UK manufacturing is often most successful when it is both agile and innovative. Consequently, many manufacturers put a lot of time and energy into research and development, so that they can come up with new products.
However, commercial success can prove elusive, with the money companies invest in new product development failing to give them a return.
What can these manufacturers do to ensure that they monetise their innovations?
Reasons for Failure
“Some product failures are down to forces beyond a business’ control, such as overall economic conditions, or supply chain problems,” explains Jeremy Hacking of Finch Electronics. “There are also key issues that manufacturers can address to lessen the odds of failure.”
Jeremy specialises in bespoke electronic design and manufacturing and has a wealth of experience in developing products across a diverse range of sectors.
“There are products that sell themselves short, where the developer fails to realise the intrinsic value of their product and therefore undercharges for it”
“There’s a failure to see the true potential of something, even on the part of its developers,” Jeremy says, “which means not seeing the opportunity for large profits.”
At the opposite end of the scale are products that are over-engineered. Here, the developer has not thought sufficiently about what the customer wants. The result is a product with either the wrong features, or too many of them.
“The over-engineered product has features that the customer isn’t willing to pay extra for . This leaves the seller with no choice but to offer discounts,” Jeremy suggests, “and the result is that they then cannot cover the costs.”
This is a failure of process, but often, the manufacturer will attribute blame to the product.
“There are products where the management hierarchy fails to recognise their potential, so they remain trapped in development hell, or a kind of indecision-led limbo, until they are abandoned”
“Sometimes this is a case of not seeing clearly the right target audience for what would otherwise be a successful product,” explains Jeremy.
Finally, there are those products that do make it to market, but never should have done so.
“Often these are the wrong answer to the right question, or the answer to a question no one has yet asked, a manufactured solution to a non-existent problem,” Jeremy remarks.
The Importance of Pricing
A crucial issue is pricing, and having clear discussions about what customers want, and will be willing to pay for.
“Building a clear profile of your target customer before rolling out production is essential. Design the product with the price in mind.
Jeremy points out that manufacturers should also look at their supply chains to maximise cost-effectiveness, and think about the collaborative process early on, so that issues like marketing and pricing are addressed pre-production.
Manufacturing success rests on how well the product actually does in the marketplace, and whether, conceptually, it stands up,” Jeremy concludes.