Even though the commonly quoted product failure rates of 80 to 95% (the latter figure attributed to Professor Clayton Christensen, a statementhe now denies making) may benothing more than urban myths, the actual mortality rate of new products remains high. According toCrawford C. Merle, 35% products fail to deliver a significant return.
In his article, “Identifying industrial new product success,” R. G. Cooper estimates the product failure rate at 48%. And in his book “Winning at New Products” he writes:
“about half of all resources allocated to product development and commercialization in the U.S. goes to products that a firm cancels or produce an inadequate financial return.”
However,StatGate International claims that 28 to 34% of middle to bottom performers fail commercially. And 20 to 21% get killed prior to launch.
But why do so many products fail to produce any meaningful financial return? Here are 7 key reasons major brands’ products fail on the market:
Reason #1: Failure to Understand Consumer Needs and Wants
After spending years researching and trialling the product,in 1970 AT&T finally launched the Picturephone.
The company’s executives believed that a million units would be in use within 10 years of launch.
They pulled it off market 3 years later due to a lack of consumer interest.
Why did Picturephone failed?
As it turns out, users found the equipment too bulky, its controls unfriendly, and picture too small to actually enjoy viewing.
Blinded by their own vision the company ignored negative user feedback right from trials, and developed a product that failed to meet customers needs and wants.
(ide note: it seems that AT&T didn’t learn anything from this mistake. The companyre-launched Picturephone in 1992. Unfortunately, to similar results).
Reason #2: Fixing a Non-Existent Problem
In 1990 Maxwell House launchedReady to Drink Coffee.
The premise behind the product was simple:
To create a new, convenient way for customers to enjoy coffee instantly, without having to actually make themselves a cuppa at home.
Sounds genius, right?
A customer could buy the product at their local supermarket, bring it home, microwave it, and … voila, their coffee was ready.
So why did it flop?
You see, turns out that you can’t microwave coffee in its original packaging. Instead customers had to pour the product from the packaging into a mug before putting it into the microwave… An activity no different than pouring yourself a cup of fresh coffee from the coffeemaker. Which is exactly what customers kept doing, forcing the company to abandon the product.
Reason #3: Targeting the Wrong Market
I’m sure you remember how Microsoft decided to take on the iPod in 2006. The company launched Zune which promised to do everything that Apple’s device could do too.
And yet, in spite of great promises, Zune failed on the market.
Why did Zune fail?
Microsoft admits that they were just chasing Apple and created a product that offered no reasons for customers to switch.
What’s the lesson from this mistake?
It’s hard to know how the market will react to a product and marketing messaging. Hence why it’s crucial to test these things beforehand. Ask potential users for feedback and test their response to the marketing message.
And then, listen to that feedback.
Reason #4: Incorrect Pricing
The Apple Newton PDA flopped because it was priced too high. Although some observers cite poor handwriting recognition as another reason for the product’s failure, the steep $700 price tag contributed significantly.
Customers could afford the Newton. But what’s worse, is its pricing affected its market positioning too.
You see, a high price might suggest too sophisticated product to customer needs. And so, it could force potential buyers to look for alternatives they’d perceive more relevant to them.
Reason #5: Weak Team and Internal Capabilities
In 2007, Joost promised to be the peer to peer TV network of the future, and seemed off to a flying start.
Unfortunately, Joost had various problems with its architecture, player, content library… you name it.
As a result, it never took off. 2 years after its launch, whatever was left of it wassold to Adconian.
Lack of skills can limit any potential solutions your team can create. Similarly, lack of resources and internal support can hinder your efforts to produce a product that satisfies customer needs.
Reason #6: Prolonged Development or Delayed Market Entry
Taking too long to launch may also cause a product to fail. By the time it hits the market, customer needs could change, the economy could have taken a downturn, or the market segments may have evolved.
