WHY NEW PRODUCTS FAIL IN INDIAN MARKET
It is a baffling question. Some new products fail. Some succeed. For a company, every new product that is developed is a star. But it may fade out. Some of the for the
of new product are:
of new product are:
1. Lack of organisational teamwork
In most of the organisations, there is a tradition to rely on R & D to come out with a bright idea and research it, which is then handed over to the design and production people The ultimate end product comes to marketing department for selling. There are many problems in this segmental approach. The design people may revert to R & D, if they find the product unviable. The production people may ask the design people to redesign if the product cannot be turned out at the budgeted cost. The design people take their own time to redesign.
In most of the organisations, there is a tradition to rely on R & D to come out with a bright idea and research it, which is then handed over to the design and production people The ultimate end product comes to marketing department for selling. There are many problems in this segmental approach. The design people may revert to R & D, if they find the product unviable. The production people may ask the design people to redesign if the product cannot be turned out at the budgeted cost. The design people take their own time to redesign.
The marketing department ultimately gets a product that is not acceptable to the customers at a price quoted. Perhaps, their needs are not met. Each pary places the blame at the door of the other party. The solution to this situation is to have team-approach. At each stage, there should be cross-functional approach, e.g examining the product idea.
New products should be linked to a strategic management process, and the new product development process should be under an effective organisational A process of development ensures that the product proceeds to stage only when cleared by a cross-functional the next the decide team of gatekeepers. At each stage, while whether to go further/no go and kill lno go and hold/recycle. The project leader decides the criteria for each stage. This is different from the department-to-department approach: where leaders change often. Thus, if marketing research into consumers wants and needs does not support a product, the product does not go ahead from the business planning stage to product development stage. Simultaneous product development by a cross-functional team tums out products quicker. It may be risky to do so. But where product life cycles are shorter, quick development of new products offers far more benefits than the risks associated with it.
2. Technical problems
Too complicated a product or poor performance of a product that is not superior to any of existing products may fail.
Too complicated a product or poor performance of a product that is not superior to any of existing products may fail.
3. Poor timing
Philips was too slow to bring improved generations of vcRs after it put its new product in 1972. In the meantime, Japanese companies put at least three generations of VCRs. Delay in introduction of products may affect the marketing chances of a company. Even rushing a product in the market too quickly is not Hima Peas introduced by Lever years back were not accepted by Indian consumers, who were not ready packaged branded commodities In this to accept became age workingwomen, many fast-food items acceptable, though it was unthinkable to expect so a few years ago.
Philips was too slow to bring improved generations of vcRs after it put its new product in 1972. In the meantime, Japanese companies put at least three generations of VCRs. Delay in introduction of products may affect the marketing chances of a company. Even rushing a product in the market too quickly is not Hima Peas introduced by Lever years back were not accepted by Indian consumers, who were not ready packaged branded commodities In this to accept became age workingwomen, many fast-food items acceptable, though it was unthinkable to expect so a few years ago.
Let us now examine why new products succeed.
a) Any product, whether new or existing, has to satisfy a consumer need or more than one consumer need.
b) The product advantage of being superior goes a long way in making the product successful a copying machine succeeded because it copied anything in seconds any chemical special paper, Polaroid succeeded as it took a picture, developed it, and gave a print in 60 seconds flat.
c) The product must be competitive cost-wise. It must be compatible with the distinctive competence of a company. Top management must support it. The environment should be conducive to developing new products. The management must be alive to new-product opportunities.
d) The product must have a marketing advantage, e g. Avon is sold door-to-door Barbie doll can get clothes to drape her in.
e) The product must have a creative advertising advantage, two minute noodles emphasised the two-minute solution to satisfy hunger school going children. The marketing department will launch a fill-fledged production promotion campaign for mass distribution. Distribution channels will be chosen to make available the product wherever it is demanded. After this, the life cycle of the product will start and the marketing manager will adopt different strategies during different stages of the product life cycle to maximise sales improvements in the product may also be introduced as and when volume. Necessary necessary in the light of changed customer requirements and innovations in technology. Each of the above stages becomes progressively more expensive in terms of money and scarce manpower. Just once the product idea passes through these stages and careful analysis has been done at each stage, the chances of product failure are reduced considerably.
Understand the Product Failure
When a product does not reach the target of sales and profits, it is said that the product bas failed. Symptoms of product failure include the following:
When a product does not reach the target of sales and profits, it is said that the product bas failed. Symptoms of product failure include the following:
1) Declining sales volume,
2) Declining profit margins,
3) Higher than expected costs,
4) Higher than expected investment costs.
2) Declining profit margins,
3) Higher than expected costs,
4) Higher than expected investment costs.
