Managing the

CHAPTER
Product

Development

PRODUCT LIFE CYCLE

life. Industrial
has life, a product has its
Product Life Cycle As every being consumer goods. When a
than
have a longer life enters into the
Diferent Stages goods may commercialised,
the product
product idea is for making sales and
Advantages of PLC and competes
with the rivals,
market
human beings,
have length of
Development of New Product Products, like
earning profits. in human beings
Managing8 New Product been described as life cycle
life. This has life
it is called as product
Development and when applied to products, termed as product
Planning Process The product life cycle is generally
cycle. a particular market.
because it is related to
Launching a New Product market life cycle,
in the market of Mumbai, may
Product Diversification For instance, an old product
remote village. The product
life cycle
have a new life in a
Product Elimination for products and long for
some other
may be short
some

Product Modification But

differ form product to product.
products. The period may
known as
the product passes through the stages, collectively
Product Failure
the life cycle of a
Questions product life cycle. The chart below gives
product

Salesvolume
Profit Mardin
Introduction growth maturity saturation Decline
Product Life Cycle

214
Managing the Proturt
Development 215
ntrotction: Prouct i aw BnCNs in rarket is kra cost of marketing is high : profits are

Grewth: The prducr has given atisfaction t the first

tyers rhers foilow Sales increase
rapsdiy and proct starts n e r e prfi Cometitors ntice the stccess and start planning
conpetitive offering
Maturity The product reaching its maturity and saies are good But hattle for market share 1s
ahout to bepin
Saturation: Total saies are not growing any more. The battie for market share difficuit.
is
Try for
strong brand loyalty and reduced price
Decine: Sales and profits are starting to fall and futurc of the
product does not look bealthy.
Remedial strategy modifying. repositioning or even deieting the product. is needed.
Every product moves through a life cycle. having five phases and thcy are
1.Introduction
2 Growth
3.Maturity
4. Saturation
S. Decline
Introduction: This is the first stage in the life of a product. This is an infant stage. The
product is a new one. The new product means "a product that opens up an entirely new market.
replaces an existing product, or significantly broadens the market for an existing product." The
initial stage needs ereater amount for investment. In this stage. the product is introduced into the
market and made available to the customers with a slow rise in sales. The profit may be low,
because of heavy advertising and sales promotion in order to stimulate the demand
2. Growth: The product satisfies the market. In this stage, a product gains acceptance from
the part of consumers and businessmen. Sales of the product increase. Profit also increases. This
is the stage where competitors appear along with substitute products in large numbers. Previous
buyers continue in their purchase and new buyers appear. Firms may find it difficult to meet the
demand. The success of firms depends upon the etficient manufacturing and distributing systems
of the product.
3. Maturity Al this stage. keen competition increases. Sales continue to increase for a
while, but at a decreasing rate. Competitors go for mark-down price by increasing advertising
deals. Market expenses increase, even afier mark-down pnces, which enable to face competition.
Thus, profit is thinned. Additional expenses are involved in product modification and improvement
in the marketing mix or/and product mix or style changes, to attract the customers and retain the
market. Overall marketing effectiveness becomes the key factor in this stage
4. Saturation I n the saturalion stage, the sales are at the peak and further increase is not
possible. The demand for the producis is stable. The rise and fall of sale depend upon supply and
demand Ar this stage., a replacement of product is needed, because the sale of the existing8
product cannot be increased.
5. Dectine : When sales start declining, buyers go for newer and better products. This is
because of many reasons-technological advances, consumer shifts in taste, increased competition
etc. At this stage. the product cannot stand in the market; many firnus withdraw from the market,
when sales and profits decrease. Price becomes the competitive weapon. Under such a situation,
fims shift their atiention to other products. The product becomes out of date and fashion. Then
the firm will drop the product from the product line.
 better pro.
Management of PLC of a product orogress towards

manage
the life cycle forecasting
the PLC, must also
ne marketing manager should A marketing while
o halk
manager,
programmes Cuak ut
for a healthy growth of the firm. be able
Thus he may
other drawbacks. varioUs stages.
Cpate the limitations and managed under
mo E s s t u l l y . We discuss how the PLC is

