10 Ailments that Cause New Product Failure

If you are like most companies, most of your new products launches don't meet your expectations—between 45% and 99% of the time, according to industry sources. Is your new product development sick? It could be, but you have to recognize the symptoms to cure the illness and bring it back to health. Here are the ten most common problems:

1. Techno-Machoism
The mis-belief that technology drives the market

In the 90's, some companies believed that technology drove the market and the press gave observers the impression that anything driven by new computer technology was going to be a success. Dot-coms blossomed and the bubble grew; then in 2000 it burst, big time. And many people lost a lot of money. But while technology never drove the market, techno-machoism continues. There's still talk in new product circles of the "fuzzy front-end," where a technology seeks a market need, want, or desire. But the plain truth is, if a customer doesn't need, want, or desire a product or service, it will never succeed, no matter how "cool" people in the company or the inventor thinks it is. While some remind us that consumers can't always tell you what they want, there are ways to identify what they need or desire before they can verbalize it and these new methodologies should be used.

2. Decisionosis
Decision by committee or multiple layers of decision-making

Back in the days of "emulate the Japanese," a lot of companies worked by consensus building. In many ways, this was good, but for new products, this got in the way. When committees make decisions or there are multiple layers of decision-makers, people start to make needless compromises and valuable time to market is wasted. New products don't need minuet decisions by committee; rather, they need leaders and champions for the cause. While these champions need clear guidelines to work within, for greatest efficiency and effectiveness, senior management only needs to get involved at a few critical points.

3. Egoistic
“ If we can make it, we can sell it!” Or: “We know this business, so we don’t have to check with the customer/consumer”

How many times have we heard these proclamations? They’re usually made by the unknowing or people who really believe they have a great company and think that their marketing and engineering people have crystal balls to give them the insights needed for success. But guess what? There are no crystal balls. That's not to say that senior people and their employees don't know their business; most do. But with so many things that make or break a new product, it’s impossible to ensure success without checking with the ultimate consumer at many points during new product development process.

4. Capacititis
“ The plant has open capacity. We need new products to fill it.”

While this is true for many companies, a new product's success doesn't depend on the needs of the company; rather, it depends on the needs of the end-user. Period.

5. Honchoism
The boss says s/he wants it or the boss says we should have it.

When a major commercial power tool manufacturer was rebranding a unique technology, the company discovered that it had spent several months engineering new tools using the technology. They also discovered that these new tools were created, because the Group VP from the parent company visited the company one day and while inspecting the engineering department, stated that the technology should be in this and that application. Off marched the troops to turn the desire of the boss into a reality, never mind the market size. In fact, while the engineering department had appropriate design input and the tools had been optimized, it was discovered that the market opportunity for them was so small that there would never be a financial payback. Eventually, the product was cancelled. Interestingly, when the Group VP who’d started it all heard about the cancellation, he not only said that was okay, he applauded the executive who’d decided to check the size of the potential market.

6. Tradism
Distributors or retailers say they want it.

In the best situations, distributors and retailers are a manufacturer's partner. And, it's true: they are closer to the consumer than the manufacturer (in a distribution sense). But, in many situations, the trade is fickle and when it comes to end-user needs, they are often guessing about what consumers want or need. Case in point, virtually every distributor was clamoring for an offshore outdoor power equipment manufacturer to enter a new product category and they gave the impression that they could sell as many products as the company could produce. No small undertaking, the company started on the project and devoted millions of dollars in resources to bring the new product to life. Having faith in their distributors, the product was born with only design-engineering research and no consumer marketing research that quantified the opportunity. The distributors were involved in the development and endorsed the product all the way until they were asked to reorder. While being an excellently engineered product, it was over priced. Ultimately, distributors asked for discount money to eliminate inventory; the product failed in the marketplace, and some senior managers at the company were fired.

7. Malpositioning
Failure to accurately position a product relative to competition

Positioning has lost its true meaning in today's advertising circles. Today the term is being used as a replacement for the old phrase, unique selling proposition. Making this mistake is a death knell for new products. Positioning should always be vis-à-vis competition and a new product will fail if it attempts to occupy the same space in the consumer's mind as an existing product. A classic example of this mistake is Coca-Cola's Surge. Launched with funding to thwart the success of Mountain Dew, the agency and Coca-Cola replicated Mountain Dew's exact positioning. Even in its heyday, it never broke beyond 1% share and ultimately bottlers started phasing it out.

8. Hyposynergistic
Failure to have consistent brand design and message across all forms of initial communication

Hyposynergism is all about how people learn. It's the simple truth that the human brain learns by putting like images, sounds, and feelings together. This psychology is important for new products because it is rare for consumers to buy a new product on the spot. Usually, consumers receive multiple impressions of the new product before buying. These can stem from advertising, editorial, or such in-store mediums as packaging, literature, or display. By ensuring that your new product has a consistent look and message (a.k.a. synergy), you will be able to help consumer recognize their need or desire for your new product. Regardless of the stimuli, they will begin to learn about your new product by putting together quips of information. If your message is on target, the impressions build quicker. The converse is true, too. With a complicated or disconnected message, it takes longer to make a discernable impression and, in fact, may never break through the clutter.

9. Malfunding
Under or over spending on the introduction leading to inadequate initial sales or unacceptable profit

This is one of most common errors for new product introductions. It occurs frequently because management either hasn't done the necessary homework or when there’s sales modeling, overrides the spending decision because they don't trust the findings. People in new product development can quickly recall experiences with under-funding but there also has been notable over-funding. One example occurred with McDonald's in the mid-nineties with the Arch Deluxe. After years of research, they launched this new product with a reported $200,000,000 in spending, a colossal amount of money. In short order (excuse the pun), the Arch Deluxe was discontinued. While the product was good and some say outstanding in its look and taste appeal, the company simply didn't develop or launch these products right.

10. Distributia
The inability to secure distribution in the outlets where consumers buy or the in-store locations where they buy

You’ve heard the story: An executive says, "We call on the "big box retailers" that sell a lot of these kinds of products; we can make a better product; lets take it to market." On the surface this argument to go-to-market is seems plausible. But, do they have ready access to the buyers that purchase this kind of product at the retailer? Are they willing to spend the dollars to motivate their sales force and make it worth their time to give up commission opportunities with the current line to make new contacts and connections with new buying personnel? Once a major paint manufacturer called to see what could be done to revive an auto/home cleaner that they had launched but did not meet their expectations. This was a superb product. The problem: It was sold to the paint buyer and was placed in the paint section and not with other cleaning products. Moreover, the manufacturer had the mis-belief that their commission sales people would sell it to the right buyer in what amounted to a whole new sales channel, because they were company employees. While the product was refreshed and repositioned, the sales force/channel issue was not effectively addressed. The result: a better product bit the dust.