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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