That’s the fate ofGoogle Lively, the search giant’s answer to Second Life. After prolonged development, Lively finally launched in 2008, just as the recession started to take its toil.
As a result, the company pulled the product after just 5 months to “focus on core search, ads and apps business.”
Reason #7: Poor Execution
Bad design, pooruser experience, sloppy implementation,feature creep, and lack of quality control all contribute to product failure.
And there are plenty of examples of how poor execution affected the product’s performance on the market:
Microsoft’s BOB relied on technology most users didn’t possess at the time, resulting in the product not functioning properly for most users.
A 2007 iteration of their core product, Windows Vista used so much power that most users found it unusable. Add to it a plethora of problems they encountered when using the Internet, and you have a recipe for failure.
It’s no surprise that 4 months after the launch, Microsoft allowed Dell to sell computers with an older version of Windows pre installed.
About 30 to 45% of new products fail to deliver any meaningful financial return. This typically happens due to a number of reasons, from poor product / market fit, failure to understand customer needs (or fixing a non-existing problem), to a lack of internal capabilities.
What about you?
What other factors do you think might contribute to a product’s failure? Share them with us in the comments.
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Are you on the verge of launching a new product? Or are you still in the process of developing one? Whatever the case may be, you obviously want to do everything you can to ensure your product launch is successful.
That means you need to carefully plan every aspect of your launch – from product development, to your product launch promotion. To help you with your product launch planning, here are six of the worst product launch failures, and what you can learn from them.
Product Launch Failure #1: Samsung Galaxy Note 7
One of the biggest product failures in recent years was that of the Samsung Galaxy Note 7. Reports of explosions, batteries overheating, and burns were common for the phone. It launched on August 19, 2016, and by early September, Samsung stopped selling it. The brand issued a voluntary recall of the devices, during which they recalled 2.5 million units, according to Time magazine.
Source: Ariel Gonzalez
Samsung then replaced the Notes with new devices, but the problem persisted. Various airlines around the globe started to ban the devices on flights, and Samsung ended up losing $14.3 billion in investments. Although Samsung has since stopped the production of the Note 7, the product had a lasting impact on the brand’s image.
What to Learn from the Samsung Galaxy Note 7 Failure
Improper product development was the biggest reason for the failure of the Samsung Galaxy Note 7. According to Wired UK, the problems were due to battery manufacturing issues. One mistake was committed by Samsung themselves, in regards to size. The other was incorrect welding of batteries by a third-party manufacturer.
The blueprint for their device was great. They had everything else in place, but two tiny mistakes resulted in one of the worst product launch failures of all time. Some people even called it the worst tech failure of 2016.
What’s important to learn from this example is that you need to carefully inspect every aspect of your product development before you even set a launch date. Otherwise, you might feel compelled to meet the deadline, and rush through some crucial steps. And that could negatively impact your launch.
Keep testing every element involved in your product development, and set your launch date only after you’re sure things are going smoothly.
Even after you set a deadline for the launch and publicly announce it, you shouldn’t hesitate to push it back if there are unexpected delays. It might affect your reputation a bit, but not as much as it would if you launched a product that’s not ready.
Product Launch Failure #2: Fitbit Charge HR & Surge
After the Pulse, Fitbit continued to experience issues with their fitness monitors. The Fitbit Pulse was recalled because it caused allergic reactions for some users. After that, the Fitbit Charge HR and Fitbit Surge fitness monitors were met with a class-action lawsuit in 2016 from users claiming the devices provided false reports.
The Daily News reported that some users claimed the devices measured their heart rates much lower than they actually were. For instance, one user claimed that the Fitbit recorded her heart rate as 114, when another hand-grip heart monitor reported it as 155. The same user also claimed that the Fitbit reported that she had burned 250 calories, when another neck monitor reported she burned 650 calories.
