When it comes to new product development, many experts and entrepreneurs will tell you that the rate is around 80-95%. This number has been quoted by Professor Clayton Christensen who now states he never actually made this statement in his book “Fundamental Limits to Growth.” The mortality rates for these failed products are also high with about 35% failing their users significantly.
But what are the reasons for a new product to fail in the market? Here are some of them;
Lack of product uniqueness:
New products need to be introduced in a way that makes them stand out from the competition. The best new ideas will always have some kind of advantage over what’s already on offer, and this can come down to either price or performance- so it’s important for you as an entrepreneur not only to know your product inside out but also be able to communicate its benefits clearly.
Executives often underestimate the strength of competitors or overestimate their own capabilities, which leads them to make over-optimistic calculations. They might do this because it’s tied with marketing a particular product for personal ambitions in the company
A common mistake made by executives when making business decisions is that they fail to assess risks properly and accurate numbers don’t always come out right on paper, but what you see can be very different from reality. Sometimes due diligence should go into every decision before moving forward.
Another reason for the failure of certain products is their price factor. Higher production and distribution costs may lead to higher prices, which in turn prevents them from being sold among buyers that have lower incomes or preferences when it comes down to food items such as middle-class Americans with healthy diets who don’t want cost-cutting measures like reduced salt content found in many prepared foods today due to manufacturers’ desires for profit margins instead at expense of customer satisfaction.
Extent of competition:
A monopolist has an easy time when marketing his product in the case where there are only a few sellers for any type of good, but it becomes more difficult as buyers have many alternatives. If he can’t make his customers satisfied then it’s impossible to be successful.
Faulty distribution policy
A faulty distribution policy can lead to many problems. For example, the goods may not be available when required or they might end up costing more due to an ineffective pricing strategy if you’re trying your luck at marketplaces where it’s difficult for new companies like yourself to establish themselves. And maybe cause product failure.
Marketers know that they have a tough balancing act in terms of keeping up with the latest trends and innovations, while also staying ahead of their competitors. This is because circumstances change so often nowadays- there’s no way to be sure if what you’re doing will still matter 5 years from now.