Product and brand failures occur within product-based organizations. This is the negative aspect of the development and marketing process. In most cases, this failure rate ends up being a numbers game.
There must be some ratio of successful products to each failure.
When this does not happen, the organization is likely to fail, or at least experience financial difficulties that prohibit it from meeting profitability objectives. The primary goal is to learn from product and brand failures so that future product development, design, strategy, and implementation will be more successful.
Studying product failures allows those in the planning and implementation process to learn from the mistakes of others.
Each product failure can be investigated from the perspective of what might have been done differently to produce and market a successful product rather than one that failed. The ability to identify key signs in the product development process can be critical.
If the product should make it this far, assessing risk before marketing can save an organization’s budget and avoid the intangible costs of exposing their failure to the market.
Defining product and brand failures
A product is a failure when its presence in the market leads to:
– The withdrawal of the product from the market for any reason;
– The inability of a product to realize the required market share to sustain its presence;
– The inability of a product to achieve the anticipated life cycle;
– The ultimate failure of a product to achieve profitability.
Failures are not necessarily the result of substandard engineering, design, or marketing. Based on critics’ definitions, there are hundreds of "bad" movies that have reached cult status and financial success while many "good" movies have been box office bombs.
Other premier products fail because of competitive actions. Sony’s Beta format was a superior product to VHS, but their decision to not enable the format to be standardized negatively impacted distribution and availability, resulting in a product failure. The Tucker was a superior vehicle compared to what was on the market at the time.
This failure was due to General Motors burying the fledging organization in the courts to eliminate a future competitor with a well-designed product posing a potential threat to their market share. Apple has experienced a series of product failures as they continue to fight for market share.
Product failures are not necessarily financial failures, although bankruptcy may be the final result. Many financially successful products later posed health and safety risks. These products were financial and market share successes, including asbestos-based building materials, baby formula that provided insufficient nutrients for infants, and the diet medication cocktail of Pondimin and Redux called "Fen Phen" that resulted in heart valve complications.
What successful products may be next? Frequent and high dosages of Advil are suspected to correlate with liver damage. Extended use of electric blankets is suspected by some to increase the chance of cancer. The over-the-counter availability and high use of Sudafed is feared by some physicians and is currently under review by the U.S. Food and Drug Administration.
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