Once a company has carefully segmented the market, chosen its target customers, identifying their needs and determined its market positioning, it is better able to develop new products. Marketer play a key role in the new product process , by identifying and evaluating new product ideas and working with R & D and others in every stage of development.

New product development shapes the company’s future. New product launch is a very complex, time consuming and is financially a big issue for any company. There is expectation from every new product launched to have high sales, to have good margins, to capture market share and thus become market leader. These are the expectations however the real picture may be not so good or as expected. Many a time the products introduce are flops and thus results in loss. This loss may be in terms of monetary as lot of money is involved in launching a new product. It also results in loss in terms of image.

Only 8% of new products survive for more than one year. A 92 % failure rate does little to promote the current efficiency of company marketing. The reasons some business fail to innovate is not that they shy away from ideas; it is that they engage in hopelessly romantic one-at great cost in men / women and money. An idea must meet rigorous tests of practicality if it is to be capable of making a business successful in the future.

Source: Dr. Peter Drucker, Harvard Business Review, 1994.

Why Some Products Fail and Others Succeed

• Reasons for Product Failure

– Product’s value or features did not match customer needs

– Ineffective or inconsistent branding that failed to convey the right message

or image to customers

– Technical or design problems

– Poor market timing

– Overestimation of market size

– Ineffective promotion

– Insufficient distribution