Explain the reasons for product failure.
There are various reasons of product failure:
(i) Inadequate Market Analysis – Biased information and improper analysis will yield only wrong data. Acting on such data leads to product failure.
(ii) Product Defects – Technical flaws in the process of product development.
(iii) Higher Cost – Higher cost than anticipated at the time of production will lead to wrong pricing strategies and cost and profit estimates.
(iv) Poor Timing – Appropriate time of launch of a product is essential. Opening a jewellery line at the time of ‘Shradhs’ in India is useless.
(v) Competition – Major giants already operational in a specific industry can act as tough competitors.
(vi) Inefficient Marketing Effort – Proper advertising, sales promotion, distribution network etc., should support the product.
(vii) Inadequate Sales Force – Non-availability of sales force or unattended customers can obviously lead to a product’s failure.
All these problems can be solved by timely action of the management.
Product failure can be prevented by using the following precautions:
(i) A forecast of market demand – How large is the market and for how long will it last?
(ii) A description of market profile – Analysing the target customers, their patterns of purchase, demographics etc.
(iii) Designing an efficient organisational structure for the distribution of products.
(iv) Undertaking consumer tests – On the basis of results obtained, the entire process to be rescheduled, if necessary.
