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2Why Products Fail
Acknowledgment
• This lecture is primarily derived from the following
Cohort 5 MPD Thesis and Thesis Presentation:
A Concept Selection Tool to Extend Pugh Matrices, by
Moe Fawaz, Michael J. Vinarcik, Susan Wellman-Smith
5Why Products Fail
Product Planning Gone Wrong
• What is it?
• It’s an X-Ray machine used to fit shoes
• It was popular in the late 1940’s and the 1950’s
• Then people realized that the radiation danger outweighed the perfect shoe fit – especially when many machines were poorly maintained, leaked radiation, and were improperly adjusted
http://www.neatorama.com/2008/03/06/shoe-fitting-x-ray-machine/
6Why Products Fail
Definitions
• Product Failure: (1) occurring whenever management regrets the new product introduction, (2) a product failing to live up to its company expectations in the market
• Product Successes: products which met or exceeded their objectives
7Why Products Fail
Some Basics
• Likelihood of product success increases if the company understands user requirements and provides “market-pull” type products
• The most common reason for product failure is inadequate market analysis
– Surveys have shown that about 2/3 of products considered to be a technical success are product failures
• Product success requires:
– correct identification of an existing demand
– efficient development
– presence of key individuals
– a clear advantage over competing products
8Why Products Fail
Some Stats on New Products
• 1 of 7 new product concepts succeed commercially– the others are either cancelled or fail after
introduction• 80% of the products which fail do so very shortly after
their introduction; a further 10% die within 5 years• 46% of resources are devoted to new products are spent
on products that fail• Product failure spans all domains of products (and
services)
9Why Products Fail
Facts About Consumers
• Consumers are becoming increasingly educated about products and increasingly discriminatory
• Better products don’t necessarily cost more• Consumers select products closely tailored to their needs
using factors such as :– Price– Quality– Reliability– Ease Of Operation– Safety…
10Why Products Fail
Facts About Companies
• Established global giants are just as likely to introduce flops as smaller, younger companies
• Companies do not learn from each others’ mistakes (in fact they often follow them)
• New products are more likely to succeed if the company truly understands user requirements and selects an appropriate concept which satisfies those requirements
11Why Products Fail
Six Main Principles Of Product Failures
1. Idea Failure
2. Extension Failure
3. Public Relation Failure
4. People Failure
5. Re-Branding Failure
6. Culture Failure
12Why Products Fail
Idea FailuresDescription Reasons for
FailureLessons Learned
Main Rival
Persil Power New detergent formula that is supposed to fight any stain
Formula was so powerful that at high temperature it didn't only destroy the stain but the clothes as well
Products need to be tested in every environment they are likely to be used
Ariel, effective without destroying the clothes
The Hot Wheels Computer
A computer that targeted the boys’ market, had hardware decorated with hot wheels flame logo
Attempt to gender marketing
Get designers involved at the start. Designers should give engineers input on product usability and interface issues
Radion A washing powder
It wasn't different enough from other popular products
Differentiate yourself from the competition
More expensive and lower quality than its main rival
13Why Products Fail
The Extension Failure
• Extension cannibalizes sales
• Divides existing pie into smaller slices
• Addresses the needs and wants of the marketer rather than those of the consumer
14Why Products FailExtension Failures
Description Reasons for Failure Lessons Learned
Main Rival
Crest First fluoride toothpaste brand.
Crest kept on offering new variations on the same theme, thereby confusing the toothpaste-buying public.
Don't confuse the customer by offering too many product duplicates.
Colgate came with fluoride, tartar control, gum protection…all in one.
Heinz All Natural Cleaning Vinegar
A double-strength cleaning aid
The fact that both vinegar and Heinz are normally associated with things you can eat only made the product more confusing for the customer.
Products can be expanded provided they remain true to their core identity.
Xerox Data Systems
A computer technology and data processing
Xerox was trying to transform itself into an IBM-style "information business,” but the public was unwilling to think of Xerox in any terms other than the copier company.
It is vital to know the association of the brand name in the consumer's mind before introducing a new concept.
IBM
15Why Products Fail
Public Relation Failure
• When a company doesn’t provide the truth about a negative incident of a particular product
– This might lead to an automatic new concept flop
– Ex. Firestone handling of the tires issue
16Why Products Fail
The People Failure
• Product ultimately depends on individuals who represent it in order to survive
– Ex. Enron, top executive acted irresponsibly
17Why Products Fail
The Re-Branding Failure
• Can undermine the company’s previous marketing efforts
– Tommy Hilfiger
18Why Products Fail
The Culture Failure
• The internet facilitates expansion to new markets• It is important to remember cultural differences which can
affect the product’s chances to succeed in new markets– Hallmark cards in France (they prefer to write their own words
inside)– Kellogg's cereals in India (traditionally had hot vegetables for
breakfast, cereal expensive)– Pepsi in Taiwan (“Come Alive With the Pepsi Generation” was
translated “Pepsi Will Bring Your Ancestors Back From the Dead”)
– Parker pens in Mexico (“It Won’t Leak In Your Pocket” was mistranslated to a slogan involving unwanted pregnancies)
– Vicks products in Germany (the brand name had negative connotations in German)
19Why Products Fail
Some Classic FailuresProduct Description Failure criteria
Kodak mc3 MP3 player, a digital camera, and a digital video camera, all in one.
All in one for $ 300 came at the cost of quality
Betamax Was regarded as far superior in sound and picture quality to VHS formats
Consumers turned their nose up on the price – which was driven higher than VHS largely due to Sony’s proprietary stance
Manual Typewriter A victim of technological evolution
Hydraulic elevators Had an alarming failure and fatality rate in skyscrapers and were quickly replaced by electric versions
20Why Products Fail
Failures Due To Technology
• Standard Photographic Cameras Vs. Digital Cameras
• Polaroid Vs. Digital Cameras
Heuristic: Concepts Based Around A Particular Technology Have A
Short Half-Life
21Why Products Fail
Bad Design Concepts
Top-loading VCR
Can’t Put Anything On TopOf It.
Heuristic: Consider The Environment That The New Product Will Be Used In.
22Why Products Fail
Bad Design Concepts
The On/Off Switch Can Be Easily Activated By Accidentally Pushing An Object Against It
On/Off Switch Is Placed At An Angle
24Why Products Fail
Bad Design Concepts
“Difficult To Tell Which Control Goes With Which Burner”
“Controls Are Arranged In The Configuration As The Burners”
25Why Products Fail
Heuristics From Concepts That Flopped
• Chord Of Familiarity– Radical concepts should be kept on the market for
enough time or be heavily advertised• Communicate Clearly
– Never assume that the consumers know• Why they should use the product• How they should operate it• What its purpose may be
26Why Products Fail
Heuristics-continued
• Convenience – Consumers will select the product that makes their
lives easier• Extraneous Extras
– Consumers won’t pay for what they don’t want or can’t use
• Failure Is Opportunity– Failure always presents new opportunities
27Why Products Fail
Heuristics-continued
• Ignore Office Politics
– Don’t be afraid of pointing out the flaws of a bad concept
• Picket Fences
– Share thoughts with the people your concept is targeting
28Why Products Fail
Hot Buttons For Success In The Millennium
• Convenience• Environment• Ethnicity• Fun• Nutrition• Packaging• Size • Youth
29Why Products Fail
Summary of Considerations
• Creative developers must be given time to make mistakes• Innovation= 99% perspiration and 1% inspiration• No better way to success than by learning from mistakes• There is as much to learn from failures as there is from
successes