learning within the organisation can be vital to successful NPD. The
organisation needs to facilitate the development of, and access to, infor-
mation. Enabling technologies and methods include: benchmarking,
brainstorming, computer networks, ‘groupware’ – software products
enabling work and knowledge to be shared (e.g. Lotus Notes) and data
warehousing. O’Connor and Galvin (1997) define data warehousing as
constructing a high-level database of all operating and customer data,
and making such a database available to support decision making.■ Why do products fail?
It is reasonable to suggest that an understanding of the pitfalls of product
development can help us to avoid them. When addressing this question,
managers need to consider the nature and background to NPD, as some
types of development activity are inherently more risky than others.
Additionally, the organisation attitude to risk and investment has a baring
on the situation. Common reasons for failure can be summarised as follows:
1 Under investment, where the project is short of funds and lacks the
investment required to establish/sustain it in the market place.
2 The product fails to deliver any customer benefit. This can happen with
technical or scientific advance. While the technology may be innova-
tive, it must be perceived as innovative by the market place, otherwise
it is unlikely to be adopted. Additionally, the product must perform to
the required performance parameters. Remember, quality is defined as
‘fit for purpose’. There needs to be a clear definition of market segment
and how the product offering is positioned.
3 Forecastingis a common source of failure. It was once said ‘ ... forecasting
is difficult, especially if you’re forecasting the future’. This is certainly true!
Often, forecasting errors relate to over optimistic forecasts of demand
and/or under estimates of costs. Managers need to examine the
assumptions supporting forecasts as well as the forecasting techniques
used. Also, time scales for planned development have to be realistic.
4 Internal politics, trade-offs and compromise can result in problems. The
project may lack the support and commitment of staff and vested
interests may conspire against its success. Equally, trade-offs, and
other such factors, may result in the project drifting from its original
target, as internal conflict distracts management. Internal conflict has
been the graveyard of many good product ideas.
5 Industry responseis vital. For example, success may be completely
dependent on retailers stocking products or on the response of
competitors – what happens if they drastically cut price? Such factors
are less controllable, but good quality market research and competitor
intelligence can lessen the negative effects.
While some factors are unpredictable, and projects are a ‘hostage to for-
tune’, most issues are simply a matter of management and marketing.220 Strategic Marketing: Planning and Control