The failure of a product may be traced to the management’s neglect or mishandling of the product innovation or the faulty management of the product life cycle. The important canses of failure of a product may include the following:
1. Conception of product idea or specification of the product may be faulty.
2. Design of product may not match with the needs of customers.
3. The strength of competition may not be properly studied.
4. Cost of production may be higher than the estimated cost.
5. The product performance may be unsatisfactory
6. Market changes may not be understood properly.
7. Technical and production problems might have been underestimated.
8. Products may be introduced to the market untimely.
9. Stressing product attributes incorrectly.
10. Inadequate promotion.
11. Poor packaging, inappropriate size, etc.
12. Faulty pricing of the product.
In order to check product failure, timely care should be taken regarding the above factors. Product and marketing strategies must also be modified depending upon the changes in the market. The existing product has to be modified in order to suit the changing conditions. When a firm makes improvements in the existing product, by changing its quality, size, form or design etc., the process is said to be product modification. When changes are made, the existing product may look almost new. The purpose of this change is to increase the sales or to attract the customers.
Modification for failure of products are:
(i) satisfying the additional needs of the buyers
(ii) upgrading or down grading the quality of product of a suit the market rich or poor
(iii) changing to attractive design, colour, shape, etc.
(iv) meeting the consumers’ demand.
(i) satisfying the additional needs of the buyers
(ii) upgrading or down grading the quality of product of a suit the market rich or poor
(iii) changing to attractive design, colour, shape, etc.
(iv) meeting the consumers’ demand.
Quality is a dynamic concept and so is its management. Total Quality Management has been accepted throughout the world these Il continuous improvement of qualify with the cooperation of workers through innovatron in product and technology so to meet the requirements of the customer. as by The launching of ISO: 9000 series standards by the International Standards Organisation is an attempt to help the industrial organisation in adopting Total Quality Management to improve their quality and productivity and to serve their customers efficiently.
Elements of Total Quality Management
Quality may be described as fitness of a product for use. Total quality management refers to meeting the requirements of customers consistently by continuous improvement in the quality of work of all employees. For achieving total quality, three things are essential:
Quality may be described as fitness of a product for use. Total quality management refers to meeting the requirements of customers consistently by continuous improvement in the quality of work of all employees. For achieving total quality, three things are essential:
There are three elements of Total Quality Management
i) Meeting customers’ requirement:
i) Meeting customers’ requirement:
ii) Continuous improvement through management process;
iii) Involvement of all employees.
Total Quality Management is a dynamic concept, as the quality standards do not remain same forever. They are to be modified or changed to meet the requirements of customers the and to make use of new technology. Even the ISO: 9000 series standards have a provision of revision, modification or deletion of quality standards after every five years.
Total Quality Management also calls for involvement of employees in this programme. Without the active involvement of employees, high quality standards be achieved. can’t Further, the whole concept of Total Quality Management is directed towards meeting the requirements of customers.
i) Meeting Customers Requirements: Under Total Quality Management, the term customer” means every user of a product or service and not only the end-user. This is a very broad meaning of the term “customer For example, a product that passes through a number of stages, every next stage is a customer for the preceding stage. Total quality management aims at satisfying the requirements of customers which never remain constant, but keep changing with the changes in time, environments, circumstances, needs, fashion, etc. Thus, meeting the changed requirements of customers is a continuous goal of the producer
ii) Continuous customer requirements may be in terms of Improvement The change in
desire for better quality of product/services, bigger size, reduced cost, etc, So a producer has to with new A new process may have to be developed, or it may require a new design. The suction process has thus to be attuned and accelerated to meet these changing requirement The management has also to take care of competition in the market so that customers do not shift to other producers. For instance, introduction of 300 mi cold drink bottles one producer in 1992 led other producer to shift to bottling of 300 ml of their brands. The advancement in technology is another improvement factor in improving the quality The innovations in a particular field may cause some of the existing technologies to become obsolete and as a result the survival of the producer not adopting technological advancements would become very difficult. For example, Photocopier was a big machine with a manual process when it was introduced in India for the first time. The process was time consuming and even quality was not up to the mark. Thereafter, new photocopiers (Xerox machines) were introduced and slowly old machines disappeared for the simple reason hat customers’ need underwent a sea change.
desire for better quality of product/services, bigger size, reduced cost, etc, So a producer has to with new A new process may have to be developed, or it may require a new design. The suction process has thus to be attuned and accelerated to meet these changing requirement The management has also to take care of competition in the market so that customers do not shift to other producers. For instance, introduction of 300 mi cold drink bottles one producer in 1992 led other producer to shift to bottling of 300 ml of their brands. The advancement in technology is another improvement factor in improving the quality The innovations in a particular field may cause some of the existing technologies to become obsolete and as a result the survival of the producer not adopting technological advancements would become very difficult. For example, Photocopier was a big machine with a manual process when it was introduced in India for the first time. The process was time consuming and even quality was not up to the mark. Thereafter, new photocopiers (Xerox machines) were introduced and slowly old machines disappeared for the simple reason hat customers’ need underwent a sea change.
iii) Involvement of Employees: Total quality management requires a continuous improvement in quality of products. This calls for the improvement in the quality of work of employees through training and development. The enhancement of skills of employees will not only improve quality, but also bring down the cost of production through efficient use of machines and mate ials and reduction of wastages.
The employees must also be conscious about the need for improvement in the quality of work. Quality circle is an outstanding example in this regard. It is because of employees’ involvement in improvement of quality that total quality management is referred to as people’s process.
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