I. Management of Introduction Stage introduces tne product in the

company
product, the
of
Viewed as fairly risky and
a new
test marketing
ier successful The introductory stage
is
full-scale marketing programme.
otherand tools of
advertising
in
because large amounts of money is spent on_sufficiently arge numbers and
CPensive awareness
in
consumer

nications
to create
in some exceptlonai
cases they may
mostly negative in this stage
or
trials. Profits are
Cncourage
be very litle.
challenging. time consuming and
quite
product category is relatively expensive,
introduction stage and for this,
a
Cng quickly through
the
he aim of every company is to move
SA to ensure the availability of quality
Tescarch, engineering, production, are critically important
service and availability
The
company must provide promptly post-purchase
be able to
products. consumer goods companies use a
To trial and repeat purchase,
O spares, required.
if encourage
introductory prices and coupons. The
combination of demonstrations_on TV, samples, special retailers.
with
company also tries to gain distribution and shelf space
such as new product's perceived
Various factors affect pricing decisions of a new product,
of close substitutes, the
value to consumers, how fast competitors can copy it, the availability
elfect of price on sales volume and costs. Generally, for a pioneering product or a significantly
strategy. However, a
improved product, companies adopt high price and high promotion
new

company may use any one of the two important pricing strategies during
introduction stage
skimming pricing strategy or penetration pricing strategy.
(a) Skimming pricing: This strategy can be appropriate when the market size is large and not
much time is available before the competition appears. Similarly, this strategy can also work in
niche markets where customers are relatively insensitive to price and owning the product is
important, for example, Apple Computers keeps its price high when it introduces a new product.
This helps company to recover its new product investment relatively fast.
(b) Penetration Pricing: This strategy allows the company to strive for fast market development
and the focus is on long-term objectives of market share and profit maximisation. Price is kept low
and promotion is high. The market is seen as large and characterised by intense competition and
consumers who are aware or become aware are very willing to buy the product at an affordable
price. This strategy can also work when the market is large and any serious threat from competition

is not anticipated.
The importance of distribution set up is particularly significant for consumer product companies.
The availability of consumer producis at convenient locations where consumers generally shopping
for such products is quite important, keeping in view the large amounts spent on promotion to
make consumers in the target market aware and induce new product trial among customers. Most
firms use their established distribution network for a new product.
There is a high percentage of product 1ailures in the first stage. When a product is first

oduced at the pioneering stage, since ne product is new, profits are negative or low because of
nd heayy distribution and promotion expenses. There is
The promotional very little
programme is designed to stimulate demand. By lookino ahead,
direct
onecompetition.
competition.
can know
Managing the Product Development 217

