“New”, “Improved” – (but not as good) Why do companies change successful products?

Why do companies insist on changing the content or specification of their successful products without the consent or request of their customers?

Microsoft made the disastrous product upgrade from the successful, popular and reliable Windows XP to the unpopular and unreliable Vista, which then in turn had to be hurriedly replaced with the successful Windows 7. Kellogg’s altered the recipe for their Special K product and received numerous public complaints by customers because they liked the product as it was and did not want it changed. Fans of Sailor Jerry Spiced Rum in the UK launched an internet campaign to force brand owners First Drinks to change its formula back to the way it was before the product’s re-launch. Then there was Coca Cola’s launch of New Coke, replacing their original product, which then had to be returned following customers’ rejection of New Coke.

Why should companies that have products that are long established, valued by their customers and profitable to their business, seek to “improve” and change them, not because their customers want them to do so, – but because they can? Is the change to benefit the customer, improve the profitability, or to satisfy the personal achievement aspirations of an ambitious executive?
Unnecessary changes to established brands and image can produce a serious back lash from loyal customers, and seriously damage the business.

The principle task of every business is to make money, by the provision of products and services that are designed to provide the solutions to problems that customers have. Successful businesses have to understand customer’s problems and to adapt to meet their changing needs. Yesterday’s products were designed to solve yesterday’s problems and without development, may no longer be the solution to the problem that the customer has today.

While products and their brand image are developed and owned by companies, they are paid for by the customers who buy them. In purchasing the product, the customer expects that the product will satisfy their requirements, whatever they may be. Regular customers expect that the product will deliver to their expectations every time and they come to rely on that expectation. Thus, in a sense, the customer has ownership of the product. Customers have the money, but if the product does not meet their expectation, they do not have to buy it..

Some products are relatively unchanged after many years, because they fully meet customer requirements and there is no benefit to be gained either by the customer or manufacturer in changing them. Other products change and develop to meet evolving customer needs, or improved production methods and materials.

While customers may have an initial resistance to a change in the products that they buy, they generally accept them, if they can be shown how the change actually benefits them. However, simply adding additional features to a product or service that does not clearly benefit the customer, will not increase its value in the customer’s eyes.

For the commercial manager, responsible for producing and maximising profitable income, change is an important factor of business. Making changes to the product or the manner of its delivery may be necessary in order to be more efficient, improve the product or service with additional or improved customer benefits, or perhaps to modernise its appearance, especially with a long established product.

So how should the commercial manager consider the need for change?
Before embarking on any change, however small, the commercial manager should consider several questions, because of the potential consequences.

1. Who is advocating the change – which individuals, what are their reasons?
2. Are changes necessary to meet the changing needs of the customer or the requirement of the product/service provider?
3. If the underlying problems are understood, would a change to the product, its image or the company procedure be an effective answer?
4. A change to a product or service may improve efficiency and profitability, but what would be the effect on the customers’ satisfaction or their perceived image of the business?
5. Who benefits from the proposed change, the customer or the company? – How do they benefit?
6. If the change is cosmetic, how will it benefit the customer’s perceived image of the product and company? How do you know?

For the commercial manager, responsible for the long term income of the business, there is always danger in the possible long term consequences of accepting change that are not customer driven. Many changes that are made by organisations in both the public and private sectors are frequently instigated by executives who “want to make their mark” in the organisation, using it as a stepping stone of achievement to the next job, and moving on before the consequences of their decision making are apparent. All changes to product and service cost money, thus it is important to trial changes wherever possible to ensure that they are acceptable and beneficial to the customer, before committing to irrevocable and expensive investment. Customers provide the business income and it they who decide on the acceptability of change, by maintaining or withholding their custom.

Established and successful products may still need to change over the course of time in order to meet changing conditions and customer requirements. But experience shows that change for the sake of it, especially to satisfy the whims of ambitious executives can easily be damaging to the product and the company’s fortunes. In the eyes of the customer, the product that is “New” and “improved” may not be as good as the original, in which case, perhaps companies should consider that “if it ant broke, don’t fix it.”

© N.C.Watkis, Contract Marketing Service 28 Oct 13

October 31, 2013  Tags: , , , , , , , ,   Posted in: business development, business efficiency, Business Marketing, business performance improvement, business performance indicators, business performance measurement