Why Product
- Submitted by: matirosa
- Views: 618
- Category: Other
- Date Submitted: 01/29/2011 04:13 PM
- Pages: 2
- Report this Essay
10 Reasons Why New Products & Services Fail
Fewer than 10% of all new products/services produce enough return on the company's investment to survive past the third year. Why? Here's our Top 10 list of reasons new products and services fail: 1. Marketers assess the marketing climate inadequately. 2. The wrong group is targeted. 3. A weak positioning strategy is used. 4. A less-than-optimal "configuration" of product or service attributes and benefits is selected. 5. A questionable pricing strategy is implemented. 6. The advertising campaign generates an insufficient level of new product/new service awareness. 7. Cannibalization depresses corporate profits. 8. Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world. 9. The marketing plan for the new product or service is not well implemented in the real world. 10. The marketer believes that the new product and its marketing plan has died and cannot be revived, when, in fact there is the potential for resurrection. What can marketers do to improve the likelihood of new product success in an age of promotion and unprecedented competitive response? Testing the product before launch is one solution. Typically, if a company decides to do a test market before launching the product, managers run a test market. Traditional test markets are fraught with problems, starting with how companies select them—often because they are easy to manage rather than because they represent the actual markets a company wants to reach. Traditional test markets are expensive and competitors can steal ideas and sabotage results. A well-done simulated test market, on the other hand, reduces the risks of launching a flop by collecting data a company needs to forecast the likelihood of success, more securely and more efficiently than a traditional test market. For details on these reasons for new product failures, see our book, “Market New Products Successfully: Using Simulated Test Marketing,”...
Fewer than 10% of all new products/services produce enough return on the company's investment to survive past the third year. Why? Here's our Top 10 list of reasons new products and services fail: 1. Marketers assess the marketing climate inadequately. 2. The wrong group is targeted. 3. A weak positioning strategy is used. 4. A less-than-optimal "configuration" of product or service attributes and benefits is selected. 5. A questionable pricing strategy is implemented. 6. The advertising campaign generates an insufficient level of new product/new service awareness. 7. Cannibalization depresses corporate profits. 8. Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world. 9. The marketing plan for the new product or service is not well implemented in the real world. 10. The marketer believes that the new product and its marketing plan has died and cannot be revived, when, in fact there is the potential for resurrection. What can marketers do to improve the likelihood of new product success in an age of promotion and unprecedented competitive response? Testing the product before launch is one solution. Typically, if a company decides to do a test market before launching the product, managers run a test market. Traditional test markets are fraught with problems, starting with how companies select them—often because they are easy to manage rather than because they represent the actual markets a company wants to reach. Traditional test markets are expensive and competitors can steal ideas and sabotage results. A well-done simulated test market, on the other hand, reduces the risks of launching a flop by collecting data a company needs to forecast the likelihood of success, more securely and more efficiently than a traditional test market. For details on these reasons for new product failures, see our book, “Market New Products Successfully: Using Simulated Test Marketing,”...