It is estimated that 70% – 90% of the new products that come on the market each year fail to produce profits. When profits are not there, the product does not have a reason to exist. The numbers speak for themselves, and the percentage of products that fail is literally huge. Today we will focus on the reasons that so many marketers have difficulty introducing new products to their clients.
- Overestimated market size
In most cases, the reason products fail the test of the market is wrong evaluations. The first challenge that they seem to fail in is estimating the market size. How many customers or potential customers are out there to purchase your product? Are those people already engaged with another brand? Assuming there are no competitors in the game, have these people identified the need you want to base your marketing strategy on? Or will you have to convince them they need your product? Answering all of these questions will help a businessman realize the real size of the market and see if they can keep being optimistic about their product.
- Bad design and bad product
The next step is not related to false evaluations but rather has to do with the product itself. People often want to release their products on the market when the timing is right. For example, some businessmen want to catch the Christmas holidays when people start to spend money with more ease. However, while they try to be on time for certain deadlines, they forget to focus on the quality of the product they are about to create. The design is the most critical part, and then the people you are going to partner with for its production are also important. In any case, rushing things will not help, and eventually, competition will beat you to the next corner.
- Wrong positioning
Each product can be sold to different clients and for different reasons. Let’s say you have a chair that is ideal for people with moving disabilities. You can advertise this product as a problem-solver for those who cannot walk. At the same time, why would anyone want to lose the majority of the clients who are people who are completely healthy and not address them? In the meanwhile, if the chair is sold only for people with moving disabilities, its price could be increased. As you see, there are many parameters one has to take into consideration to see how one will sell the product they have designed. If you attempt to reach a different audience, you will also have to point out different characteristics of the product.
- Underestimated costs
Returning to issues of evaluation, the cost is a considerable parameter that will determine whether a product can be profitable or not. To be fair, predicting how a product will go is not easy, if even possible. The brilliance of the business world is that no one can precisely predict how the journey of a new product will evolve unless they see it released in the market. Many parameters will affect this journey, and the cost itself can change as time goes by. For instance, if a product does not do well at first and the business owner has already invested a serious amount of money in it, they may decide to spend a little more on advertising to help it make its first steps. Advertising is a part of the product’s costs, and it seems that it cannot always be predicted correctly. Once the business starts, there are no guarantees for anything.
- Underestimated competition
The same rule applies to competition. When you design your product and the approach you will have on the market, you are aware of the competition that exists at that moment. No one can stop your competitors from working on their products and ideas as you work on yours. In addition, no one can tell how the competitors will react after you come out with a new product. This is something no one can tell right from the beginning, and again it adds a little mystery to how things will evolve.
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