MarketingProfs' Members Register for B2B Forum 2010 for just $695! (good until 11/30) »

Ask your question ... sign up today! It's FREE!
Student Questions     
 
This question has been closed, and points have been awarded.
When A Product Is Not Profitable But Successful
Posted By: marco_tsc on 6/18/2006 10:15 AM (CST) 125 Points
a product can be profitable but unsuccessful, then when does a product be unprofitable but successful?
Please express your opinions with relevant example(s) if possible.

Posted by: W.M.M.A. Member Response
6/18/2006 10:20 AM (CST)
This question has been asked and answered in previous posts.
 
Posted by: wnelson Member Response
6/18/2006 10:39 AM (CST)
You asked this question previously!

Please ask questions pertaining to your "homework" in the Student category so we can make sure the answers are in such a way that your professors won't drop by and read the answers and find out that someone else did your homework for you. Also, for questions for homework, please read the Important Guidelines, especially #5.

http://www.marketingprofs.com/ea/guidelines.asp

We are happy to exchange ideas with you, but please YOU provide your analysis and thoughts first!

Wayde
 
Posted by: marco_tsc Author Response
6/18/2006 11:25 AM (CST)
this question is different from the previous post, please take a closer look at the question.
 
Posted by: wnelson Member Response
6/18/2006 11:33 AM (CST)
Given the previous answer, what do you think? Give us your views.

Wayde
 
Posted by: marco_tsc Author Response
6/18/2006 11:41 AM (CST)
could it be the reason that the product is well fit with the company strategic direction but not earning profits?
or because of cost mismanagement like in the case of Malaysia national car maker Proton and national airline MAS?
 
Posted by: marco_tsc Author Response
6/18/2006 11:44 AM (CST)
do you have any real life example that a product is successful but not profitable??
 
Posted by: wnelson Accepted Answer
6/18/2006 12:06 PM (CST)
It depends on your definition of successful. If we define successful as a product with an ROI better than alternate uses for that investment, then a product mathematically cannot be successful and be unprofitable.

However, a product can be successful while the company is unsuccessful. In the example of the Proton or the MAS, the company's cost is too high. It is common to allocate all costs back to the product (full allocation) and therefore, the product cost is too high to be profitable. If the costs were allocated differently - say, to other product lines where one could argue they match company use of the allocated resources better, perhaps the product could achieve both profitability and success. But here, this is changing the conditions and the definition of success.

I'm sure one can come up with some fairly fair-fetched examples of successful products that are unprofitable by defining success a hundred different ways. But, from my experience, success is an ROI better than an alternative investment. This rules out most possibilities.

Wayde
 
Posted by: mgoodman Accepted Answer
6/18/2006 6:14 PM (CST)
A lousy businessperson might consider an unprofitable product to be successful if it loses less money than one it replaces.

More likely, a product that helps keep the manufacturer/marketer in other profitable businesses might be successful and unprofitable. For example, the unprofitable product might support other products that are profitable and that might suffer if the unprofitable product were no longer available. (Example: Razors might be unprofitable, but they would be successful if they keep the highly-profitable replacement blade business going.)
 
Posted by: MANSING Accepted Answer
6/19/2006 4:39 AM (CST)
Hi Marco,

Your question is related to Ansoffs Matrix. When we have new product with less competition, then we can gain more market share. In the process of product development it fails to acquire major market share of early majority and late majority. That’s makes it unsuccessful in the market.

For example: Indian car Manufacturer company TATA, Came with a new family car – Indica, they made good profit but fail to gain more market share because of the IC engine problem in Indica.

I hope this will help!

Regards,

M Bhor


Important reading:

1. http://www.marketingprofs.com/4/cauvin1.asp
2. http://www.marketingprofs.com/4/stroll31.asp
 
Posted by: Chad Kerlegan* Member Response
6/19/2006 12:11 PM (CST)
Hi Marco,

Please be more specific about the real challenge you are facing. This will help us in the forum, help you in your business. By being vague, you can only get vague theoretical answers with no real application for you...
 
