Production Management

8 Factors Responsible for Failure of New Products

Before starting the production of the product at a commercial scale, test-marketing of the product should be made so that the market response to the product may be observed carefully. The development of a new product is always not successful. There may be one or more following reasons responsible for product failure:

Factors Responsible for Failure of New Products

1. Inadequate market analysis. Biased marketing information or improper analysis will yield only wrong data. Acting on such data leads to product

2. Product Limitations. This arises out of technical flaws in the process of production. This is a fundamental reason for product failure. Inadequacy in products, to a large extent, are got rid of by proper product testing.

3. Higher Production costs. Higher final costs than anticipated at the middle of product planning is another reason for product failure. It might partly be due to wrong pricing policies adopted by the firm. The cost estimates also often go wrong when the products are finally introduced into the market.

4. Poor timing. The fundamental principle to be followed in product planning is to find out the exact time at which the product is to be introduced into the market. Usually when and how are the two questions a manufacturer is often finding it difficult to answer. A close analysis of the market condition and consumer behavior and attitudes is essential to find an answer to the two problems.

5. Competition. This is also an important factor that leads products to straggle hard in the market. There are various methods to overcome severe competition, including price cuts (mark down prices) and various kinds of discounts, etc. Consumer products are most affected by severe competition. However, it should be noted that it is not the low price alone that will help a product to compete and succeed in the market. Basically, offering high quality products excelling the existing ones is the basic determinant in deciding the success of a product in the market. There is a widespread recognition that it is ultimately the quality of a product which will enable the product to withstand competition.

6. Insufficient marketing effort. it is wrong to assume that a manufacturer’s job ends the moment a product is ready for sale. Proper promotional activities also form a part of his job to make the product known to consumers. Proper revision of the channels of distribution and the methods of physical distribution also help in proper and efficient marketing of products.

7. Inadequate sales Force. Selling is done by personal or impersonal methods. Impersonal methods include advertisement and similar promotional activities Personal methods, on the other hand, are more intimate and more efficient, Promotional activities should be backed by adequate sales force to introduce the product properly in the market.

8. Weaknesses in distribution. The distribution of the product is one of the major marketing problems. It is this marketing function which enables the product to reach the proper markets at proper time at a proper price. Distribution management is considered to be one of the important areas where management decisions require farsightedness and vision.

A review of above mentioned causes reveals that some factors are internal and can be reasonably controlled by the management. If all the possibilities are considered well before time, the firm will be certainly successful in its products development programme. Before starting the production of the product at a commercial scale, test-marketing of the product should be made so that the market response to the product may be observed carefully. Other techniques of evaluation and review should be used before proceeding with the production on a large scale.

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