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Saturday, 22 September 2018

Factors Influencing New Product Success

        What factors seem to affect new product success in a positive manner? If these factors can be isolated, then the marketing manager and others can concentrate on them when developing a marketing new products or services. A successful product is often defined as one that meets management objectives. Why is it that some products meet these objectives and others do not?

       A study of 200 new business products(successes and failures) introduced by some 100 companies revealed 3 major factors that differentiate winners from losers. These factors were

 A. Superiority of the new products.

 B. Strong market orientation and marketing proficiency.

 C. Superior technological and production capabilities.

       Superiority of the product means superiority over competing products in terms of better meeting customer needs, unique features not found in competitive offerings, high quality, the products ability to perform unique tests, innovativeness and lower cost to the customer.

   Strong marketing was characterized by good research prior to product development, good understanding of the market, strong marketing and distribution efforts, and guidance by knowledgeable marketing people.
  Superior technology and production capabilities implied that the company had a strong and capable engineering and production base for the new product. These characteristics were found in the product successors that were studied but they were not found with failures.
   Another study of new product introduced in business marketing companies in Australia revealed the major determinants of success to be the following :

1. New product synergy with existing company marketing skills.
2. New products energy with existing company technical and manufacturing skills.
3. High product quality.
4. Product offered significant new benefits.
5. Appropriate target market and pricing.
6. Good distribution channels/support.

     Synergy referred to the fit between the product and company capabilities. For example, if a new product could be easily sold by existing company sales people, the success rate might be higher than if new sales people had to be hired and trained to sell the product. Similarly, if the new product were compatible with existing skills, the product had a better chance of success than if those skills had to be learnt.
  Still another research project found these three dimensions of new product success :
1. Financial performance
2. market impact
3. Opportunity window.
  The financial performance dimension included relative profit and sales of the new product, profit level, payback period, and the meeting of sales and product objectives.

   Market impact was comprised of the impact of the product in both foreign and domestic markets in terms of market shares.
     Opportunity windows involves the degree to which the new product opened up opportunities in terms of other products or market areas.
 Within each of these dimensions, components were found that were highly correlated with new product success. Some of the major components were well-defined customer needs before the product launch, product was seen as superior to competitive products, high-quality products strong feet between the product and company's technical abilities, clearly defined target market, and products ability to perform unique task for the customer.

   Looking at all these studies it appears that certain factors positively affect new product and services success. As may be suspected, high quality offerings are more likely to succeed the lower quality product. If the product of service is perceived as superior to competitive offerings by customers in the target market it is more likely to succeed. The product that better meets consumers needs and offering benefits not found in competitive products stand a better chance of succeeding. In addition, the better the fit between the new product and the company's technical and marketing expertise, the more likely the product will succeed. Finally new product success is enhanced when competent and faithful marketing personnel direct the products launch.