Posted by: marco_tsc Author Response
6/20/2006 12:07 AM (CST)
What i would like to know more about is the challenges faced by companies in the pursuit of innovation. Thank you so much!!
 
Posted by: satvin84 Accepted Answer
6/23/2006 2:24 AM (CST)
well i have chosen branding as my area of interest.However,i seriouslly dont know what product or company to do.I cant think of a title to do with branding.I really need help as this is my dissertation.I was thinking of doing the effectiveness of Nestle branding in Malaysia but then i thought the area of problem i mean the use of im doing the research is not there as Nestle is well establish company. The branding is of course effective. I seriouslly dont know what to do now.Please help me with my topic.Thank you.
 
Posted by: wnelson Member Response
6/23/2006 9:50 AM (CST)
Marco,

The place to get information on problems facing innovation companies IS NOT on this forum! You are going to get the abridged version with little or no referencing capability. This is not adequate for academic purposes.

Instead, go to your school library and spend a day. Get to know the research libarian. Tell him/her you want to find papers on problems faced by innovative companies. There are a million papers out there.

Wayde
 
Posted by: Emi_C Accepted Answer
6/26/2006 6:13 AM (CST)
Successful but not profitable? Hm...If I had a product that sold well and was successful, i would raise the price, hence more money comes in, more profit. Then you have a product that is both successful and profitable. I dont see how it could be any different. Profitable but not successful? This puzzles me. The only way this can be achieved, I guess, is when your operational costs are extremely low but you still get to price your product at the premium and you make many times more money then you invested. Dont need to sell a lot but only few and you've made the profit. This is what my logic has concluded :) What kind of product are we talking about!
 
Posted by: carrie77 Moderator Response
7/4/2006 6:08 AM (CST)
Hello Everyone,

I am closing this question since it's more than 2 weeks old. We do this to reward the contributions of participants in a timely manner + to give increased visibility to the newer questions.

Thanks for participating!
Carrie (Production Editor)
 


Get more answers ... ReTweet this!

Would you like to post a response?
Welcome to Know-How Exchange!
This is a collaborative community. We welcome everyone's participation.
All you need to do is login. Enter your account info in the box above (top right).
Not a member? Not a problem. Register here (it's FREE and EASY).




Know-How Exchange powered by MarketingProfs


Sponsored Links

Buy a Link Now

Just Released ... Download Today!
Just Released ... Download Today!
Look inside
Included with Premium Membership
User Name:
Password:
Remember Me
Forgot your password?

Top 25 KHE Experts
(Student Questions)
W.M.M.A. (28840)
Carl Crawford (22363)
wnelson (20398)
Puru Gupta (19298)
Peter (henna gaijin) (18747)
mgoodman (15744)
Jay Hamilton-Roth (13995)
thinkmor (10987)
ASVP/ChrisB (10031)
Gary Bloomer (9758)
mbarber (9061)
Pepper Blue (8859)
SRyan ;] (8165)
Sanjeev Kumar Vyas (7310)
stevea (6301)
jose04 (5994)
NoStressXpress (5284)
bennydunreallycare (5043)
michael (5010)
bobhogg (4824)
MANSING (4819)
Michele (4712)
SteveByrneBranding (4652)
sham (4488)
telemoxie (4315)
Recently Posted Marketing Jobs
Director of Marketing and Communications
Demand Generation Manager
Marketing/Advertising Faculty
Director of Marketing
Market Analyst
Sr. Field Marketing Manager - Business Intell.
Associate Vice President of Marketing and Corporat
Marketing Manager
[more jobs]

Join over 355,000 members ... SIGN UP!

My email address is and I'd like my password to be .

Already a member? Sign In!

My email address is , and my password is .


HACKER SAFE certified sites prevent over 99.9% of hacker crime.