It often becomes necessary to eliminate certain products from a range because they:
- Involve expensive, short-run production lines as demand diminishes
- Take up an excessive amount of management and salesman time
- Project the image of a conservative and technologically backward company
- Delay the search for new products. (Management may be hoping that the poor product performance is temporary or is the result of inadequate marketing.)
However, before a product is abandoned, factors other than those highlighting current product profitability should be taken into account. These include:
- The likely effect on sales and profits in the event of product rejuvenation
- The likely advantages of a change in the product marketing strategy
- Alternative product opportunities open to the company
- The extent to which the product assists in the sale of other products in the range
Before moving to eliminate an export product, you need take into account the market potential for the product in all of your markets. Although the product may be only marginally profitable in the domestic market or in one specific export market, it may be in the growth stage of its life-cycle in other markets where it is influenced by different per capita incomes or different purchasing patterns.