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Why do Companies Discontinue Products? - [Factors Revealed]

Updated: Jan 29


Why do Companies Discontinue Products - [why companies discontinue products]
Photo by Pavel Danilyuk [Pexels]

Why do Companies Discontinue Products?:

Companies discontinue products for a variety of reasons. While it may seem frustrating to a consumer when a beloved product suddenly disappears from the shelves, there are often valid reasons behind this decision.


Let's dive into some of the most common factors that lead companies to discontinue products. Also, don't forget to see the FAQs at the end.

Interesting fact - “30% of goods are returned because the products did not match what the person saw on the website” RETAIL DIVE

Know Why do Companies Discontinue Products?:

1. Declining Sales:

Companies need to make money, and if a product isn't selling well, it can become financially unsustainable to keep it in production.


Sales figures are carefully monitored, and if a product consistently underperforms, the company may choose to discontinue it to allocate resources to more profitable ventures.


2. Changing Market Demands:

The marketplace is constantly evolving, and consumer preferences can shift dramatically over time.


If a product no longer aligns with current trends or fails to meet changing customer needs, companies may choose to discontinue it.


To stay competitive, businesses must adapt to these changes and allocate resources toward developing new products that better meet the demands of the market.

“If you can create buzz around your product that makes it different from the competitors, you are more likely to sell more products and services” Level343

3. Technological Advancements:

Technology plays a significant role in product development.


As new technologies emerge, companies may need to phase out older products that can no longer keep up with the latest innovations.


By discontinuing outdated products, companies can invest in research and development to create more advanced offerings that stay ahead of the competition.


4. Cost Considerations:

Sometimes, the cost of producing a product becomes too high for a company to sustain.


Rising manufacturing costs, raw material price fluctuations, or changes in regulatory requirements can all impact a product's profitability.


In such cases, companies may choose to discontinue the product rather than pass on the increased costs to consumers or risk operating at a loss.


5. Strategic Decisions:

Companies regularly evaluate their product portfolios and make strategic decisions about which products to prioritize.


This can involve discontinuing certain products to focus resources on core offerings or new product development initiatives.


By streamlining their product lines, companies can allocate more resources toward innovation and marketing efforts for their most promising products.

Do you know? - “For a product ecosystem to be beneficial to buyers, you need to ensure your products or services are effectively solve the challenges and pain points of your target audience. To do this, listen to your customers” HubSpot

6. Rebranding or Repositioning:

In some cases, companies discontinue products as part of a larger rebranding or repositioning strategy.


This can involve phasing out older products that no longer align with the company's new brand image or target market.


By discontinuing these products, companies can create space for new offerings that better align with their updated brand identity and marketing strategies.


There will also be instances when products get discontinued due to legal aspects.


Product and Technology Leadership Positioning

Product and Technology Leadership Positioning
Image Source - MarketingProfs

In summary, it's important to note that companies don't take the decision to discontinue a product lightly.


They carefully consider various factors, such as sales performance, market dynamics, cost implications, and strategic objectives, before making such decisions.


While it may be disappointing for consumers when their favorite products are discontinued, it's often a necessary step for companies to stay competitive and meet evolving customer demands.


Here's related information that you may find helpful - Why do brands matter to manufacturers?


FAQs:

Why are Products Discontinued?:

Products are discontinued for various reasons, including declining sales, changes in consumer preferences, high production costs, legal issues, poor market response, or the introduction of newer and more advanced alternatives.


What Does it Mean When a Product is Discontinued?:

When a product is discontinued, it means that the manufacturer has stopped producing or selling it, often due to various reasons such as low demand, high production costs, legal concerns, poor market response, changed consumer preferences, or the introduction of newer alternatives.

“Standing out amid the sea of products and services necessitates identifying and addressing a genuine market need. If an innovation meets an unaddressed market need, then it can put itself in a position to be successful” Entrepreneur

What Happens to Discontinued Products?:

Discontinued products are typically phased out of production and sales, and existing inventory may be sold at clearance prices or recycled.


Why are Popular Products Discontinued?:

Popular products are discontinued for a variety of reasons, including declining demand, production or supply chain issues, or the need to make room for newer, more innovative offerings.


Businesses Need To Look For While Creating Products:


Where can I Buy Discontinued Products?:

You can buy discontinued products from online marketplaces, auction websites, specialty retailers, clearance sales, or through direct sales from the brand's outlet stores, if available.


Here's related information that you may also find helpful – Why do companies change their logo?


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