Skip to content

Accounting for Failure

Consider the following situation.

A new skincare product was launched two months ago as part of a main brand at the company. Unfortunately, it didn’t quite hit the mark. Due to the budget limitation, rather than promoting the product widely, the company decided to work with selected up-and-coming influencers and do some targeted social media advertising. Unfortunately, the product didn’t fly off the shelves. An urgent meeting was scheduled to discuss. The consensus was that the team made the right decision to work with the influencers and the launch tactics. After all, the influencers were hugely popular in TikTok, and the social media ads gave ‘healthy’ number of impressions and click-through across the target segment. There were some questions raised in the meeting that perhaps there was something wrong with the product fragrance or consistency as the main reason why the product didn’t resonate with potential buyers, when compared to the competitors.

An ad for Sony Betamax video recorder. Flickr/Nesster, CC BY

A lot has been written on product failures. Within the business, the blame for product failure is often directed to the product itself – rather than the manner in which the product is introduced to the consumers.

An example I can think of is the failure of Sony Betamax video tape compared to JVC VHS in the late 1970s. I’m old enough to remember the smaller Sony Betamax video tapes compared to the bulkier VHS tapes. The initial failure was attributed to Betamax’s higher cost and the initial capacity of holding an hour worth of recording. However, the fatal blow was Sony’s refusal to licence the format to other collaborators to spread its market presence. On the other hand, JVC actively built an ecosystem of partners and offered a larger selection of films. By mid-1980s, VHS was the de-facto video cassette format and the Sony Betamax tape was relegated to an example of product failure. This was despite Betamax’s technical excellence compared to VHS.

When it comes to product failure, sometimes there’s really nothing wrong with the product.

However, the team and the strategy behind the product introduction make it almost impossible for the product to succeed in the market. As mentioned in an earlier blog post, the success and popularity of the iPod was not solely due to the superiority of the product (there were other great MP3 players in the market when the iPod was launched) – or other reasons such as brand love (that has no robust empirical support whatsoever). Apple’s success with the iPod and the subsequent products is due to the foresightedness of Steve Jobs and Tim Cook in ensuring that the products are mass advertised across an extended period, and that they are well-distributed across the market so that potential buyers know about the brand and the product existence AND they could get their hands on the product – through whatever available channels or distribution points.

To squarely blame the product for its failure without looking at the product introduction tactics and strategies only perpetuates our addiction to blind innovation. Snacks need to be saltier (or milder), crispier (or more robust), with more (or less) intense flavours. Skincare needs to be lighter (or richer), creamier (or runnier), smells stronger (or milder), has more complex scientific terms. Maybe the new investment product is too simple (or too complex) or the product features are not comprehensive enough (or too many). The list goes on and on. I’m not saying that there’s no role in continuous innovation, but sometimes perhaps marketers have done a great job in satisfying the category needs with the new product, but have presented a subpar performance in ensuring that the product has the best chance to succeed. We need to acknowledge that some of the launch tactics that marketers take are counter-productive for the product performance in the market.

Research in this area is ongoing at the Ehrenberg-Bass Institute – and we are on a quest to ensure that we give better survival and growth opportunity for new launches. From research at the Institute, we know that buyers of new launches are likely to be heavy category buyers – those who know a lot about the category and the range of products that are available. If the Marketing team fail to factor this in within the product launch and distribution plan — and what this means for the necessary support for the fledgling product, they will inadvertently set the product to struggle and … fail.

Leave a Reply

Your email address will not be published. Required fields are marked *