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Businesses spend billions of dollars annually on creating new products. This is in almost every industry, from cars to food. But despite this (and the efforts of thousands of product designers and research and development staff), new products fail. Why? There are plenty of reasons and they are quite varied. Before you launch a new product, be sure to be on the lookout for the following.

One of the biggest causes is a failure to understand consumer wants and needs. A product can be revolutionary, but if no one wants it, sales will be abysmal. An excellent example of this is the Segway, which was designed by the famous inventor Dean Kamen. Despite much speculation and hype (including being in a book quoting Steve Jobs and other IT visionaries), sales have been poor as there is a limited market for the product. Only police groups, urban tour guides and, warehouse companies are buying the Segway, not the general population. This has greatly limited sales.

Incorrect pricing also can cause failure. Trip Hawkins, the founder of video game giant Electronic Arts, founded a company known as 3DO. One of its first products was a groundbreaking video game system. It was named Time magazine’s “Product of the year” in 1993. Despite having plenty of cutting edge technology, it was mis-priced at $600 (a small fortune in 1993) and the product was ended after a few years.

The lack of resources and internal support has killed countless products. Businesses only have a limited development budget and usually, there are plenty of competitors vying for the funds. A product might be brilliant but if it doesn’t get the right internal backing, it can be canceled by a committee. This happens to plenty of promising movies, which truly have to stand out of the pile to be green lit. If you have a product idea, be sure to get the right people to back and support your product.

Development can take a long time. If it’s prolonged (or another reason causing a delay for market entry), a product can fail. While you’re developing, the existing players are already in the market. They’re acquiring customers and improving their offering. This issue happened to no other than internet giant Google with its product Lively, which was similar to Second Life. Despite it having the backing of one of the largest and innovative corporations in the world, it failed to get a critical mass of users because it took so long to develop.

Lastly, it can simply be poor execution. Master of Orion 3 was one of the most anticipated computer games of 2003. The two previous iterations were widely considered masterpieces. Unfortunately, none of the original team were involved in its development. The game was released to mixed reviews and was a poor seller.

Develop new products is costly. However, it is very important because it is one of the main ways companies innovate and stay relevant to the market. It is important to pay attention to previous failures so that you can maximize the chances of success.

Posted on Tuesday, February 11, 2020 12:54 PM | Back to top

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