Final answer:
To avoid new-product failure, focus on customer benefits and learn from past mistakes, embrace the lesson of sunk costs by focusing on future performance, and hone in on a company's core competencies for successful product development.
Step-by-step explanation:
To avoid new-product failure, new-product expert Robert M. McMath suggests focusing on customer benefits and learning from the past. This approach emphasizes the importance of understanding the customer's needs and creating value that resonates with the market. Companies should conduct thorough research to gather information from customers and other stakeholders which can provide valuable insights into the product's development.
Learning from past mistakes is vital for continuous improvement. Firms must acknowledge sunk costs and make future-oriented decisions, avoiding the trap of persisting with a failing product simply because significant resources were invested. The lesson of sunk costs is to disregard them when making present decisions, focusing instead on how the product will perform moving forward.
In addition, honing a business's core competencies is often more successful than diversifying into a wide range of products. A core competency approach allows for specialization, enabling a company to excel and innovate within their niche, which ultimately can lead to a more successful product launch. Implementing strategies such as expert consultations, root cause analysis, and prototyping with subsequent feedback loops can further enhance the product development process and reduce the likelihood of failure.