How to kill a product
The correct process goes through the following steps. The first is the analysis of the reasons why the product has not been successful. If there is a remedy, put it, to try to maintain it, but if there is no solution, eliminate it. As Gerard Costa insists, the internal workshop must be done constantly: at least twice a year, at Christmas and in summer.
Next, and once the decision to eliminate a product has been made, it must be properly communicated. The customer is increasingly demanding. You have to give as much information as possible. In a matter as sensitive as the recall of a product, it is necessary to be transparent with distributors, sales forces and customers. “Many times this rule is not followed. When we notify the distributor that we are going to remove the item shortly, many times they do not trust that we will keep our word and then they want to remove it from their shelves and return the entire stock to us. In many cases, it happens that when the marketing department informs the sales team that a product is going to be withdrawn, they cease their commercial work because they think they will not receive the incentive variable, ”says the Esade professor.
- Explain it to the dealer. Keep in mind that removing a product means leaving a gap in the warehouse, on the shelves and in the stands. You generate a problem for him, which is why it is necessary to offer him all possible guarantees and give him the necessary facilities. In Arjowiggins, for example, they have an established protocol to notify distributors, who are informed at least six months in advance so that they can release their stock and then compensate by giving them new catalogs. In this regard, Rosario Carrío, general director of Juguetes Cayro, states:? “Our end customer is both the consumer and the distributor, because it is the latter who chooses to choose it from the wide range of references that we offer, or to exhibit it in a prominent or second-line location. If for any reason the distributor is not attracted to the product (for example, because the salesperson has not been able to explain it) we can find ourselves in a situation where the product dies without ever having lived ”.
- Communicate it to the consumer. This point depends a lot on the experiential relationship with the product. When it is more personal and permanent, you have to know how to explain it (cars, colonies). In the case of vehicles, because the user is scared to think that he is going to run out of spare parts; then it is necessary to ensure that supply and maintenance are assured. In the case of colognes or cosmetic products, the relationship is even more personal. Here it is advisable to notify that it is going to be withdrawn, although there is also usually a cycle policy where renewed versions of the product appear continuously.
- Don't forget about internal communication. The commercial department, which will play a major role in the elimination of the product, will have to be fully involved. Many companies forget that it is a task that must be encouraged to avoid, for example, problems with distributors or the return of merchandise that you cannot put on the market. If you cannot offer economic variables, motivate them by promising them a portfolio of a star product.
Planned obsolescence
There are sectors such as textiles or technology where there is a strategy to eliminate products before they expire because they already have the substitute. Here the capacity for innovation is ahead of consumption. In these cases, the old products are withdrawn in a planned way. The manufacturer does not leave the consumer abandoned, but little by little it is giving him facilities to join the new product. We have seen it with VHS videos, we began to observe it with DVDs, with consoles. It is about divesting from the old product, for example, not releasing games or premieres in that format and betting on the new format, so that more and more the consumer is opting for the novelty and in the face of the distributor, it is reducing the stock reducing prices. Continuing with the example of DVDs, in two years it has gone from 300 euros to 50 euros. This concept of planned obsolescence is more intended for thoughtful purchase products. Any initiative will be little to avoid the haraquiri of your product or that your business goes into depression.
For security reasons
Another possibility is that a product has to be recalled for safety-related reasons. When faults of this type are detected, the problem identification system and the ability to solve it must be well organized. Next, it is necessary to inform the market (customers, distributors ...) of what has happened and the measures that are being taken.
Mattel and Nokia have been two of the last big companies affected by a security problem in their products. In both cases, the companies opted to inform consumers openly and in advance through advertising campaigns in the press and with transparency towards the media.
What do experts recommend in cases where the employer detects that a product of his does not meet the sufficient guarantees? Above all, follow the aforementioned line of Nokia and Mattel: maximum transparency and quick recall of the product. In this way, you offer an image of maximum seriousness and rigor. The consequences of withholding important information (especially if consumers may run health or safety risks) or keeping a damaged product can be so serious, legally or financially, that it can lead to the end of a business.
In Product Civil Liability policies, there is the possibility of contracting a policy with coverage for product withdrawal, which is very interesting for SMEs: they cover part of the expenses to remove the merchandise and advertising expenses to warn the consumer of the situation.
Sources:
entrepreneurs.es
Isabel garcia mendez
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