WHY NEW PROD. UCTS MAY FAIL IN THE MAR KET
1. Inadequate market analysis through poor estimation of potential sales of the new product can lead to product failure.
2. A new product will also fail if the prod uct did not offer any significant advan tage over what competitors are offering.
3. Failure to provide sufficient follow-up after the new product has been introduced can also result in new product failure.
4. High cost of production than anticipated can lead to high price of new products which can eventually lead to product fail ure
5. Competitive strength and reaction of rival firms such as increased promotional activities to protect their market share will lead to new product failure.
6. Poor timing of product introduction such as launching the new product during off season or off-peak periods will affect the anticipated demand, leading to product failure.
7. Technical or production problems such as technical deficient product will lead to new product failure.
8. Poor corporate image of the company can lead to customer becoming hesitant in patronising the company’s product, hence leading to the failure of the new product.
9. Too long test marketing period will make it possible for competitors to capitalize and introduce similar product to the mar ket hence leading to failure of the new product.
10. Problems of distribution such as inad equate channels or distribution strategy will affect the product’s availability to customers, hence causing the new prod uct to fail.
11. The use of inadequate and ineffective promotional strategy can cause the new product to fail.
12. A new product will fail if the price is too high.
13. Poor product performance that fails to meet customer expectations will cause the new product to fail
14. Failure to train marketing personnel to handle the new product can lead to product failure.
15. Poor product branding such as using of fensive brand names and symbols can ad make a product fail.
Attributes of a product brand
(i) The brand name should be easily remembered
(ii) The brand symbol should be easily fotoub recognised subbe
(iii) The trade mark should be unique
(iv) New and attractive brand marks should be used
(v) The brand name should be short.
(vi) The brand name should be easy to pro nounce.
(vii) It should reflect the nature of the prod
(viii) The brand name should be legally safe.
Industrial goods are products that companies purchase to make other products, which they then sell. Some are used directly in the production of the products for resale, and some are used indirectly. Unlike consumer goods, industrial goods are classified on the basis of their use rather than the customer’s buying habits. These goods are divided into five subcategories: installations, accessory equipment, raw materials, fabricated parts and materials, and industrial supplies.
Industrial goods also carry designations related to their durability. Durable industrial goods that cost large sums of money are referred to as capital items. Non-durable industrial goods that are used up within a year are called expense items.
a) Installations: Installations are majo capital items that are typically used directly in the production of goods. Some installations, such as conveyor systems, robotic equipment and machine tools, are designed and built for specialised situations. Other installations such as stamping machines, large commercial ovens, and computerised axial tomography (CAT) scan machines are built to a standard design but can be modified to meet individual requirements.
The purchase of installations requires extensive research and careful decision-making on the part of the buyer. Manufacturers of installations can make their availability known through advertising. However, actual sale of installations requires the technical knowledge and assistance that can best be provided by personal selling.
(b) Accessory equipment: Goods that fall into the subcategory of accessory equipment are capital items that are less expensive and have shorter lives than installations. Examples include hand tools, computers, desk calculators, and forklifts. While some types of accessory equipment, such as hand tools, are involved directly in the production process, most are only indirectly involved.
The relatively low unit value of accessory equipment, combined with a market made up of buyers from several different types of businesses, dictates a broad marketing strategy. Sellers rely heavily on advertisement in trade publications and mailings to purchasing agents and other business buyers. When personal selling is needed it is usually done by intermediaries such as wholesalers.
c) Raw Materials: Raw materials are products that are purchased in their raw state for the purpose of processing them into consumer or industrial goods. Examples are iron ore, crude oil, diamond, copper, timber, wheat and leather. Some (e.g. wheat) may be converted directly into another consumer product (cereal). Others (e.g. timber) may be converted into an intermediate product (lumber) to be resold for use in another industry (construction).
Most raw materials are graded according adto quality so that there is some assurance of consistency within each grade. There is, however, a little difference between offerings within a grade. Consequently, sales negotiations focus on price, deliveory and credit terms. This negotiation and the fact that raw materials are ordinarily sold in large quantities make personal selling the principal marketing approach for these goods.
(d) Fabricated parts and materials: Fabricated parts are items that are purchased to be placed in the final product without further processing. Fabricated materials, on the other hand, require additional processing before being placed in the end product. Many industries, including the auto industry rely heavily on fabricated parts. Automakers use such fabricated parts as batteries, sun roofs, windshields, and spark plugs. They also use several fabricated materials, including steel and upholstery fabric. As a matter of fact, many industries actually buy more fabricated items than raw materials.
Buyers of fabricated parts and materials have well-defined specifications for their needs. They may work closely with a company in designing the components or materials they require, or they may bids from several companies. In either case, in order to be in a position to get the business, personal contact must be maintained with the buyers over time. Here again, personal selling is a key component in the marketing strategy.
