1Why Products Fail

Why Products Fail

Jonathan WeaverMike Vinarcik

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

3Why Products Fail

4Why Products Fail

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

23Why Products Fail

Bad Design Concepts

Most people expect to push the buttons

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

30Why Products Fail

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