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MARKETING MANAGEMENT - New Products Development Strategies

Failure in Utilizing / Adopting Marketing Research Technique - New Products Development Strategies

   Posted On :  18.06.2018 09:49 pm

The fundamental condition to succeed in any market is a deep understanding of consumers and an excellent appreciation of competitors and their activities.

Failure in Utilizing / Adopting Marketing Research Technique
 
The fundamental condition to succeed in any market is a deep understanding of consumers and an excellent appreciation of competitors and their activities. This can come about only if your company has strong systems and methods, not only to collect and analyze market data, but also to disseminate the information thus obtained to relevant decision makers within the organization. Studies revealed that nearly 67 per cent of the executives noted that market research agencies are seldom utilized by their companies to collect market data in a formal and structured manner; only the remaining 33 per cent of companies either frequently or almost always used marketing research agencies.
 
Granting that it may be somewhat costly to use market research agencies on a regular basis, the extent of utilization of internal mechanisms to collect market data also does not seem to be very high. Nearly half the companies do not have strong formal mechanisms to collect systematic data on a regular basis from their own sales people and about a third of the companies rarely collect data from their retailers. If this is the general trend, then it is not very surprising that the success of new brand launches is low.

The message, therefore, is that you need to review your internal systems and processes for gathering and utilizing market data relating to your consumers and competitors to what your decisions become sharper and data based. Success otherwise will be elusive.

 

Failure in Identifying Market Opportunities for New Brand Launches

 
 
One of the weakest links in many organizations is the absence of any systematic approaches for identifying market opportunities, either for introducing new brands and products, or for relaunching and\or repositioning of existing products.
 
A glimpse at the mindset of companies, obtained from the survey of executives suggests that in most companies, the major source of new products ideas is the top management. These efforts are supplemented with analysis of foreign technology/ products or competitors’ products. Seldom do companies obtain idea for new product launches from consumers. This is not surprising since the extent of utilization of market research for new products development.
 
The picture then becomes clearer for new product opportunities; companies depends either on the secondary technology available in some markets. There is hardly any serious and systematic effort to understand consumer’s needs and requirement in the context of competing offers and naturally the market opportunities thus imagined to have existed turn out to be here mirages!
 

Failure in Integrating Customer’s Choice / Ideas in New Product Offering

 
Consumers do not pay for mere ideas; they only buy tangible offers that satisfy their needs. Companies, therefore, need to translate their brilliant ideas for new brand sand products into tangible offers that spell out the specific benefits that the new offer will provide, the needs that they will satisfy and the cost that the consumers will have to bear.
 
This phase of transforming new ideas into tangible and viable market offer is very critical stage and is perhaps the stage where the firms commit major resource. But then can any firm take such major decisions without an assessment of likely consumer acceptance of the proposed new offer? In reality, unfortunately, many firms do not seem to be marking sufficient efforts in assessing consumers’ reaction abut the new proposal and thus estimating the risks involved before investing huge resource to develop new offers.

Further findings of the study suggest that 44 per cent of the firms do not carry out a formal concept testing and another 30 percent do it only occasionally. Data further suggests that 53 percent of the companies never or seldom make a per assessment of the financial viability of the proposed new products/brand before proceeding further with introduction plans.
 
These indications suggest that many a firms let pass occasion’s access consumer preference carefully and fine-tune their proposal to reflect the value propositions of consumers. They slides over issues like leverage strengths of brands and appropriateness of equity of the brand for the proposed new product. Many a times firms even underplay the question as to whether or not the whole scheme makes the commercial sense.

Given such limited in sight in to the likely future potential of the new venture, companies end up courting disaster. In fact, many sad endings could have been averted if only companies showed little more diligence in assessing consumer reactions to the new proposal and estimating commercial viability before making major resource commitments.
 

Failure In Product Testing

 
If the core product that you are offering to consumers does not provide the functional benefits that it is intended to provide, then no amount of advertisement and publicity can salvage the situation. Therefore, it is extremely important to ensure that the basic product meets consumer requirement.
 
Research data revealed that nearly 56 percent of companies do test their products either frequently or almost always. Out of the remaining, 44 percent either never or rarely test their products. In all probability, the proportion of your offer, you do not have much to worry. However, even a good product will not survive if it needs to be made either before the invest in manufacturing and/or later. Many new brand failures in India today are more failures of concept rather than failures of basic product.
 
This observation suggests that you not only need to test the product to ensure that the functional performance under the laboratory as well as field conditions is satisfactory, but also it does address the felt needs of consumers better than competitors. This is also an activity, which will provide valid inputs to assess the likely market acceptance of the proposed new brand by way of volume prediction. This input certainly helps in assessing commercial viability of the proposal. Research findings suggest that most of the firms carry out some financial analysis at this stage. 
Tags : MARKETING MANAGEMENT - New Products Development Strategies
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