that competition will enter sooner or later and cause prices and its market share to fal. Once the
product gains consumer acceptance the sales go up in growth stage. The PLC is the result, not the
cause, of marketing strategies choosen by the firm. Since "the first impression is the best impression,"
the marketing manager should :
Make proper advertising before the products are released in the market.
2. Shorten theperiod of introduction, as far as possible.
. Formulate new pricing and marketing strategies.
4 Undertake large scale promotional work.
5 Give proper attention to the distribution aspects.
IL. Management of Growth Stage
This stage is marked by a rapid climb in sales. Potential buyers start buying the product.
Buyers compare this product with the rival product, because new competitors enter the market with
new product features and thus competition increases. The number of outlets are increased. Companies
maintain their promotional expenditures at the same or at a slightly raised level to meet competition.
Since this is a crucial stage, the marketing manager should:
1. Improve product quality.
2. Add new product features and improved styling.
3. Enter into new market segments.
4. Enter into new distribution channels.
5. Reduce the prices to attract buyers.
6. Increase promotional activities.
Characteristics of this stage:
1. New market segments are opened.
2 Sales increases rapidly.
3. Company earns higher profit.
4. Unit manufacturing cost falls faster.
5. Competition enters the market.
6. Competitors engage in frequent price cuts.
7. Competitors increase promotion activities.
IIL Management of Maturity Stage
During this stage. a manufacturer gets maximum profit through maximum sales. Price
compeition becomes increasingly severe. A novel method of pushing sales as creative selling is
called for. The sales and profits start scale down as the products gradually lose their significance in
the presence of better goods substitutes. For an effective management, the marketing manager
should
. Improve the quality of the product.
2 Give proper attention to increase the usage among the current customers.
3. Try to convert non-users into users of the product, that is, creating new buyers.
4. Give proper emphasis to advertisement and promotional programmes.
5. Try to discover new uses for the product.
At this stage, it is more likely that the competitors become more active. In case the product is
novel one, by new competition would have come out with a similar product in the market to
compete. Therefore, the sales are likely to be pushed downwards by the competitors while the
 Modern Marketing
the sales.
his
This is called
218 sustain
and
to try rd to the
1onal efforts would have to
be i n c r e a s e d
topush
sales up.
With regard
profits
this point it is
difficult
effort has to be made now
maturity stage or saturation. At declining as
more
promotional

the profits are likely to stabilise or start

stimulate sales:
in order to meet competition. strategies to
can take the following
companies
C maturity stage, the
1. Market Modification
2. Product Modification
3. Marketing mix Modification
4. Systematic framework. (for the matured product)
1. Market Modification:
increase sales by adopting the following:
the market in order to
ne company may try to expand
*
Enter new market segments
*
Attract new users

lncrease usage among the present customers

*
Persuade customers to use the product
*Create new uses of the product
2. Product Modification:
The decline can be arrested by improvements in the product and promotion. We should
however, at this time seriously think in terms of new product, new product-mix or redesign of the
curent product. The company can stimulate sales by modifying the product characteristics
improvements.
Quality improvements ( Durability, Reliability, speedetc.)
Feature improvements ( size, materials, weights etc.)
*
Style improvements ( new models, new styles etc.)
3. Market Mix Modification:
The companies can try to stimulate sales by modifying marketing mix elements:
*Price
Distribution
*Advertisement
Personal selling etc.
4.Systematic Framework (for matured products)
In order to handle matured products, the managers need a
new ideas to utilise any growth opportunities: a tew
systematic framework for identifying
examples are given
below:
*
Innovative product differentiations.
Add new product lines.
* Stimulate non-users

*Create new product-line elements

Expand distribution coverage
Expand distribution intensity
Penetrate substitute's exposure
*Stimulate light users.
Managing the Product Development 219
IV. Management of Saturation Stage
This is a stage where a manufacturer finds it difficult to expand the sales volume beyond a
particular point, that is, sales are at the peak and further increase is not possible. Since the sale of
product cannot be increased, the marketing manager should:
1. Introduce new models.
2. Pursue new uses for the
product.
3. Introduce new package and
repricing.
4. Middlemen's margin is to be
increased.
5. Ifthe price is heavy, offer the product on instalment basis.
Vv. Management of Deline Stage
This is the last and most crucial stage. Sales may decline for a number of reasons-technical
advances, arival of new products at lowcost, changes in fashion, consumer preference etc. Sales
and profits continue to fall at this stage. If the substitutesare more attractiveand inlatest fashion,
buyers may turn their eyes towards them. At this stage, cost control is increasingly important to
generate profits by the following alternatives: (Suggested by Stanton)
1. Improve the product in a functional sense, or revitalize it in some manner.
2. Make sure that the marketing and production programmes are as efficient as possible
3. Streamline the product assortment by prunning out unprofitable sizes and models. Frequently,
this tactic will decrease sales and increase profits.
4. "Run out" the product, that is, cut all costs to the bare minimum level that will optimize
profitability over the limited remaining life of the product.
5. Abandon the product.

