5 Reasons Companies Fail in Launching New Products
Every year there are hundreds of business that launch new products which fail. There are any number of reasons why this occur. I would like to take the time to discuss five of those reasons.
The figure below reflects on the thousands of ideas marketed in the race for profit unfortunaely, only one arrives at the finish line.
1. Marketers assess the marketing climate inadequately
In 1985 the Coca Cola Company decided to replace it’s Classic formula with a new formula called New Coke to maintain a competitive edge with it’s market competitor Pepsi. Coca Cola’s neglect to perform market analysis resulted in a poor acceptance of it’s new formula by its. most loyal customers
2. What were they thinking? Organization problems: Encountering groupthink
Take for instance Thanksgiving Soda, a complete Thanksgiving meal in a five pack. Is it plausible that a member of the new products development team suspected the Thanksgiving soda was a bad idea but was afraid to speak up for fear of being ostracized or not viewed as a team player. Just because 50 million people believe in a dumb idea, it’s still a dumb idea!
3. Poor execution of the marketing mix brand name, packaging, price, promotion distribution
Somewhere in the marketing mix a showstopper can kill the product. Fire phone was launched 7 years after the iPhone and 6 years after the first android phone in a already established market. The device offered less applications than both the android and iPhone but with a similar price tag. As a result, one month after the release of Amazon fire the price was cut from $199 to 99 cents. Fortune blames some of its failure on its high price, and says “selling the Fire for $200, the industry standard, ran contrary to Amazon’s long-held, company-wide strategy of undercutting the competition.”
4. Incomplete market and product protocol before product development starts.
Without this protocol, firms try to design a vague product for phantom market by Kimberly-Clark, Avert Virucidal tissues contained vitamin C derivatives scientifically designed to kill cold and flu germs when user sneezed, coughed, or blew their noses into them. The product failed in test marketing. People didn’t believe the claims and were frightened by the “cidal” in the brand name, which they connected to words like suicidal. A big part of Avert’s failures was lack of a product protocol that clearly defined how it would satisfy consumer wants and needs
5. Bad timing
is the result when a product is introduced too soon, too late, or then consumer tastes are shifting dramatically. Bad timing gives new-product managers nightmares. Microsoft, for example, introduced its Zune player a few years after Apple launched its iPod and other competitors offered their new MP3 players.
The single biggest reason why startups succeed | Bill Gross
Published on Jun 1, 2015
Bill Gross has founded a lot of startups, and incubated many others — and he became curious about why some succeeded and others failed. So he gathered data from hundreds of companies, his own and other people’s, and ranked each company on five key factors. He found one factor that stands out from the