Reference no: EM1334956

Explain Product failure

Did you know that only about a third of the products test-marketed do well enough to go on to the next phase? The areas that are most often used as a "test market" include: Grand Junction, CO, Cedar Rapids, IA, Eau Claire, WI, Pittsfield, MA, Odessa-Midland, TX and Wichita Falls, TX. These areas have been selected because they appear to have characteristics that are most representative of the US consumer.

Read the list (below) for the eight reasons why products/services fail. In addition to these eight reasons, a ninth reason could be added which includes, "little or no market research." Although no research can be associated with many of these failures, it certainly is worth a listing of its own since it is an area that is often overlooked.

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Pick any one of the 25 failed products from this website and list detailed two reasons why you think the product failed. Be sure to connect your reasoning's to the list of product failures in the attachment. Please ensure that the reasons are thoroughly complete and not in general.

Marketing Resources for New Product Failures
Marketing Reasons for New-Product Failures: Both marketing and non-marketing factors contribute to new-product failures. Using the research results from several studies on new-product success and failure, we can identify critical marketing factorsâ?"which sometimes overlapâ?"that often separate new-product winners and losers.

1. Insignificant point of difference. Research shows that a distinctive point of difference is the single most important factor for a new product to defeat competitive onesâ?"having superior characteristics that deliver unique benefits to the user. In the mid-1990s, General Mills introduced Fingos, a sweetened cereal flake about the size of a corn chip. Consumers were supposed to snack on them dry, but they didn't. The point of difference was not important enough to get consumers to stop eating competing snacks such as popcorn and potato chips.

2. Incomplete market and product protocol before product development starts. Without this protocol, firms try to design a vague product for a phantom market. Developed by Kimberly-Clark, Avert Virucidal tissues contained vitamin C derivatives scientifically designed to kill cold and flu germs when users sneezed, coughed, or blew their noses into them. It failed in test market. 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 failure was its lack of a product protocol that clearly defined how it would satisfy consumer wants and needs.

3. Not satisfying customer needs on critical factors. Overlapping somewhat with point 1, this factor stresses that problems on one or two critical factors can kill the product, even though the general quality is high. For example, the Japanese, like the British, drive on the left side of the road. Until 1996, U.S. carmakers sent Japan few right-hand-drive carsâ?"unlike German carmakers who exported right-hand-drive models in several of their brands.

4. Bad timing. This results when a product is introduced too soon, too late, or when 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 new MP3 players.

5. Too little market attractiveness. The ideal is a large target market with high growth and real buyer need. But often the target market is too small or competitive to warrant the huge expenses necessary to reach it. OUT! International's Hey! There's A Monster In My Room spray was designed to rid scary creatures from a kid's bedroom and had a bubble-gum fragrance. While a creative and cute product, the brand name probably kept the kids awake at night more than their fear of the monsters because it implied the monster was still hiding in the bedroom. Also, was this a real market?

6. Poor product quality. This factor often results when a product is not thoroughly tested. The costs to an organization for poor quality can be staggering and include the labor, materials, and other expenses to fix the problemâ?"not to mention the lost sales, profits, and market share that usually result. For example, after Microsoft launched its Xbox 360 video game console, millions began to experience the "red ring of death." The problem: The consoles' microprocessors ran too hot, causing them to "pop off" their motherboards. Microsoft had to set aside $1.1 billion to extend its warranty and fix any affected console for freeâ?"costing it future sales and reducing its market share lead in the multi-billion dollar market over rivals Sony and Nintendo.

7. Poor execution of the marketing mix: brand name, package, price, promotion, distribution. Somewhere in the marketing mix there can be a showstopper that kills the product. Introduced by Gunderson & Rosario, Inc., Garlic Cake was supposed to be served as an hors d'oeuvre with sweet breads, spreads, and meats, but somehow the company forgot to tell this to potential consumers. Garlic Cake died because consumers were left to wonder just what a Garlic Cake is and when on earth a person would want to eat it.

8. No economical access to buyers. Grocery products provide an example. Today's mega-supermarkets carry more than 30,000 different SKUs. With about 20,000 new packaged goods (food, beverage, health and beauty aids, household, and pet items) introduced each year, the cost to gain access to retailer shelf space is huge. Because shelf space is judged in terms of sales per square foot, Thirsty Dog! (a zesty beef-flavored, vitamin-enriched, mineral-loaded, lightly carbonated bottled water for your dog) must displace an existing product on the supermarket shelves, a difficult task with the high sales per square foot demands of these stores. Thirsty Dog! failed to generate enough sales to meet these requirements.