Thousands of new products and services are launched yearly. But an estimated 80%-90% fail within 24 months. Why? A look at some of the major causes--and insufficient ad spend is not one of them.

3. Why Products Fail
It’s not just about the Benjamins.
MKT 3320
Supplement to Chapter 6

4. Big Brands, Big Bombs

5. Big Brands, Big Bombs

6. Big Brands, Big Bombs

7. Not just sodas lose their fizz

8. Not just sodas lose their fizz

9. Not just sodas lose their fizz

10. Not just sodas lose their fizz

11. Not just sodas lose their fizz

12. 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.)

13. Gablinger’s Diet Beer (1967)

14. 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.

15. Eight Reasons Products Fail
• 3. The Curse of the Strong Brand
With 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
•

16. 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.
•
Crystal Pepsi is another good example. Making a clear cola did not entice non-cola drinkers - it just
confused Pepsi's branding.

17. 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

18. Eight Reasons Products Fail
• 5. Cross Contamination - Mixing Two
Successful Products Into One Big Failure
It 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.

19. 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.

20. 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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21. 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.
•

22. 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.