Thursday, 28 April 2016

Popular Product failures

Over the past three decades considerable progress has been made in developing new product research techniques. Similar advances have been made in the understanding of consumer behavior. These developments would be expected to lower the failure rate for new products, yet the product failure rate has remained high and constant. Of the many factors that influence product success or failure, the most common one is competence, i.e., management's failure to understand consumer needs and wants. Product and brand failures occur on an ongoing basis to varying degrees within most product-based organizations.

A product is a failure when its presence in the market leads to:           
Ø  The withdrawal of the product from the market for any reason;
Ø  The inability of a product to realize the required market share to sustain its presence in the market;
Ø  The inability of a product to achieve the anticipated life cycle as defined by the organization due to any reason; or,
Ø  The ultimate failure of a product to achieve profitability.

Many new products with satisfactory potential have failed to make the grade. Many of the reasons for new product failure relate to execution and control problems. The following is a brief list of some important causes of new product failures after they have been carefully screened, developed and marketed.

  1. No competitive point of difference, unexpected reactions from competitors, or both.
  2. Poor positioning.
  3. Poor quality of product.
  4. Non-delivery of promised benefits of product.
  5. Too little marketing support.
  6. Poor perceived prices/quality (value) relationship.
  7. Faulty estimates of market potential and other marketing research mistakes.
  8. Faulty estimates of production and marketing costs.
  9. Improper channels of distribution selected.
  10. Rapid change in the market (economy) after the product was introduced.
Some of these problems are beyond the control of management; but it is clear that successful new product planning requires large amounts of reliable information in diverse areas. Each department assigned functional responsibility for product development automatically becomes an input to the information system needed by the new product decision maker. For example, when a firm is developing a new product, it is wise for both engineers and marketers to consider both the kind of market to be entered (e.g., consumer, organizational, international) and specific target segments. These decisions will be of paramount influence on the design and cost of the finished good, which will, of course, directly influence, price, sales, and profits.

Studying product failures allows those in the planning and implementation process to learn from the mistakes of other product and brand failures. Each product failure can be investigated from the perspective of what, if anything might have been done differently to produce and market a successful product rather than one that failed. The ability to identify key signs in the product development process can be critical. If the product should make it this far, assessing risk before the product is marketed can save an organization’s budget, and avoid the intangible costs of exposing their failure to the market.

In this era of tight competition from domestic and global firms the firm who don't come out with new products are putting themselves at great risk because their existing products are prone to changing customer needs, shorter product life cycles, new technologies and increased competition. Despite years of research and huge capital being pumped in to understanding the consumer, making a launch successful is still a difficult task.
In this article, I’ve listed some very big product failures, products so poorly-conceived, so hopeful in their launch and so disastrous in their fall.

1.New Coke

One of the most famous examples was New Coke, a launch by Coca-Cola in 1985. Obviously oblivious to the phrase “never mess with a winning formula”, they decided to change the recipe of Coke that had served them so well, and relaunch it with a fanfare of trumpets. The Chief Executive at the time, Roberto Gozueta, described the new taste as “smoother, uh, uh, rounder yet, uh, yet bolder…a more harmonious flavor” and, initially, consumers agreed and kept buying Coke as normal. Then there came the backlash – mainly from loyalists in the South, who saw it as some kind of continuation of the Civil War. Eventually, the vocal minority won out and the old formula was restored, although many said it was never quite the same again.

2. Multi-Colored Ketchup

Here’s more food meddling in this next entry, as, in 2000, Heinz ignored the lesson of Coke and messed with a winning formula, in this case tomato-colored ketchup, which had been selling quietly and consistently for the company for over 100 years.

Wanting to appeal to the kids, Heinz launched a new range of ketchups  in  wacky colors, like electric blue, and “funky purple”. The whole thing was slightly mystifying, given that any self-respecting 4-year-old slathers their food in ketchup anyway, and it certainly didn’t appeal to parents. Strangely enough, parents prefer their children’s food to resemble the base ingredient, where possible, rather than resembling something that fell out of an alien’s nose. Needless to say, it didn’t last long.


In February’14, Fitbit recalled its Force wristband after many users complained that it caused skin irritation such as rashes & blisters. The wearable activity tracker had only been on the market a few months and was doing well before the voluntary recall. Although Fitbit offered Force owners a full refund and free return shipping, a class action lawsuit was filed in California. The suit called for Fitbit to contact and issue a refund to every Force owner in the state, as well as fully disclose the cause of the skin irritation. Fitbit quickly redeemed itself, launching several new and improved products, like the Charge HR and the Surge, which were designed and tested to make sure the chances of skin irritation were significantly reduced.

Ms. Smriti Dua
Assistant Professor
Department of Management Studies

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