared to 23% globally. North Americans pledge the most allegiance to local brands, with 47% opting for local versus global options, compared to 40% in other countries.
Spread the word: Middle East/Africa respondents are the most vocal about new product experiences. Sixty-seven percent say they like to tell others about the new products they purchase, compared to 59% globally.
Consumers Dig in Heels
Looking at consumers all-inclusively, 60% indicate they will wait until a new innovation has proven itself before making that purchase. Economic factors clearly play a role in this decision process, as 45% of global respondents agree economic conditions make them less likely to try a new product and four-in-10 (39%) are willing to pay a premium price.
Six-in-10 prefer to buy new products from brands with which they are already familiar. Further, the price-value equation remains particularly important as 64% of global respondents say they will purchase a store brand or value option.
Of course, the articulation of value, variety, proof-of-concept and familiarity all need media platform support to seal the buying deal. Along these lines, Nielsen found a mix of media and word-of-mouth advertising garners the most success in raising consumer awareness. In-store discovery (72%) tends to be the largest driver of new-product awareness. Television (59%) and print (54%) advertising are leading influencers as well.
Of the 21 methods reviewed in the study, the advice of family and friends (77%) is the most persuasive when looking for information about new products. Other top methods around the world include receiving a free sample (70%), searching the Internet (67%), and professional/expert word-of-mouth advice (66%).
On the electronic delivery of messages, consumers increasingly find the Internet and mobile devices compelling vehicles to obtain information about new products. The Web remains an undeveloped tool when making a new-product purchase decision for food and beverages; according to Nielsen, 62% of global consumers check out these categories on the Web, with personal hygiene at 62%, personal health/OTC medicines at 61%, and hair care at 60%. The online respondents in Asia-Pacific, Latin America and Middle East/Africa were the most engaged in Web-based commerce, Nielsen reported.
For a look at the entire study, visit http://www.nielsen.com.