In this era of tight competition from domestic and global firms the firm who don't come out with new products are putting themselves at great risk Because their existing products are prone to changing customer needs, shorter product life cycles, new technologies and increased competition.
Despite years of research and huge capital being pumped in to understanding the consumer, making a launch successful is still a difficult task. The new product largely depends on the product quality and the marketing tactics of the firm, there are many occasions were the product failed miserably even after using the best technology and quality the reason is that the new product is not worth for the customers. The prime factor for the new product success is - customer value
1. Faulty product idea:
The product often fail because faulty of product idea. A good idea can revolutionize the market but a bad idea may prove bitter to the firm or it may backfire Eg: Polar industries in 1991 launched "COOL CATS" fan - decorated with cartoon characters meant primarily for children. The fan was priced at premium; the idea was that children's were increasingly becoming influensors in purchase decisions and to attract the kids with the cartoon creatures and to position the product exclusively for kids. The product failed miserably inspite of its huge advertising budget because when the fan was put on it didn't have any colour effect and the customer did not justify its premium price. 2. Distribution related problems:
The new product fails if the product is unable to meet the channel requirements. While developing the product the channel requirements must be given adequate consideration. Eg: when NESTLE launched its new chocolates the product and promotion was ok but the product failed in the distribution side because the company stipulated the product to be stored in refrigerators. The product faced two problems in the distribution side because it meant...