Wednesday, December 16, 2015

Product deletion

Product deletion is a process of eliminating a product from the product mix, usually because it no longer satisfies a significant number of customers.  Product deletion may occur at any time. However a company generally does so when the product has reached the decline stage of the product life cycle or when sales begin showing a dramatic downward shift and profit erode.

A declining product reduces an organization’s profitability and drains resources that could be used to modify other products or develop a new one. On business armlets, product deletions may become quite complex, involving not just communication with customers, but also existing long-term contracts remaining estimated demand, carful production planning and estimated demand for spare parts. It is also complex decision that is likely to have ripple throughout the organization.

No manager will want to be associated with a product failure and may either completely abandon the sinking ship or there may be tendency to hold on and continue to channel resources to possible losing proposition.

Some organizations delete products only after the products have become heavy financial burdens. A better approach is one form of systematic review in which each product is evaluated periodically to determine its impact on the overall effectiveness of the firm’s product mix.

The product deletion process consists of four stages:
*Detection of weak products
*Analysis of the weak products identified
*decision to eliminate the product
*Implementation of the deletion decision
Product deletion

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