I wanted to devote a chapter to the curve of the product for the simplicity of the subject and why and one of the most important factors to send a company to whores. In the end, the companies supported what and who sell the product.
And of course the first of his career, but also of common sense among all people, a product that began as a novelty and so everyone wants to keep it that after the aging product per se or because of other competitors offering superior products and for both sales decline and finally the product becomes obsolete, it sells for less, to inequality. This happens with all products and what is called the curve of the product, with industries or products with curves more or less extensive in time, but ultimately exponential growth, reduction paulatina and death.
It is true that within the corva the product is changed slightly to recover sales, but an intermediate stage and that no pregudica the end irremediabili product. I do not want to go too in this detail because the important thing and the concept propio of corva.
If these three steps are true and they are, why we continue to make plans "flat"? This and plans on which our product is not subject or almost never only slightly, this inexorable law as strong as that of gravity!
This was a form to send a quick whores the company. To think that our product will remain unchanged stable happen what happens in the market, thinking that with more promotions, restylings with intermediate or more advertising our product will always sell anyway.
We build budgets of these premises and we can bring our product to die even before the death of the natural curve of the product. How? And simple, consider the revenue on the product that never arrive, when not getting the revenue it needs to reduce investment in advertising and the product comes out of the consumer's shopping list, we must recover the exit with those few consumers who are approaching and we must give them more commercial advantages, giving more benefits to commercial viability decreases even more so until that can not sustain below cost and the product begins to rot, to sell less and the exponential curve inverts. The trend of junior managers and think that these things only sucedió in theory, that there is always time to recover a product and that the fall is not so fast as ever think that you can not react. And instead there are curves that produced last two years when the life of the product and at least 7. Fast growth, tired and falling fast.
At this point we have already sacrificed a product. And in the end one could say that should be, and only a product. But what happens with the product that will replace it? Li There are two theories: the possibility that the CEO has to deliver results and what happens in reality the fruit of history.
The possibility, the idea that the new product will sell the same levels of the launch of the first, that we learned of errors, usually made by a predecessor, and with what we have learned a curve nearly flat for the next few years of life of the product. Too many assumptions! Too easy! If it were so there would be only successful products in the market, and this would be infinity.
Instead what happens? First, the new product will start from a lower dell'anteriore product knowledge that he has lost over time. Second, the image of the product that will be replaced because that will lower enjoyed incredible for such discounts de sell it and the base of consumers who buy at last be so few that the rest of pensara potential consumers that the product and poor. Third, sendo so poor that basis, the potential renewal of the product among consumers who have already purchased the previous declines, having to go to conquer other consumers who have other products. Fourth, the value for those consumers who have purchased the previous product will be so low due to discounts final of life, which will not be able to buy the new and remain unhappy moving to other products. Fifth, there can campaign in a month or two to upset the consciences of consumers if we are talking about a market where there are multiple products, only if we are faced with a product and a new technology in the market, but stravolgente a novelty. Sixth, there can generate enough financial means to support a launch able to recover the lost awarness during four, five or six years.
Where all this leads us? Leads us to that if the CEO has pledged to have a flat curve or you're with him or you will go or send you away. For the company that happens and that the market and market rules were always there. If you were lucky and there was a growing global market, you've grown at least in terms of volume and manage to field for a while 'until the next phase of the market. If you have not been lucky and the market remained stable, you have helped greatly to burn cash, to spend more than they had planned to send whores and the P & L. If this is already weak, then send to the company whores.
Planning and important, but good planning and revenues and the costs even more. Are obvious, but there will always a more "sabio" who may believe that with the obvious. The curves are a product of economic regulation, and as price elasticity. There are rules that must be interpreted and how best to interpret the best value and generate more opportunities for success we have.
And so easy to put the numbers in an excel, which sometimes think someone with no implication that only after enough change and that afecta only to excel, which does not affect the reality, and instead the consequences are very real.