Advantages of PLC
must be cautious in taking advance
1. When the product life pattern is known, the management
modification, pricing strategies, style, quality
steps, before the decline stage, by adopting product
change etc.
2. The firm can prepare an product plan, by knowing the PLC of a product.
effective
in drawing future plans of the firm.
3. The PLC will greatly help the management
measures to control the PLC. They
include
A management may be able to adoptsome
and saturation stage by adopting new packaging, re-pricing
1. Extension of the life at maturity
etc.
or product modification
market.
2. Creation of new uses by expansion of the Amul Milk
varieties of the product amorg current users. For instance,
3. Creation of more
curd etc. "It is like
advertisement emphasises many uses, in preparing milk, tea,
Powder, through
having a dairy in your home."
fashion changes, market acceptance etc.
4. Adoption of the latest technological changes,
Product Identification (Branding)
to differentiate it from
distinctive name or/and mark on a product
Branding is the use of a
detailed explanation see Chapter 19)
similar competitive products. (For
OF NEW PRODUCTS
DEVELOPMENT ?
a 'new' product
has connotations. So, what should we call
The term 'new product' many
new products
offer innovative
have a common feature that
Most definitions of new-product been seen to be a
and introduction of new products have traditionally
benefits. The development
 220 Modern Marketin
costly and either maintaining
or oving
improvi its positio
risky activity. For an anisation intent
organisation intent on c
on
a activity of one
in the nroduct
new product
alternatives to
one
sorn or
market-place,
there are, however, few the issue of the
around the
The issues faced by many marketing strategists thus revolve
another.
ofnew product activity that is tobe pursued and how best to manage and, hopefully, reduce type
iel reduce risk
levels.
A company can add new ducts through, acquisition or development: The acquisiti
sition route
can take three forms.
(1) The company can buy other firms:
(2) The company can buy a licence or franchise; or
(3) The company can buy patents.
The development
route can take two fornms:
( ) The company can develop new products in its own laboratories. or
(2) It can contract with independent researchers or new-product development firms to develon
specific new products.
We can
identity
six categories
of new products.
1. New-to-the-world-products: New products that create an entirely new market.

2. New product lines: New products that allow a company to enter an established market for
the first time.
3.
Additions to existing product lines: New
lines (package sizes, flavours
products that supplement established product
etc.)
4. Improvements and revisions of
existing product: New products that provide improved
performance greater perceived value and replace existing products.
or

5. Repositioning: Existing products that are targeted to new markets or market segments.
6. Cost reductions: New products that provide similar
performance at lower cost.
Managing New Product Development
The companies handle the organisational
aspect of new product in following ways:
1. Product Managers: The manager in charge of a specific product division is bestowed the
responsibility of new product development. The advantageof this method is that
quite knowledgeable about the consumers changing needs and
managers are
competitive activities.
2. NewProduct Managers:A new type of managers
product development professionally.
are
appointed to take care of new
3. New Product Committee: This is a
high-level body constituted of top level managers from
all the functional departments.
4. New Product Department: A separate department for new
undertake product development systematically on a continuous basis.
new product may be created to
New Product Venture Team: Some
companies assign new product
teams, It is a unit within the
company respOnsiDie 1or
creating development to venture
afcTeam members are generally drawn from different entirely new products aimed at new
are removed from their
functional area of the company.
norma uuucds a
Dudget, a time frame, They
rknlaces may that even be garages to wOrK as a team and and provided informal
economy
g like in ndia, to be successful
develop new products
uc
Ina eo in the field
discovered and satisfied. new product must
A of marketing, new consume
needs must be be suitable to
The life of the firm is
needs of the customers.
closely related to the chang
meet the
development of new produ
Managing the Product Development 221

