The process of deleting a product is the most difficult decision that a company needs to take when a particular product is not performing in a way it was desired to be. There is also many advantages that the company gets as a result of product deletion and hence the process of product deletion becomes important for the company. Some reasons why product deletion is important are :
- A drain on financial resources of the firm : If a product is not running properly in the market and is not generating enough revenue though it is been provided with all the financial resources of the company, the resources that are invested would be wasted if it is used for weak product, those resources can be used to produce a new product that might do better than the existing product.
- Marketing problems: Sometimes there is a situation that a company creates a large number of products in a single line. This leads to the overpopulation of the products and the marketing resources are used too thinly. Also there are chances of excess competition among the company’s own set of products and creates confusion in the minds of the customers. In these cases the companies go for deletion of the product.
- Managerial problems: When a product is weak it acts as a burden on the company and the management attention. A weak product may require an intense managerial efforts with respect to its price, distribution, sales etc. A weak product may also lead to weakening the image of the company and dissatisfaction among the intermediaries
Some rational reasons for neglecting the deletion of the product
- Revitalization- This is the situation when the company feels that still there are chances of saving the product where it can be revitalized using the new features or any other way.
- Scope in the product line– Even if there is no possible alternative for saving the product and avoid its deletion and the effect on the company in deleting a product is also too large. In this case the management feels that the loss of product deletion can only be stopped by introducing a new product in the same product line.
- Defrayal of overheads – The product can be retained in the company to deal with the defrayal of the overheads. Since the total cost of the company is shared by many products and if one product is deleted there would be burden on the other products who are sharing the costs.