The first and foremost reason for new product failure has been identified as poor marketing research.
(article continues below)
The entrepreneur in this case will have poorly judged what exactly the market required in and from a product. He/she will also have gotten misguided conceptions about what the target market's buying patterns, habits and motives are. It is also likely that the entrepreneur overestimated the sales potential of the new product.
New product failure is also known to be the result of technical flaws in the design and/or production of the same. These misdoings often imply that the final product is a failure in both quality and performance. They can also mean that the market finds the product too complicated for use. By and large, flaws in concept and design imply that a new product does not have a competing edge against other alternatives already in the market.
An entrepreneur must be wary of the need to get the new product introduction timing right. There are consequences of bringing the new product to the market too quickly or in delay. New product failure will also result from an assortment of factors including poorly defined strategies, lack of commitment to the product development process and poor overall organization on the part of the entrepreneur.
On the other hand, new product success is equally dependent on a number of factors. First, the new product has to have the ability to satisfy one or more market needs. Secondly, the new product has to have technical and cost advantages over competing products. Third, new product success can only be achieved if the product complements the small enterprise's abilities in terms of production, distribution and selling.
It is certain that new product success, like other facets of success in life, will not come easy. Much sustained effort is required. The entrepreneur must thus have a long-term commitment to new product development such that he/she can learn from the many ups and downs along the way. This long-term commitment must be supplemented by clearly defined strategies for the introduction of new products. It is with such strategies that an entrepreneur will be able to narrow down and identify new products that are in harmony with his/her firm's competencies and the needs of the market. New product success is most likely for a product with at least one of three vantage points – a product advantage, a marketing advantage or a creative advertising/promotion advantage.