According to Harvard Business School professor Clayton Christensen, 95 % of the new product launches fail. Even the best research agencies put the failure rate at more than 90 %.
According to another research by Harvard Business School, each year30,000 new consumer products are launched, and many of them fail. ”Specifically, 90% of them suffer a product launch failure Why is the failure rate so high?
There are 10 reasons why new product launches fail:
1) The segment analysis is weak.
The segment is too small to generate sufficient volume to amortize fixed overheads. Don’t waste time on micro-segments.
2) Poor Strategic planning.
Planning is still the king. If you have not done enough research on the competition, you will be a toast. You have no knowledge or means of establishing a sustainable competitive advantage
3) Insufficient market research.
Most Indian companies do not undertake serious research. Hence, they are not able to demonstrate a competitive edge in the given category. Their information is either weak or inaccurate, leading to disaster.
4) Leadership does not seek help.
Most of the new launches take place under the leadership of the owner or in the case of a professional set-up, by the CEO, COO, etc, Sometimes ego can play a big role as nobody wants to display weakness and ask for help.
5) Weak portfolio management.
Most of the time, management selects the portfolio due to whims and fancies with the bottom no strong research or logic behind the decision. This poor selection of products leads to wastage leading to pressure on the bottom line.
6) Unskilled marketing team.
Most start-ups are not able to afford top talent and a compromise is made in selecting or vision a good candidate. These underqualified marketing people can easily ruin the launch because of their inexperience.
7) Lack of Marketing Direction.
Most of the new launches take place with no clear-cut purpose or mission or vision for the organization. This leads to no engagement among employees and customers. A new brand with limited engagement has a short shelf life.
8) No structured marketing plan.
Without a structured marketing plan, more often than not, new start-ups face obstacles that are never taken into account. A well-detailed marketing plan has 400 % more chances of success than trusting on gut or instinct.
9) Launching too many products at a time.
Sometimes startups become too ambitious and try to launch too many products at the same time. This leads to your attention and resources spreading too fine. The key products do not get enough marketing support and management attention. This is a recipe for disaster. In a matter of product launch – slow is fast
10) Running out of cash.
I cannot understand this, everyone knows that you should not run out of cash, but most start-ups fail due to lousy financial management.
A start-up wanting to launch a new product need to take care of small issues more than the big issues. During the launch stage, all small issues are big issues.
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About the author: Hemant is the Founder & CEO of branding and marketing firm ”Neeti Brand Accelerator” in Mumbai. He is a brand strategist and has worked with more than 150 brands during last two decades. He is also mentor and coach to SMEs and startups. You can visit the website www.www.neeti.biz. You can also contact him at firstname.lastname@example.org