Product Innovation refers to the development of new products, changes in design of established products, or use of new materials or components in the manufacture of established products. The need of introduction of a good or service i.e. either new, or an improved version of previous goods or services is necessary due to following reasons:
- There remain uncertainty in the behavior, tastes, attitudes, likings and preferences of consumers.
- The competitive situations and general atmosphere of the market also changes timely.
- Technical changes and advances also take place with time.
- The needs, wants and expectations of consumers also change with time.
All these changes make it compulsory for every business and industrial enterprise to be in continuous touch with these changes. It also becomes necessary that desired changes must be made in the products of the enterprise so that these changes must meet effectively and successfully. If an enterprise does not change its products according to changing circumstances, it can’t be successful in achieving its marketing objectives.
Thus, when some improvements are introduced in the existing products, then it is called product modification and when a new product is introduced in place of an old product or when a product is represented in the manner that it gives an impression of a new product, it is called product innovation.
Factors responsible for the failure of a new product
The development of & new product is always not successful. There may be following reasons responsible for the failure of product:
The market success depends on the ability of the company to launch the new product in the proper markets at appropriate time and at reasonable price. If these conditions are not match then there may be chances of failure of new product. Hence, the timing of product launch and consumer demand must match for the success of product.
It arises due to technical deficiencies in the process of production. This is one of the fundamental reasons for product failure. Beside this, low-quality, poor design and packaging also leads to product failure. This can be removed by proper product testing.
Generally, severe competition compels products to struggle hard in the market. These can be overcome by proper analysis of market by price cuts (mark down prices), by offering various kinds of discounts, etc., to the consumers. Thus, marketing managers must rely on only authentic and unbiased information for the profit maximization of business enterprise and for the customer satisfaction.
Lack of sales force
The selling is done by personal or impersonal methods. Impersonal methods include advertisement and similar promotional acclivities. But, personal methods are more familiar and more effective promotional activities should be backed by adequate sales forces to introduce the product properly in the market. If salesmen are not trained or do not possess salesmen qualities, the product will not succeed.