With every product development, launch and support there are many risks that can lead to failure. Understanding and managing risks will enable the product team to potentially avoid these identifiable risks or manage them effectively if they surface.
Failure at launch
When a product is launched, your team must be equipped to sell the value proposition, features, and benefit the product brings the customer. To do sell the product, the sales team must be trained and aware of the alternative options in the market. Strategically training the team will enable their motivation, competency, and confidence to drive customer purchase decisions. It is essential for the customer to trust the sales individual and feel that they are highly competent. The lack of trustworthiness of the sales person will reflect poorly on the company, brand, and product overall.
Poor promotion is a common reason for product failure at launch. If customers are not exposed to the product they will not discover the benefits of your products and ultimately purchase it. Customers must be motivated and able to search and find the product. If the product is a consumer product the customer’s involvement will be low. In those low involvement situations, ensuring the product is easy to find (available at local stores or through online e-commerce) and is attractive to consumes, the product will have a high impact on attracting customer purchases. On the other hand, if the product is a specialty product the customer will likely search the available options in the market. The messaging of the product will be key to impact the customer’s recognition that the product will fit their need and stands-out when compared to competitors. If the website or search route makes finding your product or understanding the value difficult chances are that you will be losing these potential customers.
There are companies that have expanded into products outside of their main industries. Unfortunately this can be very risky. Usually entering a new market is a strategy to being in revenue and profitability from a new source of customers. Entering a new market requires both the foresight to know that the current existing strategies will not be suited for future opportunities and the discipline to enact fundamental shifts with in the corporate focus.
Being late to the market or being too early can influence the products ability to compete with the preexisting alternatives. This was discussed in a previous blog Factors Impacting Product Success. For some innovative technologies early release can be highly detrimental since consumers are not ready for this new technology.
Another key factor is the product price. With the many product options in the market, it is important to understand how consumers view product price and how the price reflects an image on the product. Consumers associate product price with the quality of the product. An article on the Business Daily by low prices can backfire for retailers since consumers may associate cheap prices with cheap products. The article also explains that consumers why see cheap prices as a sign of a great deal.
Do you have risks that you have identified? Please share your story by leaving your comments.