While many businesses invest heavily in research and development to bring new products to market, some still fail to gain commercial success, and their investment doesn’t yield a good return.
There are many factors that can make a difference to whether a product is successful and some, such as external economic factors, are out of a company’s control. However, there are failures that come down to businesses making certain errors at the product development stage.
Products can sell themselves short, if, at development stage, there is a failure to recognise their inherent value. If this results in undercharging for the product, the business fails to get the return it should, because it has failed to see the potential in the product and the profits it might generate.
Another commercial failure arises from over-engineering a product at development stage. This is where the product is either not user-friendly enough, or has too many features.
If, when developing the product, no-one has thought clearly enough about what the consumer will want, then the concept is likely to be flawed
In the end, the company will find nobody is willing to pay the price it needs to charge to cover its manufacturing costs. It will have to offer discounts, which means failing to make a profit, or to recover its costs.
There are also those products that fail to get out of development, stuck in limbo because the company’s decision-making hierarchy fails to recognise their potential.
Pricing is crucial for a product’s success in the marketplace. To get the pricing right requires that a business develops and designs its products with an end price in mind.
This stresses the vital importance of a collaborative approach to product development, that takes in developers and marketers, and keeps an eye on the financial implications of decision-making
Proper pricing comes from a knowledge and understanding of the target market and the profile of the customer the product will be aimed at.
Product development, however innovative, cannot function in isolation, if it is to result in commercial success and a solid return on investment.
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