5 Reasons Companies Fail in Launching New Products
Mistake 1: Lack of preparation
Companies have suitable, quality products, but can’t support the fast growth. For example, Mosquito Magnet, which was a mosquito net designed by American Biophysics to trap and kill mosquitos, released when the West Nile virus was on the rise. It was a quality product that was launched at the perfect time. The problem, American Biophysics could not manufacture enough mosquito magnets to keep up with the demand of the market. American Biophysics switched manufacture of it’s product from Rhode Island to China, which led to low quality products, unhappy customers and the mosquito magnet that was once saving lives almost went off the market. American biophysics eventually sold its company to Woodstream. Woodstream still makes profit from the product, but the original stakeholders from American biophysics, do not.
Mistake 2: Flawed product
Releasing a bad product that hasn’t fully been tested can lead to companies losing billions of dollars. In 2007, Microsoft replaced its successful Windows XP by launching Windows Vista. The company had high expectations for the new Windows Vista, with a $500 million promotional budget and predicting 50% of its users would run the premium edition within two years. However, consumers found quality problems with the compatibility and performance of the Vista software and switched to Apple or downgraded to the Windows XP. The cost to Microsoft due to its poor quality product was astonishing.
Mistake 3: Not knowing your target market audience
It’s essential to think about who is your customer? Are they interested in your service/ product and can afford your service/ product? In a Ted Talk video, reformed marketer, Amy Lockwood addresses why free and cheap condoms are not being used in the DR Congo, when the prevalence of HIV is so high in that country. She found that the packaging of the generic condoms were more risqué, and were used more than the free, cheap branded condoms that had more of a “fear, financing, and fidelity” image on the packaging. Her conclusion was that we must remember who our audience is and what message will change their behaviors when we market our products.
Mistake 4: Insignificant point of difference
Creating a new product that has a distinctive point of difference with competitive products is crucial in the success of the new product. The product must offer unique factors that will sway buyers from other competitive products. Often we see this mistake of insignificant point of difference in food, beverage, health and beauty products. A good example of this mistake is with the Coca-Cola product, C2. C2 was marketed towards middle age men in their 50s who enjoyed the taste of Coke and the no calories aspect of Diet Coke. However, Coca-Cola failed to distinguish the benefits of the C2 from the other Coca-Cola products and the new drink was unsuccessful.
Mistake 5: Bad timing
The timing of when you release a product is one of the most important factors for a new product to be successful. The timing has to be perfect! Not too late or too soon. A few years after the Apple iPod was launch, Microsoft released its music player called Zune. The mistake was Microsoft waited too long after the release of the iPod and other music players like the MP3 player.
Bringing a new product to market requires extensive research and preparation, but only one in four products in the…smallbusiness.chron.com