(e) Industrial supplies: Industrial supplies are frequently purchased expense items. They contribute indirectly to the production of final products or to the administration of the production process. Supplies include computer paper, light bulbs, lubrication oil, cleaning supplies and office supplies.
Buyers of industrial supplies do not spend a great deal of time on their purchasing decisions unless they are ordering large quantities. As a result, companies marketing supplies place emphasis on advertising particularly in the form of catalogue for business buyers. When large orders are at stake, sales representatives may be used.
It is not always clear whether a product is a consumer good or an industrial good. The key to them is to identify what the buyer intends to make of the good. Goods that are in their final form are ready to be consumed, and are bought to be resold to the final consumer are classified as consumer goods. On the other hand, if they are bought by a business for its own use, they are considered industrial goods. Some items, such as flour and pick-up
trucks, can fall into either classification depending on how they are used. Flou purchased by a supermarket for resale would be classified as a consumer good but flour purchased by a bakery to make pastries would be classified as an industrial good. A pickup truck bought for personal use is a consumer good; if purchased to transport lawnmowers for a lawn service, it is an industrial good.
CAUSES OF CUSTOMER DISSATISFAC TION IN A PRODUCT
1. Poor service delivery by the company leads to customer dissatisfaction
2. Fraudulent practices by staff can lead to customer dissatisfaction
3. Inadequate packing space can lead to fur customer dissatisfaction.
4. Slow response to customers’ request will bring about dissatisfaction of customers.
5. Poor product quality which cannot meet the needs of customer will lead to customers’ dissatisfaction.
6. Bad behaviours of staff can lead to customer’ dissatisfaction
7. Customer dissatisfaction can result from excessive charges from the company.
8. Inaccessible business location can lead to customer’ dissatisfaction.
9. Harmful effects of a product can cause customer dissatisfaction.
GOODS AND SERVICES
A good is something that you can use or consume, like food or CDs or books or a car or clothes. You buy a good with the idea that you will use it, either just once or over and over again. A service is something that someone does for you, like giving you a haircut or fixing you dinner or even teaching you marketing. A service, according to Kotler (1988), is any act or performance that one party can offer to another ht that is essentially intangible and does not result if in ownership of anything. Its production may or may not be tied to a physical product.
Services are intangible products that cannot be C- seen or touched; they are provided to consumers or other companies. A physician provides ny healthcare to patients. Communication companies provide services such as Internet access, television programming and the ability to make local or long-distance telephone calls. Banks provide a range of financial services to customers, such as checking accounts and investment opportunities. Other companies provide services such as lawn care, plumbing home repair, business consulting, transportation etc.
There are differences between services and goods. The first is that a service is an intangible process that cannot be weighed or measured, whereas a good is a tangible output of a process that has physical dimensions. This distinction has important business implications since a service innovation, unlike a product innovation, cannot be patented. Thus, a company with a new concept must expand rapidly before competitors copy its procedures. Service intangibility presents a problem for customers since, unlike with a physical product, they cannot try it out and test it before purchase.
The second is that a service requires some degree of interaction with the customer for it to be a service. The interaction may be brief, but it must exist for the service to be complete. Where face-to-face service is required, the service facility must be designed to handle the customer’s presence. Goods, on the other hand, are generally produced in a facility separate from the customer. They can be made according to a production schedule that is efficient for the company.
The third is that services, with t of hard technologies such as ATMs and information technologies such as answering 2. machines and automated Internet exchanges, are inherently heterogeneous-they vary from day to day and even hour by hour as a function of the attitudes of the customers and the servers.
Thus, even highly scripted work such as that 3. found in call centre can produce unpredictable outcomes. Goods, in contrast, can be produced 4. to meet very tight specifications day-in and day out with essentially zero variability. In those cases where a defective good is produced, it can be reworked or scrapped.
The fourth is that services as a process 6. are perishable and time-dependent, and unlike 7. goods, they cannot be stored.
Both goods and services need not be driven by economic motives. Several times, goods and services are linked closely and cannot be detached. For example, on the purchase of a car, the good is the car but the processing, the provision of accessories, and after-sales activities are all services. It is essential to note that the differences between pure goods and pure services are in contrast but most goods and services exist in between with a mix of both. For instance, in a restaurant, food refers to goods while the service is the waiters offering the ambience amd the setting of tables among others.
1. What is a product.
2. Write a short note on each of the following types of consumer goods with examples:
(a) Convenience goods.
(b) Shopping goods.
(c) Specialty goods.
3. What are industrial goods? Give examples.
4. Differentiate between goods and services.
5. (a) What is a product? (b) Distinguish between product and production concepts. (c) State seven reasons why all new products may fail in the market?
6. State four attributes of a product brand
7. State six causes of customer dissatis faction in a product.090
8 Explain the following classifications of products with two examples each from agricultural-based products.
(a) industrial products; (b) consumers products; (c) primary products;
(d) secondary products.