Remember when a new update was rolled out for your smartphone and you eagerly downloaded it for the new features? That is the kind of excitement, a product improvement must create. Now try and remember the time when your smartphone failed to get an update because your preferred brand chose to launch a new variant with new features instead of improving the one you possess. How do you think the decision is made? It may appear easy, but it most definitely is not.
A number of factors must be weighed before making the decision to launch a new product. But before we go into those factors, let us consider the factors that determine whether an existing product can be improved. Why? Because according to McKinsey Global Institute the failure rate of new products falls somewhere between 25 per cent and 45 per cent. On the contrary, an existing product has already fought your competitors, it has already carved a niche for itself in the market. It already has a loyal customer base and as an added advantage, improving existing products does not require the expenditure of as many resources as launching a new product would entail. Launching a new product would require more resources and it calls for a new marketing strategy as your target audience has to be made aware of the uniqueness of your product.
When can a product be improved? What factors are to be taken into account when improving a product?
The Life Cycle of your Product
Track the life cycle of your product and only consider making improvements at the stage of growth or maturity. When a product is in the introduction stage, the customers are only starting to take note of your product, any improvement at this stage would just end up confusing the consumer. Give your product the time to garner attention and establish itself in the market. When your product has gained a secure position, consider making improvements but these improvements must solve an issue raised by your customer base or it should add to the overall utility of the product. Improving an existing product can effectively enhance customer satisfaction and gain you, new customers. However, improving products that are ready to retire from the market can be profitless.
If your product has been met with minor criticisms that can be rectified with an improvement, expending resources on it can lead to customer satisfaction and subsequent profits. However, go through a careful analysis of the issues faced by your customers before making changes to your product. The needs of the majority must be given priority and never make the mistake of improving your product just to match a feature offered by your competitor. Focus on your own customer base and get their feedback regularly so that you can satisfy them. Consolidate all the data you have to make an informed choice. For example customer complaints, product reviews and market analysis can help you pinpoint what your product lacks and what can be improved. Not all customer complaints can be solved by improving your product, maybe your product cannot accommodate a certain feature that the customers are demanding. In this case, consider launching a new product.
This is one factor many companies end up overlooking, however, done tastefully this can be a rewarding process. Consider the app icons that keep changing to match the times; a familiar example would be Instagram. Margaret Atwood’s “The Handmaid’s Tale” was re-released in a graphic novel format to match the current popularity of graphic novels and comics. This only stands to prove that innovation and transformation are not limited to a particular field or sector. Product improvement is not always about changing the product itself, sometimes it can be as simple as changing the packaging or spicing up your marketing to match popular trends.
If you feel like none of these factors apply to your existing product, then consider launching a new product. A product would mean more resources and new marketing strategies. The market has to be analysed and you have to check the utility of your product. Insellers take a look at some factors that you need to consider when launching a new product.
Research and Analysis
According to a survey conducted by Copernicus Marketing Consulting and Research, the most commonly cited reasons for product failure include a failure to assess market conditions accurately, targeting the wrong group, a poor configuration of product attributes and benefits, poor pricing strategy, lack of consumer awareness, unrealistic forecast of the revenue, and poor marketing plan implementation. Analysing the market and monitoring customer feedback and getting to know their needs should be the initial steps in launching a product. When collecting data on the market, make sure you study up on your competitors’ strategies as well. This can help you learn from their weaknesses and identify the USP of your product. Introduce a new product only if it solves an issue for the customer. There may be a need for something in the market and if your product can bridge that gap, the success of your product could be assured. According to data from the McKinsey Global Institute, for every 7 product ideas, only 1.5 launches, and only 1 succeeds. After careful consideration of these facts, if you still feel that your product can make an impact, go ahead with your new product.
Launching a new product requires hefty investments. However, the amount of money it will cost you depends upon the type of product you are launching. For example, if your product is just an extension of an established product line, the investment would not be too hefty, but if you are planning to enter a new sector with this product then things would be different. Calculate your budget and the expected ROI. If your calculations say that your budget can cover all the expenses along with the cost of marketing, move ahead with the development of your new product.
There is no single answer out there to the question of whether you should launch a new product or improve the existing ones. Just like all other business decisions, this one is tricky and requires extensive research. Fortune favours the one who has done his research. These pointers will guide you in your research. Whether you choose to launch a new product or improve an existing one, base your decision on accurate information and once the decision is made to move forward with strategies that best suit your decision.