When the product does not meet the requirements and expectations of consumers, businesses should resolve the issues immediately to avoid losing sales. Failure to do so will spoil the image of the company and lead to substantial marketing costs for subsequent products. The first step is to identify the nature, the cause, and the magnitude of the problem. The company should know whether the issue is caused by a component from a third-party supplier or if there is an internal problem. Then, the management should decide how this issue will be resolved – by providing an upgrade to an existing product or offering a completely new product with eliminated deficiencies.
The former method is applicable mostly to companies that provide software as a service. For instance, an Android phone might have a bug that causes the device to shut down occasionally. The sales drop because many consumers start complaining about the problem on social media networks. The company may respond to it by the following steps. First, it identifies whether the issue is caused by a software bug or a hardware problem. If it is a software bug, the company researches the subject and publishes an update that everyone can download. Phones that are sold in stores get the update prior to the customer’s purchase. If the problem is rooted in hardware, the company may provide free repair and compensate for the inconvenience by offering a bonus gift card.
Thoughts about designing a completely new product arise when there are too many issues with the current model, or it will get outdated within a year. The competitor’s offering with improved characteristics may be another reason why the company starts thinking about redesigning its commodity. The company will start losing sales if it does not provide an improved model within a short period of time. For instance, phone manufacturers develop a new model every year to address the issues with the previous version and compete with rivals.