Why Products Fail

1. Why Products Fail Jonathan Weaver Mike Vinarcik

2. Acknowledgment • This lecture is primarily derived from the following Cohort5 MPD Thesis and Thesis Presentation: A Concept Selection Tool to Extend Pugh Matrices, by Moe Fawaz, Michael J. Vinarcik, Susan Wellman-Smith

5. 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/

6. 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

7. 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

8. 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)

9. 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…

10. 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

11. Six Main Principles Of Product Failures • Idea Failure • Extension Failure • Public Relation Failure • People Failure • Re-Branding Failure • Culture Failure

12. Idea Failures

13. 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

14. Extension Failures

15. 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

16. The People Failure • Product ultimately depends on individuals who represent it in order to survive • Ex. Enron, top executive acted irresponsibly

17. The Re-Branding Failure • Can undermine the company’s previous marketing efforts • Tommy Hilfiger

18. 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)

19. Some Classic Failures

20. 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

21. Bad Design Concepts Top-loading VCR Can’t Put Anything On Top Of It. Heuristic: Consider The Environment That The New Product Will Be Used In.

22. Bad Design Concepts On/Off Switch Is Placed At An Angle The On/Off Switch Can Be Easily Activated By Accidentally Pushing An Object Against It

23. Bad Design Concepts Most people expect to push the buttons

24. Bad Design Concepts “Controls Are Arranged In The Configuration As The Burners” “Difficult To Tell Which Control Goes With Which Burner”

25. 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

26. 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

27. 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

28. Hot Buttons For Success In The Millennium • Convenience • Environment • Ethnicity • Fun • Nutrition • Packaging • Size • Youth

29. 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

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