---
title: "P&G's Eight Principles and Methods for New Product Launch"
description: "In China, on average, two new products are launched every hour, and at least two products exit the market every hour. Whether it's a company with over ten billion in scale or a small workshop starting from scratch, new product launches are always a necessary path for enterprise development. New products carry hope and future, but once they fail, the cost is extremely heavy. According to statistics, in China, the average success rate for new product launches is below 5%, the typical duration of a new product is about nine months, and the average loss per launch is 15 to 50 million RMB..."
author: "New Distribution"
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published: "2015-10-24"
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# P&G's Eight Principles and Methods for New Product Launch

> In China, on average, two new products are launched every hour, and at least two products exit the market every hour. Whether it's a company with over ten billion in scale or a small workshop starting from scratch, new product launches are always a necessary path for enterprise development. New products carry hope and future, but once they fail, the cost is extremely heavy. According to statistics, in China, the average success rate for new product launches is below 5%, the typical duration of a new product is about nine months, and the average loss per launch is 15 to 50 million RMB...

In China, on average, two new products are launched every hour, and at least two products exit the market every hour. Whether it's a company with over ten billion in scale or a small workshop starting from scratch, new product launches are always a necessary path for enterprise development.
New products carry hope and future, but once they fail, the cost is extremely heavy. According to statistics, in China, the average success rate for new product launches is below 5%, the typical duration of a new product is about nine months, and the average loss per launch is 15 to 50 million RMB. In the United States, the success rate for new products is around 40%, with an average loss of 80 million USD per launch.
Facing a market full of opportunities and risks, international companies have successively conducted research and development on the rules of new product launches. P&G, operating in the fiercely competitive daily chemical market, regards the new product launch process as one of the most important workflows. Over the past decades, P&G has established a standardized new product launch process and has modified it three times to adapt to market changes. Market results show that the standardized process has significantly improved the success rate.
Globally, P&G's new product launch success rate exceeds 64%. In China, across more than 100 new product launches for 15 brands, the success rate is as high as 85%–90%. Consecutive successful launches have driven P&G's rapid growth. Through decades of practice, the rules of success have gradually been identified and quickly translated into specific workflows.
In practice, eight fundamental principles run through the entire new product launch process, and these eight principles have been proven to be key to the success or failure of a launch. So what are these eight principles?
Principle 1: Do not treat new products as the growth point for current year sales.
This is a critical strategic issue. A new product is like a newborn child; its value typically manifests after 12 months post-launch. Although it may bring some sales immediately after launch, if it is made part of the annual sales target, the rigidity of the annual target may lead to short-sighted actions to achieve the goal, such as:
1) Shortening preparation time;
2) Reducing necessary workflows;
3) Overlooking product quality and completeness.
For these reasons, new product launches are usually not used as a means to achieve annual targets, but rather as preparation for market growth in the following year.
This principle is the first principle of new product launches; violating it usually directly leads to failure.
Principle 2: Establish a customer value-oriented process.
The fundamental reason a new product succeeds is that customers find it more valuable or unique compared to competing products. Therefore, correctly identifying and defining customer value becomes the key to success.
In China, many companies' new product ideas do not originate from customer analysis but mostly from technology or personal judgment of the leader. Moreover, they are often not validated during the launch period. This leads to a mismatch between the product and customer value. For example, a company developed a product to remove fat from blood vessels for middle-aged men. Without careful research, it was launched. But after launch, it was discovered that most men did not believe they had fat in their blood vessels and typically did not get checked. Many people thought that a slightly overweight middle-aged man appears mature and steady. At that point, the product was already on the market, stuck in a dilemma, and ultimately failed, losing nearly 40 million RMB.
To avoid such problems, P&G explicitly states in its new product launch process that the essence of a new product is the product "concept," and the concept is customer value. In practice, developing the product "concept" is the first step in the entire new product development, and product development, advertising, and channel planning are all based on the product concept. To ensure the quality of the concept, a standardized seven-step concept development method was further established.
This principle has proven to be another key factor for successful launches.
Principle 3: Scientifically forecast sales before entering the market.
In P&G's launch process, there are four forecasts of sales for the 12 months after launch. Each forecast is based on quantitative market research data. Based on these four forecasts, the launch budget is further estimated. Practice has shown that the four forecasts effectively reduce the blindness of launch preparation and help reduce and correct erroneous decisions during the launch. Many companies, lacking scientific methods, often use simple extrapolation. For example, a company planned to launch a smoking cessation product. The leader thought: China has 300 million smokers; even if only 1% try the product, that's 3 million people. At a unit price of 100 RMB, annual sales should be 200-300 million RMB. But after launch, disappointment followed. Fewer than one in 100,000 tried the product, and two years of sales were only a pitiful 3 million RMB.
A marketing director vividly described this launch process as five stages: ecstasy → awakening → confusion → regret → punishment.
Principle 4: Establish an independent new product launch team with full authorization from senior management.
During the War of Liberation, Chiang Kai-shek personally commanded every battle, while Mao Zedong authorized generals in Yan'an, resulting in almost every battle being won within three years.
In China, traditional paternalistic and leader-centric consciousness leads many core leaders to interfere with major decisions in product launches. Due to their high positions and authority, their words often carry weight. Power often replaces scientific research and analysis, and failures mostly stem from such experience and subjective judgment.
To avoid such problems, P&G has established decision models based on market research for every key link in the market—concept, product complex, market complex, and sales complex. Typically, product launches are decided directly by the new product launch manager based on data. Senior management mainly plays a supportive role, providing help when resources and coordination are needed.
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