Fewer than 10% of all new products/services produce enough return on the company's investment to survive past the third year. Why? Here's our Top 10 list of reasons new products and services fail:
- Marketers assess the marketing climate
inadequately.
- The wrong group is targeted.
- A weak positioning strategy is used.
- A less-than-optimal "configuration" of
product or service attributes and benefits is selected.
- A questionable pricing strategy is implemented.
- The advertising campaign generates an insufficient
level of new product/new service awareness.
- Cannibalization depresses corporate profits.
- Over-optimism about the marketing plan
leads to a forecast that cannot be sustained in the real world.
- The marketing plan for the new product
or service is not well implemented in the real world.
- The marketer believes that the new product and its marketing plan has died and cannot be revived, when, in fact there is the potential for resurrection.
Typically, if a company decides to do a test market before launching the product, managers run a test market. Traditional test markets are fraught with problems, starting with how companies select them—often because they are easy to manage rather than because they represent the actual markets a company wants to reach. Traditional test markets are expensive and competitors can steal ideas and sabotage results.
A well-done simulated test market, on the other hand, reduces the risks of launching a flop by collecting data a company needs to forecast the likelihood of success, more securely and more efficiently than a traditional test market.
For details on these reasons for new product failures, see our book, Simulated Test Marketing: Technology for Launching Successful New Products (Free Press, 1994)
This list of 10 reasons why new products and services fail is one of the many Copernican intellectual properties that differentiate our work.Back to Copernican University
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