The Short Happy Life

New products are the lifeblood of U.S. business, but many a company in 1963 uses up a lot of its own lifeblood in the race to bring them out. Once, U.S. corporations had only to develop a few new products every year or so, confident that they would dominate the market long enough to show a healthy profit. No longer. Today's new products not only take more time, effort and money to develop, but face a far shorter life at the hands of the fickle consumer. There are plenty of companies to woo him; so many firms now have fast-moving research labs and trigger-ready marketing techniques that few new products are far ahead of competing copies or improvements. "Lead time is gone," laments Du Pont Chairman Crawford Greenewalt. "There's no company so outstanding technically today that it can expect a long lead in a new discovery.''

Lestoil Syndrome. Du Pont had the nylon market to itself for 15 years, and did well with Dacron too. But when it went into production of its tough new Delrin plastic--a breakthrough it considers as important as nylon--hardly two years passed before competing Celanese Corp. hit the market with an almost identical plastic developed by its own chemists. U.S. Steel recently developed a new, economical "thin tin" plate--only to find other steel companies out in six months with a thin tin that customers liked better because it gleamed brighter; Big Steel is now copying some of its competitors' gleam-making methods. Sunbeam's new electric skillet was imitated so widely that the market was saturated within a few years, and Squibb's electric toothbrush is getting the same treatment.

Rivals are so quick to follow in the wake of any successful product that smaller, weaker originators are frequently swamped. In industry, this is now known as the Lestoil syndrome because of the experience of Lestoil Products of Holyoke, Mass. Lestoil scored a hit with its liquid household cleanser and gleefully watched sales climb to $25 million. Then Lever Brothers followed with Handy Andy, Procter & Gamble with Mr. Clean; recently Colgate weighed in with liquid Ajax. Lestoil's sales have fallen to $16 million, and the company has had to stop paying dividends.

Britain's Wilkinson Sword Ltd. has had such success in the U.S. with its long-lasting stainless steel razor blades that American Safety Razor and Schick have produced copies, and Gillette is now preparing to assault the market. Finding themselves unable to keep up the pace against competitors with greater resources, some companies have chosen to sell their new ideas to larger firms. Even giant Monsanto, first into the market with a soap for automatic washers (All), eventually got out of the hotly competitive market rather than try to match the budgets of soapmakers.

Little Protection. Sometimes company research moves so fast that it makes a company's own products obsolete. Du Pont's Dacron is giving tough competition to the company's nylon and rayon, and Du Pont has decided to give up making rayon altogether. General Electric's recently announced silicon transistor will sell for half the price of its own germanium transistor.

Patent protection often means little; copycat firms know that a copied product may have spent its life cycle by the time lengthy litigation is finished. Westinghouse recently found a company copying its new hair dryer so exactly that even the instruction book was the same. In desperation, many inventive companies now license their competitors before they can copy, hoping at least to collect some royalties.

Companies that once simply devised a new product and then offered it to the public now go to the consumer beforehand to find out what products he wants designed, or old ones changed. Even such basic industries as steel, which once sold products only to fabricators, now try to recognize the uses new alloys or materials can be put to, and aim their research at end products for the consumer. Says Edward Green, vice president of Westinghouse Air Brake: "Companies must become more oriented not only to what the customer wants today but also to what he'll want five years from now."

Tribute to Vigor. In many ways, the short, happy life of new products is a tribute to the vigor of free competition, but it inevitably means a harder life for companies. Big companies often suffer a profit cut or even a loss on a new product that is quickly copied or improved upon, and even the copiers frequently cannot recover the expense of tooling and production before the product succumbs to newer, better or flashier things. The race to get to the consumer first has forced companies to shorten their product development time, and in some cases has actually made the product secondary in the sweat to sell it. Chicago's Alberto-Culver was so eager to beat Procter & Gamble's Head and Shoulders shampoo to market that it filmed the TV commercials for its Subdue shampoo even before it had developed the product.

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