The reasons for the failure of new products
However, despite well-elaborated system of planning new products according to various estimates, from 15 to 35% of all commercial innovations undergo crash. The reasons for the failure of new products can be divided into two groups. The first group depends on factors outside influence. Let us examine them in detail.
The main reason for the failure of new products to market is a discrepancy innovations values and needs of consumers, their behavior. Marketing for long-term market success is especially important goods repeat purchases. That it is the basis for making marketing decisions.
The use of market testing needs, but expensive. It is difficult, moreover, is the selection of proper market analysis and synthesis of the results.
In addition, during the trial sales company plans on introducing new products to the market may become known to competitors, which increases risk. In this connection it is necessary to follow the following principles:
- Innovation should be based on long-term target and strategic planning;
- The size and structure of the company, as well as available financial resources should promote innovation in life planned;
- The company must have a sufficient number of "know-how" to use different technology and different target markets;
- The need to quickly identify and respond to their need to continuously exchange information with potential customers and experts;
- Innovation enterprises are significantly different from competitors' offers.
Driven by innovation market is always more successful than those that are the product of technical and scientific progress as such progress often not combined with detailed research of consumer needs, that is often the "production out of the market."
The last phase of the planning of new products - deployment of production and marketing. Here we must take into account the fact that the growth rate and the actual level of sales of new products depends on their adaptation to consumer behavior. One of the main aspects of this behavior - the process of recognition or rejection of new products. Models of these processes is shown in Fig. 34.
The most used today is a model of Rogers (Fig. 35). The initial terms of this model is to study the experience of the former consumer knowledge of their real needs and problems, the firm's ability not only to innovate, but also to take account of relevant social norms.
Another aspect of good planning - the time during which the adaptation is a new product on the market.
To reduce costs and measure risk in this phase of planning new products most commonly used method of "regional presentation" is consistent implementation of such goods in different regions using the appropriate marketing tools that had been scheduled or modified after test marketing. The fundamental problem here is the harmonization in time and production planning of complex marketing communications. Even the most intensive advertising campaign does not reach its goal if the advertised product lacking in trade. Meanwhile placed on the market and the product does not attract the attention of the consumer when it started advertising too pizno.eoriya directs manufacturers to create such products that have value for customers, able to meet the immediate needs of the market. If such guidance is lacking, no product is needed, and therefore all the costs of its creation and production will be in vain.
Market never compensate them.
An important reason for the failure of new products is also not undo their principal characteristics and properties of those product offerings that are on the market today and have become familiar to consumers. Market always prefer proven practices goods. Only when the consumer is satisfied that the new product, provides significant benefits to meet the specific needs, then it will change its orientation, buy something new.
The globalization of competition, strengthening its influence - this is another reason for the failure of new products to market. Competition as one of the main factors of the market economy, on the one hand, stimulates innovation, on the other - prevents introduce them to the market. Innovative action - an encouragement of enterprises in their struggle for the market *. At the same time such actions always cause a reaction of producers of traditional products. Falling prices in the past, strengthening relationships with distribution channels, protectionism, sales promotion, etc. - these are an effective tool that can make innovator refuse too risky 'business launch of new product on the market.
By the failure of new products in the market may cause several factors external influences, such as:
1. The general tendency to reduce life cycle. Increasing the rate of introduction of scientific and technological progress, the growth of business activity of enterprises and innovators constantly accelerating pace of squeezing traditional products from the market. Thus, a new product, moving into the category of traditional, can quickly feel the pressure next novelty that certainly reduces the time to develop appropriate marketing programs, search for new markets, increases the importance of possible errors.
2. Strengthening the legal regulations concerning environmental protection and consumer rights. New products may not meet such standards, especially when it comes to offering foreign markets. This may stop the introduction of goods still in the early stages of its life cycle.
3. The increase brand equity, ie the cost of additional cash flows generated by the fact that consumers recognize the brand of the company. Today, consumers increasingly prefer famous brands, which means that something new faces increasingly difficult obstacles.
4. Aging consumers that increase their average age (this is particularly noticeable now in Europe). This trend is largely linked to the previous one, because consumers age showing a greater propensity to traditional products than for new products.
The internal factors (reasons related to the operations of the company) include:
- Subjectivity in the selection process of a new product idea, that the materialization of the idea of good, not because it really is the best, but because of the pressure of a responsible person;
- A reassessment of their business opportunities (existing technology, relations with suppliers, staffing, financial capabilities, and so on. P.) And market opportunities, which displays product (market size, consumer behavior, resellers, system status communications, etc. )
- The lack of a new product in quality, design features, system maintenance etc.
- Imperfect positioning, resulting in a new commodity or come to the attention of consumers, or is placed in close proximity of competing products;
- Imperfection marketing program: a lack of a comprehensive system «marketing mix», the lack of mutual confrontation marketing activities, their discrepancy to your surroundings;
- Delayed the entry, which is especially harmful for seasonal products;
- Insufficient support management.