Why Products Fail

It’s not just about the Benjamins.

MKT 3320

Supplement to Chapter 6

Big Brands, Big Bombs

Big Brands, Big Bombs

Big Brands, Big Bombs

Not just sodas lose their fizz

Not just sodas lose their fizz

Not just sodas lose their fizz

Not just sodas lose their fizz

Not just sodas lose their fizz

Eight Reasons Products Fail

• 1. Timing Example: Apple Newton• “Too much. Too Soon.”

• Sometimes a product is just "ahead of its time," and the market for it just doesn't exist, like the precursor to popular PDA devices, the Apple Newton MessagePad. This kinda-clunky PDA had a few shortcomings - most famously, its inability to live up to the claim of understanding handwriting - but more than that was its release at a time when paying $700 for a PDA in 1998 seemed absurd. Palm Pilot took the category, at least for a while.

• Runner-Up: Galblinger’s Diet Beer (1967). (Miller bought the parent brewery in part to get the formula that became the very successful Miller Lite in 1974.)

Gablinger’s Diet Beer (1967)

Eight Reasons Products Fail

• 2. Not Living Up To The Hype

McDonald's also fell prey to this with the release of the Arch Deluxe menu in the '90s. No one was fooled when Mickey-D's claimed to have moved into the fine dining racket just by slapping a tomato on top of a burger. McDonald's reportedly spent $100 million on advertising the failed line.

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• For another example, don't forget the Windows Vista saga.

Eight Reasons Products Fail

• 3. The Curse of the Strong BrandWith the McDonald's Arch Deluxe fiasco, McDonald's name was too strong as a value burger joint for anyone to take the "dining for adults" line seriously.(Clorox Inc.. owns a number of brands, including Brita Water Filters, Rice-A-Roni, Hidden Valley Dressings and Kitty Litter--but you won't see the corporate name on any of these products).

• Runner-Ups: Ben-Gay Aspirin• Cosmopolitan Yogurt•

Eight Reasons Products Fail

• 4.Fixing What Ain't Broken (Or, “Greed is Bad for Your Brand”)

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•Companies that are already successful sometimes try to improve themselves but end up scaring off their already loyal consumers. This is best illustrated in what is known as one of the worst product failures in history: "New Coke." In 1985, Coca-Cola was doing fairly well, but was worried about losing more market share to Pepsi. There was a $4 million market research project stating that Coke drinkers would prefer the new taste, but when it came down to it, they still wanted the original.

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Crystal Pepsi is another good example. Making a clear cola did not entice non-cola drinkers - it just confused Pepsi's branding.

Dishonorable Mention: Cimarron by Cadillac (1982-1988)

• "Everything that was wrong, venal, lazy, and mendacious about GM (General Motors) in the 1980s was crystallized in this flagrant insult to the good name and fine customers of Cadillac.“

• Dan Neil, Pulitzer Prize-winning automotive journalist

Eight Reasons Products Fail

• 5. Cross Contamination - Mixing Two Successful Products Into One Big FailureIt seems counterintuitive that combining two successful products or companies can somehow bring about disaster, but it happens. Just think of the combo of peanut butter and jam in one bottle or Kellogg's disastrous milk-with-cereal packaging campaign Cereal Mates.

• Americans just don’t believe milk won’t stay fresh outside a refrigerator.

Eight Reasons Products Fail

• 6. Not Having The Right Business Partners

HD DVD was like the VHS of the DVD battle, because it cost less than Blu-Ray and held less information,

except that HD DVD lost. Certain studios (Fox, Sony, Walt Disney), Sony's Playstation 3 and retailers like Wal-Mart and Best Buy all sided with Blu-Ray, leaving Toshiba's HD DVD at a disadvantage because it had fewer available titles and sales outlets. Like Betamax, this caused a chain reaction where fewer films were released for the less-available format, and Toshiba stopped producing HD DVD players in Toshiba’s loss= over $1 billion dollars.

• The Sony Librié/Reader Predated the Amazon Kindle by over a year. But Sony doesn’t have the access to the content providers that Amazon does. Amazon already has relationships with the world’s major publishers and the Kindle provided another way to sell their content. This win-win was a loser for Sony.

Eight Reasons Products Fail

• 7. Political Orphans The average tenure of a Chief Marketing Officer in a US company is about 18 months, according to the Wall Street Journal online. But in that short time, he/she has priorities. Such as torpedoing any project greenlit by a predecessor. Short of actually stopping production, marketing funds can be cut off and product launches cancelled. The Buick Reatta was a perfect example of this.

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Eight Reasons Products Fail

• 7. Political Orphans Reatta was sold (sort of) from 1988-1991 . It had been initiated by the Ed Mertz regime, when Buick actually had some fairly cool cars—the T-Types and the Grand National GNX—the fastest production car in the US (in 1988). When the new team decided to target the AARP crowd, Reatta was doomed before it launched. We weren’t allowed to mention that it was a two-seater (one of three in the GM line-up and the first in Buick’s in over 50 years). Guess they figured people couldn’t count. The Reatta was RIP and DOA.

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Eight Reasons Products Fail

• 8.Too Much, Too Much: • The Ford Excursion: the longest, heaviest SUV ever produced

• Sometimes there’s a gap in the brand line-up that marketers just think has to be filled. But that gap doesn’t necessarily exist in the minds of consumers.

• To fill that mythical gap, if a lot is good, then MORE is better. Example: the Ford Excursion—the Chevrolet/GMC Suburban fighter. Suburban drivers are among the most loyal in the industry. Offering an even bigger package didn’t convert Suburban owners. Ford loyalists stayed with the Expedition

• Excursion was produced 2000-2005. The fact that it offered a V-10 engine is one key to its failure: high gas prices.