Source: Karlis Dambrans on Flickr
These claims suggested that users may be working out much harder than they should be. And the reports went against Fitbit’s ad campaigns, which used slogans like, “Every Beat Counts,” and, “Know Your Heart.” According to the lawsuit, the devices are, “effectively worthless,” for monitoring heart rate. Time also reported a study, which proved the inaccuracy of the devices’ heart rate monitoring.
What to Learn from the Fitbit Failure
Fitbit’s products may have been ready, and they may have been marketed effectively to succeed. In some aspects, they did succeed, but they failed to maintain that success in the long run. The technology used for monitoring was faulty, and gave inaccurate results. The previously-cited study showed that the inaccuracy was approximately 20 bpm (beats per minute) compared to an ECG machine.
This suggests that they were unable to develop the technology for which they had an excellent concept. While their products worked in theory, they were unable to live up to their claims. Another important lesson can be learned from the brand’s marketing message, which implied that the devices provide accurate heart rate reports. They chose a misleading UVP, (unique value proposition), and failed to deliver.
Product Launch Failure #3: Nike+ FuelBand
It seems that wearable fitness trackers just aren’t making the cut when it comes to “product innovations.” The idea may be revolutionary, but brands seem to be struggling to turn their ideas into reality. Like the Fitbit, Nike has had their fair share of troubles with their FuelBands.
Back in 2015, the sports brand had to settle a class action lawsuit filed by users who claimed the device wasn’t providing accurate reports.
Source: William Hook on Flickr
The International Business Times reported that the reason for the lawsuit was because plaintiffs believed the brand violated consumer protection laws. That was because the brand made statements that could be considered misleading regarding the device’s ability to provide accurate fitness reports. Nike settled the lawsuit by providing $25 gift cards or $15 checks.
The Nike+ FuelBand failed due to a number of other reasons, in addition to the inaccurate reports, according to Wareable. For instance, the brand only focused on iPhone users, and practically ignored the other half of smartphone users. It was only two and a half years after its original launch that they launched the FuelBand app for Android users. By then, it was already too late.
What to Learn from the Nike+ FuelBand Failure
Like the lesson from Fitbit’s failure, the Nike+ FuelBand failure teaches us not to make false or misleading claims about what our products can do. But another important lesson from this example is to cater to the needs of all the consumers who might be interested in the product. By ignoring the needs of Android users, Nike failed to tap into a valuable potential market, and that also contributed to the FuelBand failure.
It’s important to note that when you’re developing platform-specific tech devices, you may not have enough resources to cater to the needs of users across all platforms. That means that after your initial product launch, you should set a goal to further expand your reach. Don’t wait too long to target consumers using other platforms.
Product Launch Failure #4: Amazon Fire Phone
Amazon’s Fire Phone also made a mark as one of the biggest product failures of 2014. Although it fulfilled its purpose by helping users compare the best prices of products with just the click of a button, it failed to satisfy certain needs of consumers.
It seems that Amazon was so satisfied with the device’s efficiency, that they overlooked other crucial factors. For example, the design had no visual appeal, which was a major factor in its failure.
In an age where everyone is concerned about looking fashionable while still efficiently completing their tasks, the Amazon Fire Phone just didn’t appeal to consumers. This is perhaps why the retailer quickly discontinued production of the phone after selling their existing stock back in 2015.
While the device was efficient for Amazon to meet their business objectives, it failed to meet the needs and wants of smartphone owners.
What to Learn from the Amazon Fire Phone Failure
The failure of the Amazon Fire Phone teaches several useful lessons. The company’s CEO, Jeff Bezos, told Business Insider that the Fire Phone disaster actually turned into a good thing. Despite the failure costing them millions of dollars, he explained that it was an experiment that helped them get closer to success. Bezos also said that in order to make it big, you need to first make, “big and noticeable,” mistakes.
Regardless of what the company learned from their own mistakes, what we should learn from the Amazon Fire Phone failure is to put the needs of users first.
