Bad communication, misinterpretation and limited vision of the environment, critical factors.
Many factors can affect the success or failure of new products. Sometimes ideas that seem great in the market are "fiascos" or ideas that seem very simple "true hits".
Ideas play a fundamental role, but. Why good ideas are not successful? What are the factors that make an idea fail? This article will simply name some of the typical causes of failure of new products or ideas.
Here is a list of the factors that sometimes make a new product fail.
1. The miscalculated potential:
Starting with too high expectations is the first risk and failure factor, inadequately determining the true potential of an idea is decisive in planning and estimating sales and subsequent investments.
I suppose that the fashion example will be the internet sector. The expectations generated were too high, which inflated the sector as a whole and today companies with interesting ideas fall short in sales and with high costs.
2. Technological or sectoral change not analyzed:
Failure can also be a matter of timing. Sometimes interesting products are quickly displaced by new technologies or new methods and a bad analysis of the "State of the art" generates losses due to obsolescence.
An example may be the companies dedicated to producing photography rolls indiscriminately when currently "the digital age" dominates the market.
Another interesting example was the transition from the steam age to the diesel age in locomotives, at the beginning of the diesel era, companies that produced steam engines claimed that this fuel would not be able to produce enough force for freight locomotives. Today steam does not exist and many steam companies succumbed despite producing powerful locomotives.
3. Under quality control:
We are in a fast but demanding world. product failures are unacceptable and markets quickly expel unprofessional workers.
Balancing costs properly with quality is an art that if not learned will be a synonym of failure.
Marketing failures:
- Bad publicity Unattractive packaging and disclosure Poorly done research and segmentation Outdated and ineffective distribution and marketing channels.
4. Unexpected market reactions:
Acceptance of a product sometimes depends on fashion considerations. The construction of the so-called "good will" of the product must take into account considerations of fashion, age, adequate segmentation and precise target markets, otherwise they will be "off" products.
Building a product and company image is essential.
A typical example can be the polluting products in the seventies, the companies that defended their products without having environmental considerations were punished by the markets, despite being products of high quality and utility.
Success is synonymous with fashion, quality, price and opportunity.
5. Inadequate analysis of the environment:
When you do not have a global idea of what is happening in the world that surrounds the product or service, you forget the external risks that can lead to failure.
GMO products are a clear example, while they were being produced somewhere in the world, they were being banned in others. Today they are little appreciated products and the preference for the "natural" is the order of the day.
6. Mismanagement:
It is the most logical factor. Making decisions involves risks and some risk will always be present. A good administration must know how to play with its alternatives, make decisions that guarantee stability and long-term growth, and maintain responsible and correct management of companies.
7. Additional factors:
- Bad investment security. Incorrect cost estimates. Inadequate allocation of expenses. Poorly presented product.
Failure is a possibility that can be avoided if one works with professionalism, a long-term vision and with clear and serious objectives and studies.
