Can a company insulate itself against new product failure? The global beauty giant L’Oréal has certainly tried. With the goal of winning one billion new customers over the next decade, the firm opened a global research center in Paris for the sole purpose of developing new hair-coloring, haircare, and hair-styling products. But just because an organization commits significant resources to new product development doesn’t mean its new creations will survive.
In 2002, L’Oréal partnered with Nestlé to create a line of nutritional supplements, called Innéov, meant to help with dry skin. In 2014, poor sales forced L’Oréal to withdraw Innéov and end the joint venture. Some analysts noted that the health claims made about Innéov were rejected by the European Union. In addition, this product was in a fairly new and niche category called "nutricosmetics," so potential market size was probably hard to predict.
L’Oréal’s global research center can help the company in what phase of new-product development?
Commercialization
Development
Idea Generation
Test Marketing