through technological innovations. The tcchnological innovations are importunt to the growth or
established business as well as to he developnent of new business, Businessmen must make a
detailed study of the market in relation to the products. New products mean new profits. For
instance, a ready-made garment dealer has to plan the garments to be in line with the changing
fashions. Product failure wastes the money, material and time,
apart from defeating the objectives
of the firm.
Product plan is the first step for an entire
marketing programme. It is a wider term and includes
product development also. Product plan has been defined as "the act of
making out and supervising
the research, screening, development and commercialisation of new products; the modification of
existing lines and the discontinuance of marginal or unprofitable items." The top management,
including specialists, takes decision on
product planning.
New Product Planning Process
Thenew
product planning is the function of the
drawn from sales and top management personnel and specialists
marketing, research and development, manufacturing and finance. This
group considers and plans new and
1. Idea
improved products different phases, as given belows:
in
generation ( Idea Formulation)
2. Screening of ideas
3. Concept Testing
(Evaluation)
4. Business analysis
5. Product development
6. Test marketing
7. Commercialisation (market introduction)
1. Idea Generation:
The focus in this first
stage is on
searching for
stage are good enough product ideas. Few
new

sources. An
to be
commercially successful. New product ideas ideas generated at this
and wants seem to be
important
source of new
product ideas is come from a
variety of
customers.
is
the most fertile and
logical place to start
Fundamentally, customer needs
equally important for personal consumers and industrial looking for new product ideas. This
both
Product planning starts with the customers.
scientific knowledge creation of product ideas.
provides the clues for meaningful idea The continuous
sources can search for new
broadly be divided into: (a) Internal formation. Drucker
Sources (outside the Source (within the suggested that the
company) company) and (b) External
Sources of New Product
1. Research and Ideas (Internal)
2. Development Department
Technical Service Staff
3. Company Salesman
4. Executive Personnel
5.
Company Sales Records
6. Top Management
7.
Company Patent Department
8. From
9.
Employees Suggestions
"Brainstorming" Sessinne u
 Modern Marketin.

222 NEW PRODUCT PLANNING

I D EGENERATION
A

SCREENiNG

THE IDEAS

CONCEPT TESTING

BUSINESS ANALYSIS

PRODUCT DEVELOPMENT

TEST MARKETING

COMMERCIALISATION

Sources of New Product Ideas (External)

1. Consumers
2. Competitors
3. Free-lance Inventors
4. Trade Literature
5. Consulting Organisations
6. Trade Fairs
7. Advertising Agencies
8. Government Agencies
9. Intermediaries (Distributors etc)
10. Wholesalers and Retailers.

2. Screening the Ideas: (Evaluation)

It means critical evaluation of product ideas generated. After collecting the product ideas, ine
next stage is screening of these 1deas. The man object of screening is to abandon further
considerationof those ideas hich are inconsistent with the
product policy of the firm
rm. The product
ideas are expected to be favouraDle ang will give room for consumer satisfaction, profitability, a
good market share, firm's image etc. All the ideas cannot be accepted, because certain
product
plans need huge amount of investments, tor certain plans raw materials
oetain plans may not be pracucaDic ce a n y or the ideas are rejected on account
not be available,
of many

ncons and thus eliminate unsuitaADIE 1dEaS. nly promi_ing and profitable
ideas are picked up f0
further investigation.
 Managing the Product Development 223

Answers are sought to questions like:

