The downside and bitter truth of this development is that 70-80% of all product innovations fail,
which leads to an annual failed investment of more than 12 billion USD, as pointed out by GfK
2 and
Harvard Professor Clayton Christensen
. The major reason for failure, according to Dr. Ken Hudson
,
is that ”new products do not excite customers and retailers“, because companies misunderstand
consumer needs and the problem that the product is allegedly solving.
The lesson is that in a world in which companies can now develop almost any imaginable product,
their success depends on how well they meet the deepest human desires of their target customers.
To better serve customers and mitigate the cost of failures, companies are spending more on market
and consumer research. The annual revenue of market research companies increased by 55% from
28.9 billion USD in 2009 to 44.35 billion USD in 2015