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Product strategies can fail for any number of reasons. A failure in understanding what a consumer needs or wants are one way. You can also target the wrong market with your product. If it is priced wrong customers will not buy the product.
Further reasons for why a product fails fall into four categories: company, customers, competitors, and environment. In company failures, you have things like poor marketing communications or a failure to meet customer expectations. Customer failures are changes in purchase priorities and higher expectations. Competitor failures include aggressively attacking new competition. Finally, environmental failures can be things like economic changes or changes in societal demands.
Market Segmentation is dividing a market into meaningful smaller markets or submarkets based on common characteristics. Target Marketing is evaluating the market segments, then making decisions about which among them is most worthy of investment for development. Positioning is communicating one or more sources of value to customers in a way that connects needs and wants to what the product has to offer. Positioning strategies are executed through the development of unique combinations of the marketing mix variables.
A company uses market segmentation to break up a market and put it into smaller markets based on commonalities. Once a segmentation approach is done a marketing manager moves on to target marketing. That is where they evaluate the segments and decide which shows the most promise for development. Then it is time for the company to connect its value proposition to a target market which is done through positioning.