Which of the following is a reason why new products may fail?

Overestimation of market size is a significant factor leading to the failure of new products. When companies inaccurately predict how large a market is, they may invest considerable resources into developing and marketing a product without a solid foundation of demand. This overestimation can stem from inadequate market research, assumptions based on optimistic projections, or a misunderstanding of customer needs and preferences. If the actual market size is significantly smaller than predicted, the product may not generate sufficient sales to justify the investment, ultimately resulting in failure.

Understanding market size is critical for businesses. Companies need to base their strategies on realistic assessments to allocate their resources effectively, ensure that they can compete, and align their offerings with actual customer demand. Without this foundational knowledge, new products are at a higher risk of being unsuccessful in the marketplace.