Does the product meet a genuine need ?
Is it an improvement overthe existing product?
Is it close to our current lines of business ?
Does it a totally new line of business ?
Will it offer customers a superior value?
*Will the new product bring in expected ROI ?
Does the market accept the new product ?etc.
3. Concept Testing
After the new product idea passes the screening stage, it is subjected to 'concept testing.
Concept testing is different from test marketing, which takes place at a later stage. What is tested at
this stage is the "product concept itself - whether the prospective consumers understand the
product idea. whether they are receptive towards the idea, whether they actually need such a
product and whether they will try out such a product if it is made available to hem. In fact, in
addition to the specific advantage of getting the consumers' response to the product idea, this
exercise incidentally helps the company to bring the product concept into clearer focus. Concept
testing belps the company to choose the best among the alternative product concepts. Consumers
are called upon to offer their comments on the precise written description of the product concept,
viz, the attributes and expected benefits.
4. Business Analysis (Market Analysis)
This stage is of special importance in the new product development process, because several
vital decisions regarding the project are taken based on the analysis done at this stage. Estimates of
sales, costs and profits are important components of business analysis and forecasts of market
penetration and market potential are essential. More precise estimates of environmental and
competitive changes that may influence the product's life cycle or its replacement or repeat sales
are also needed to develop and launch a product(A complete cost ppraisal is necessary besides
judging the profitability of the project. Market analysis involves a projection of future demand,
financial commitment and return thereon etc. Financial specialists analyse the situation by applying
break-even analysis, risk analysis etc. Business analysis will prove the economic prospects of the
new p.oduct.
5 Product Development
The idea on paper is converted into product. The product is shaped corresponding to the needs
and desire of the buyers. Product development is the introduction of new products in the present
markets. New or improved products are offered by the firm to the market so as to give better
satisfaction to the present customers. Laboratory tests, technical evaluations etc. are made strictly.
6. Test Marketing
By test marketing, we mean, what is likely to happen, by trial and error method when a

product is introduced commercially into the conducted in

market. These tests are
planned and
selected geographical areas, by marketing the new products. The reactions of consumers are
watched. It facilitates to uncover the productfault, if any, which might have escaped the attention
in the development stage. By this, future difficulties and problems are removed. This type of pre
testing is essential for a product before it is mass produced and marketed. Sometimes, at this stage,
management may take decision to accept or reject the idea of marketing products.
Designing the programme for test marketung involves making a number of decisions:
Where and in how many markets should test be carried out ?
*What should be the duration of test marketing ?

What to test ?
*What criteria should be used to determine success or otherwise ?
 224

and (Market introduction)

products flow to the market production rketing prog
starts, mark
7. Commercialisation this for sale.
stage,
At
It has to compete with the bom,meit
This is the final stage of product planning.

and
its. When a product is
profits
existing
begins to operate market-sales
life cycle.
share in the span-product
products Ceure
maximum
has a life
and like human
beings,
enters into the markets; four decisions
must make
product, the
company
new
12unching a
launched?
) When should the product to be
- Right time.

(2) Where should it be launched?

-

a single locality,
-a region or
national market etc.
(3) Which groups should be targeted ?
- Existing customers.

(4) How should it be launched?

-Develop an action plan for introducing the new product into the rollout markets.
Consider the following before launching a new product.
1. Effective market research
2. Ensure product quality
3. Differentiation of product
4. Identification of consumer needs
5. Effective promotion
6. Proper distribution system
7. Correct pricing strategy
8. Knowledge of local needs
9. Choose correct time
10. Strength of sales force.

Factors that hinder the new product development

1. Shortage of ideas
2. Shorter PLC
3. Higher expenditure
4. Fragmented markets
5. Inappropriate incentives
6. High gestation period
7. Non-cooperation of staff

Product Diversification
Diversification occurs when a firm seeks to enter the
Diversification is a policy of an
operting company, so hat market with a new product.
apletely new roduct.

number of courses, usually VErseproducts that that its busin compl

Completely
business and profits come
differ in market
from a

it means
Generally it means adding a new product to the eriot
**

new markets, new technologies

technolc
new etc. It is
is just
just the opnosite
or
productionbe new
ne. It
aracteristics

