Reasons for failure
Feasibility study is an essential element in project management. Project managers need to carry out comprehensive feasibility study before spending money on projects. Fiat 500 emerged as one of the biggest product flops in 2011 despite its efficiency in fuel consumption.
It lied on the sixth among the most flopped products in the US market. A key reason that led to failure of Fiat 500 project was failure to carry out adequate market feasibility. An Italian company (Chrysler Group LLC) produces the Fiat 500 car. The company’s main target market for the product was America. The company did not carry out adequate market study to establish taste and preferences of the people of America.
Another factor that led to flop of the product was delay in decision making on which stores to us for sale of the product. The decision makers were indifferent on whether to us Chrysler dealership or open new dealership in the US. During this period of indecision the company had an opportunity to take advantage of low supply of small cars from other companies. This is because Tsunami in parts of Japan interrupted supply of such vehicles.
Therefore, there was a problem in distribution channel which resulted to unavailability of the car. The third factor that contributed to flop of the product was inadequate publicity. There was no adequate fund for marketing the product. This resulted to low customer awareness and hence reduced sales. High price of Fiat 500 also played a role in failure of the project. Some dealers complained about the pricing of the car (Bhasin, 2011, p.1).
Strategies for improvement in future projects
Successful implementation of projects is a challenging task. Project managers have a lot to take into consideration before they succeed in these ventures. The ultimate goal of each and every project manager is to ensure that benefits outweigh costs and project financers get a return out of their investments. However, it is not only cost optimization that defines success of a project. Other factors such as product position strategies are of essence in defining success of a project.
For instance, before launching a product, project manager should ensure that the product meets the needs of the target market. Also, the product should be better than alternate product in the market. Second factor to consider is the penetration strategy. Areas to consider when coming up with penetration strategy of the product are distribution channels and pricing. A company launching a new product should ensure that there are adequate distribution channels.
This will ensure that the product is readily available. A company should also come up with a favorable price that will allure the target market segment. This price should be competitive and the product should provide value for money that is, it should be of high quality. Finally, there should be adequate publicity before launching the product. A company launching a new product needs to create massive awareness of the product before the launch.
The company should carry out prelaunch survey and check whether the product meets customer needs. This can be done using prototype models. Results of such surveys give room for adjusting final product before launch. The company needs to allocate adequate resources for marketing the product. This will ensure that there is adequate awareness of the product in the market. It will also help build customer confidence (Kerzner, 2010, p.34). In summary, price, product, place, and promotion are essential to ensure successful product launch.
References
Kerzner, H. (2010). Project management best practices: Achieving global excellence. Hoboken, New Jersey: John Wiley and Sons.
Bhasin, K. (2011). The Launch Of The Fiat 500 Was Supposed To Be A Huge Deal In The US, But It’s Not. Web.