Don’t focus on creating a demand for your product. Instead, create products that meet the demands of people. If your product fails to fulfill the needs of your target audience, there’s little chance it’s going to succeed, even with the most unconventional and sensational marketing efforts.
Product Launch Failure #5: Hoverboards
Like the Samsung Galaxy Note 7, the Hoverboard was another tech innovation that went up in flames (pun intended). These self-balancing scooters initially hit it big in 2015.
But soon after their launch, reports of Hoverboard fires started popping up. CNet reported that many of the fires started while the boards were charging. Others occurred while users where riding them.
Source: Max Pixel
By July 2016, the U.S. CPSC (Consumer Product Safety Commission) had recalled half a million units in the U.S. It had been determined that the root cause of the fires was overheating lithium-ion batteries. According to the CNet report, hoverboards do not have any safety standards. Nor do they fit into the existing safety standards of motorized scooters.
Top retailers like Amazon and Target made an effort to ensure that each individual component passed a safety test. However, individual components having a safety certification doesn’t ensure the safety of the product as a whole.
What to Learn from the Hoverboard Failure
The lesson from the Hoverboard failure is similar to the Samsung Galaxy Note 7 failure. Both products did not undergo thorough testing. Additionally, there’s also the fact that there were no safety guidelines for the manufacture of these products.
If you’re manufacturing something with no safety guidelines, you need to personally take it upon yourself to run a thorough test. It’s important that you ensure that your product doesn’t cause harm to consumers.
Product Launch Failure #6: EA’s Battlefield 1
Battlefield 1 wasn’t exactly a product launch failure. It was more of a product launch marketing failure.
The first-person shooter game from Electronic Arts (EA) was set in World War I. To promote the product launch, EA used the hashtag “#justWWIthings.”
After posting just two images, the campaign received tons of backlash, and caused quite a stir in the Twitterverse. After which, EA decided to halt the marketing campaign for a while, according to The Guardian.
One of the images was a GIF of a soldier getting burned by a flamethrower. The caption read, “When you’re too hot for the club.” EA tweeted the GIF with the text, “Weekend goals. #justWWIthings.” The post sparked an outrage, not only on Twitter, but on other social media platforms as well.
Source: The Guardian
The second image showed soldiers in a battlefield. It included the text, “When your squad is looking on point.” It sparked less controversy, but wasn’t met with much appreciation either.
All of this happened just 2 weeks before Remembrance Sunday. The holiday is similar to Veteran’s Day, and commemorates the loss of British military in both World Wars. The campaign was clearly very poorly timed. Many social media users expressed their disappointment with it for being insensitive towards people who died during the war.
EA promptly removed, and apologized for the posts. But hundreds of Twitter users had already used the hashtag to condemn and mock the game, (as you can see in the tweet below).
What to Learn from the EA Battlefield 1 Failure
As mentioned earlier, the biggest problem with this product launch was the insensitive nature of the promotion. Their mistake shows that product launch marketing can quickly make, or break your new product.
The #justWWIthings campaign didn’t exactly ruin the launch. But it did have a huge impact on the opinions of many social media users, who may have otherwise been potential customers.
During the brainstorming session of your product launch promotion, you need to carefully plan your strategy. If it’s a sensitive matter, will you be offending people by adding light humor? What kind of humor will best suit the campaign? Are there any upcoming holidays or events that may impact your product launch? All of these questions can make a huge difference in how well your marketing campaign promotes your launch.
As you’ve seen above, many new products are epic fails. In fact, research shows that anywhere from 30% to 80% of new products fail. Frightening thought, right?
When it comes to launching new products, even well-established industry leaders like Amazon and Nike make the occasional mistake. Luckily, we can learn a lot from their failures. Keep their mistakes in mind as you plan your product launch marketing strategy.
What did you think of these products? Are there any other epic product launch failures you’d like to add to the list? Let me know in the comments below. And feel free to connect with me if you want to make sure your product launch doesn’t end up a disaster.