Six reasons to launch a new product now

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Twelve months ago, business was on a roll and the media was awash with stories of a booming economy.

Today, things have changed and businesses are returning to the time-honored downturn strategy: retrenchment.

Although on the surface it seems illogical, there's a remarkable argument to be made for launching a new product now. In fact, the risks associated with new-product introductions actually go down during a business downturn. Here's why:

• More buzz. At the time of your launch, there will likely be fewer competitive new products. You can get more attention from vendors, channels, customers, prospective employees and opinion leaders. The company that goes against the tide gets the buzz.

• Improved margins. Larger margins on new products can offset the squeezed margins of established products.

• Customers will like new options. During a downturn, buyers become more selective. They look for new options, especially the ones that make their operations more productive.

• It will engage your suppliers. Suppliers are already dealing with cutbacks. A promising new product will get a larger share of your vendors' support. And vendors are more inclined to take an alliance stake in your new product and co-develop it.

• It will energize your distribution channels. Distribution partners are facing lower margins, too. A major new product represents the best of both worlds—the potential for increased volume and good margins.

• You can emerge from this downturn with broader product lines, more channel strength, added market share and a running head start on the recovery.

If all of this seems too good to be true, consider this. These companies got their start during economic slumps: Federal Express Corp. (1973), Microsoft Corp. (1975) and Gannett Co. Inc.'s USA Today (1982).

A remarkable innovation in the corporate jet business began during that industry's 1986 slump. Corporate jet sales were off by 33% when NetJets/EJA announced the radical idea of shared jet ownership. By the time Berkshire Hathaway Inc. acquired the company in 1998, NetJets was generating $975 million in annual revenues. Today, NetJets continues to lead the piece of the jet industry it spawned.

So have your team refine their best new-product ideas. Research the value propositions carefully. Evaluate the business cases as if you were investing venture capital. For any proposition that passes muster, prepare to lead your category with a killer new product.

Al Eidson is the president of Eidson & Partners, a marketing firm that specializes in new-product introductions. You can reach him at

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