Dec 10, 2007

Failures and Fickle consumers......

Why do products fail?

Products fail when they do not make a profit anymore.
Products fail when consumers choose a different product when they part with their money -- not your product.

Business and products are about profit .... sometimes. A failing product may be kept in the market to complete a basket of goods on offer to consumers. It then has more ad value than anything else -- it assists in the sale of other, more profitable products.

In general, however -- failing products die -- sometimes at great cost to the company that invested heavily in its predicted success.

Many reasons exists for failure.

At the root, however, is perhaps the inability to predict failure at the idea and concept evaluation stage; the apparent inability to act proactively regarding the eventual replacement of a current "cash cow" when that highly successful product starts its decline after many years of superior sales; the inability to understand how fickle consumers can be and how important it is to be in constant touch with their lifestyles, whims, feelings to predict and influence how they will act, react and more. All of this happening while the corporate world is focused on regimes, management systems and regulating actions. It is geared to eradicate "fickleness" -- not embrace it in an "organised" fashion.

How can this cause products to fail after years of development or many successful years in the market?
Many knowledgeable people will tell you that masses of product research, market analysis, sales analysis, trend analysis, ad analysis and more cannot all be wrong. The big picture is important -- markets, segmentation, categories, the brand- and company image. It is true -- all these can contribute to success -- but also to failure.

Why?

One of the most overlooked reasons for failure is the fact that products fail when the market and consumer requirements have been misjudged (although it is a given that here can also be other reasons for failure).

Why does this happen?

Surely -- with all the money spent on market research, more than four out of ten products in the FMCG (especially Food Industry) should succeed -- so what is the problem?

The problem may be that most of the tools used in market- and product research look to the past to identify tendencies and apply that to the current state of affairs, when in fact it should endeavour to predict the future with consumer insight in mind -- what consumers (not companies) live, feel and desire. All the things consumers apparently cannot put into words -- the things that everyone thought up to now, could not be quantified. It can be quantified with great success, but it requires faith and understanding of innovative new tools and protocols -- it requires bravery and trust in an unknown future. In many companies this is still a challenge. Embracing the unfamiliar can seem risky at times and business must really reach a critical stage before the apparent new and unconventional, yet innovative tools are looked at with new insight. By that time, many products already failed. Having successful products in the market and ensuring they stay that way as long as possible, takes bravery, enthusiasm, an innovative spirit, an entrepreneurial view of the world, new research and new possibilities -- it requires the hunger for success.



Fickle consumers do not cause product failures. Once that truth is understood, many products will be managed with new insight to ensure success.



CMB

http://www.ewklibrary.com

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