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NEW YORK -- Retailers and manufacturers must collaborate more effectively to improve the chances of success when bringing a new product to market, according to a study prepared by PricewaterhouseCoopers (PwC) and released yesterday by the National Association of Chain Drug Stores (NACDS).
"Both manufacturers and retailers rely on new product launches to drive growth and help them stand out in a crowded market," said Lisa Feigen Dugal, partner and leader of the North American Retail and Consumer Packaged Goods Advisory practice at PWC. "Yet launches are often hindered by misunderstandings regarding each partner's expectations, abilities, and timetables, threatening revenue generation and profitability."
The report identified four steps to better new product introductions for both manufacturers and retailers:
- Understand: Eliminate preconceived notions of each trading partner and establish a joint definition of launch success beyond just sales/volume targets.
- Commit and Collaborate: Establish detailed milestones and success criteria, and assign specific responsibility and accountability for each element.
- Execute: Provide transparency to potential launch issues, and develop contingency planning in advance for likely scenarios to avoid overreacting to expected events.
- Review: Sales performance is not the only measure of success. Devoting time to post-launch analysis establishes a common perception of the launch effectiveness.
The partners will present more details about the study at the upcoming NACDS Supply Chain and Logistics Conference on March 27, 2007 in Orlando, Fla.
The National Association of Chain Drug Stores represents retail chain pharmacies and suppliers.