opposite of product line mayraction andPprois

roducts,

also

contrae
Managing the Product Development 225
referred to product line expansion. For example, a fim making watches at present, has started
making wall-clocks, This product is different from the existing product. The reasons for the
diversification are:
1. To take advantage of the
existing reputation;
2. To arrest the declining
profit margins;
3. To meet new products of
competitors;
4. To use more effectively the
existing facilities;
5. To increase the sales of existing
products;
6. To maintain market share;
7. To meet the customers' demand:
8.To utilise the existing spare capacity of factory:
9. To eliminate cyclical slumps;
10. To cutail market
expenditure,
11. To compensate the loss
of another product;
12. To use undistributed earnings.
The kinds of diversifications are:
1. Products Sharing a Common Base : It is an introduction of new products, which are akin
to the present line. The new products, which are introduced into the market, will not affect the
present product, in any way. For instance, a sugar industry can diversify to paper product.
2. Products of Related Industries: It is an introduction ofa new product, a complementary
item. For instance, a type-writer company may manufacture type-writer ribbon, which can be used
as a complementary product to the typewriter. The new product may be used as an input for the old
product.
3. Products of Unrelated Industries : The products of unrelated industries or lateral
diversification as a move to expand product line, beyond the confines of the industry. That is, the
company can produce any products. For instance HMT produces wrist watches, electric lamps etc.
Product elimination (Product Withdrawal)
It means that a product is removed from the product line. When there is no demand for a
product or when the demand declines to obsolescence, marketing c such product is of no use.
Moreover, certain products cannot be modified to suit the market. In' such a case, it is better and
profitable to withdraw the product. Such product brings decreased sales, and profit, and finally
affects the reputation and financial strength of the fim. Such a process of withdrawal of products is
known as product elimination. A sick product lost market appeal.

The indicator for elimination :

1. Downward profit trend

2. Decreasing price trend
3. Declining sales trend
4. Cheaper substitutes are appeared.
5. Greater utilisation of executive's time.
6. Contribution is not covering the fixed expenses.
7. Unfavourable customer reaction.
8. Emergence of superior substitute products.
9. Decreasing marketing share.
10. The product may be in the last stage of PLC.
 Modern Marketing
226
onditions,
cond becau
suit the
changing
of
Production Modification in order to by changing its
be
modified
existing
producl,
changes a
ly,
The existing product has to in the modification.
When
improvements

fashion change. hen one

makes
be product is to increas
ease the sales
is said to
of this
change orto
size, form or design etc., the process
gn etc., p
The purpose the additional needs of
(1) Satisfying
new.

theexisting product may look almost

facilitare suit the
market-rich or no
may
Modification to
a product demand or for
the
quality of
customers.
attract grading the the consumers
ading or down
buyers, (2) up gradi etc. (4)
Meeting
colour, shape
Changing to attractive design,
responsibility.
may not reach the taroan
Product Failure: Reasons into market, the arget
products entering innovations, Consumers, who. Are
it is witnessed that many
Uenerally
Introduction of new
substitutes, technological The following are the
sales and profits. the span of
life of products.
oselective in their choice of products etc. reduce

general causes for the failure:

product may be faulty.
Conception of product idea or
specification of the
facility.
2. Design of product may not match with production
not be accounted.
3. The strength of competitions may
insufficient.
4. Marketing may be inefficient and
estimated cost.
5. Cost of production may be higher than the
6. The product performance may be unsatisfactory.
7. Operations may not be within control.
8. Market changes may not be understood properly.
Producers may be ignorant of consumers' preference.
9
10. Technical and production problems might have been underestimated.
11. Products may be introduced to the market untimely.
12. Introducing products for which there is no demand.
13. Stressing product atributes incorrectly.
14. Prices may be high.
15. Poor packaging, inappropriate size etc.
16. Weaknesses in distribution
17. Inadequate sales force
18. Poor timing
19. Lack of test marketing
20. Government policy
How to Avoid Product Failure?
Many products are
introduced in
the market and many products
Many of the
problems can go out of the market every
vear.
be soivea by timely action taken by the
failure of some of the products can be avoided by the following management: Thus,
. The product must be suitable to the market.
steps
2. There must be a good demand in the market.
3 The product must keep the company's image.
4. There should not be any legal restriction.
5. The product must be in tune to the consumer's need
6. The product must fit into the existing product facility.
7. There must exist a good system of marketing.
7.Tn
RThe product must be compatible with the current
There must exist a good demand creation method.environment and social
10. There must exist a good system of distribution standaras