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MARKETING FAILURE

AND
Marketing Failure
andSOLUTIONS
Solutions

Mohanrasu Govindan
Abstract

Product and brand failures occur on anMohanrasu.govindan@flextronics.com


ongoing basis to varying degrees
within most product-based organizations. This is the negative aspect of the
development and marketing process

Marketing Research

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Marketing Failure and Solutions


Overview:
Product and brand failures occur on an ongoing basis to varying
degrees within most product-based organizations. This is the negative
aspect of the development and marketing process. In most cases, this
failure rate syndrome ends up being a numbers game.
Studying product failures allows those in the planning and
implementation process to learn from the mistakes of other product
and brand failures. Each product failure can be investigated from the
perspective of what, if anything, 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 the product is marketed can save an organizations 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 in the market;
The inability of a product to achieve the anticipated life cycle as
defined by the organization due to any reason; or,
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. Sonys Beta
format was a clearly superior product to VHS, but their decision to not
enable the format to be standardized negatively impacted distribution
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Marketing Failure and Solutions


and availability, which resulted 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 fledgling
organization in the courts to eliminate a future competitor with a welldesigned product posing a potential threat to their market share.
Apple has experienced a series of product failures, with consistent
repetition 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 were later found to pose health and safety risks.

Premature genius The Apple Newton:


The Newton Message Pad platform was an early personal digital
assistant, an ancient ancestor of the iOS platform used in the iPhone
and the iPad, and the first tablet platform developed by Apple. The
Newtons life span was a brief one, with development starting in 1987,
launch in 1993 and cancellation in 1998. The product was a huge
financial disaster for Apple. Although the exact scale of the Newton
losses remains unconfirmed, some sources say that the company sunk
a billion dollars into the Newton and recouped only about one quarter
of that amount in sales. This is hardly surprising given that, even at
the height of the devices popularity, only an estimated 200,000
Newtons were in use.
Newton was intended to revolutionize personal computing. The end
goal was to create a tablet computer costing around the same price as
a desktop computer, opening up an entirely new market around
personal digital assistant devices. Among other features, the tablet
would be the size of an opened magazine, have cursive handwriting
recognition and a special user interface. For most of its design
lifecycle Newton had a large-format screen, more internal memory,
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Marketing Failure and Solutions


and an object-oriented graphics kernel, but of the three sizes
developed, the initial 1993 launch product - the Message Pad - was a
scaled down junior product.
One of the original motivating use cases for the Newton design was
the Architect Scenario, in which Newtons designers imagined a
residential architect working quickly with a client to sketch, clean up,
and interactively modify a simple two-dimensional home plan. Whilst
the architect in this instance would certainly benefit from the
Newtons features, Apple was hardly aiming at a large target market
by focusing on such a specific scenario.
Since the Newton was cancelled, industry speculation has identified a
number of reasons as to why the Apple Newton failed so badly.
Principal among these is the fact that Apple ignored certain customer
needs as to the specifications of the tablet.
The Apple Newton was: Too big. At around 4.5 x 7 inches, almost one
inch thick and weighing almost a pound, the Newton was really too
large and heavy to be considered pocketsize.
Too expensive. The Newton cost about $700 for the first model and as
much as $1,000 for later versions.
Cumbersome to use. It had software problems, notably, it operated
too slowly; certain actions, such as scrolling through notes, took too
long and its handwriting recognition was fairly inaccurate.
Pre-announced too early. The Newton was announced nearly two years
before it launched, creating unrealistic expectations for a
transformational product, which was then rushed out to gain an edge
in a reckless public relations battle.
Seen as the pet project of then Apple CEO, John Sculley. In 1993,
Sculley - who had forced out Steve Jobs in 1985 was himself forced
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Marketing Failure and Solutions


out, just when the Newton team was getting ready to release their
first product.
Premature. Though some competing products were put out just before
it, including the Amstrad Pen Pad, the Newton had no real market
familiarity.
Although Apple had learned about key customer needs during market
research, it apparently ignored these when it came to developing the
product, opting instead to push ahead and beat its competitors to
launch.
Newton Project Leader, Larry Tesler said, In the end, we cut corners
and ignored problems to try to meet a price range and a ship date
that we had prematurely announced to gain an edge in a reckless
public relations battle.
In 1995, three years before the Newton was cancelled, Palm
Computing (then a pision of U.S. Robotics) introduced some serious
competition into the personal digital assistant market. The company
quickly dominated the handheld market with the wildly popular Palm
Pilots, which were smaller, cheaper and easier to use than the
cumbersome and costly Newton.
The original motivation of the Palm Pilots inventors was to create
handwriting recognition software for other devices but during the
research process, they realized they could create a competitive
handheld computing device. By 1997, Palm had a 66 percent share of
the personal digital assistant market, Windows CE had 20 percent, and
Newton just six percent (Dataquest).
The Apple Newton is said to have failed because it was ahead of its
time and because its launch was badly thought through. Although the
technology was forward thinking, it did not meet identified customer
needs, was not able to adapt to those needs and could not recover
from being put onto the market before it functioned properly. Despite
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Marketing Failure and Solutions


this, Newtons existence has arguably had a significant impact on the
industry - much of the success of later Apple products such as the
iPod, iPhone and iPad, and even competitor devices like the Palm Pilot,
is said to have been built on the back of the Newtons development.
Even the advertising of the iPad clearly echoes that of the Newton.
However, unfortunately for Apple, it was the Palm Pilot that led to a
real revolution in handheld computing, not the Newton. Jeff Hawkins,
one of the original creators of the Palm Pilot, suggests that the
devices commercial success has a lot to do with responding to
consumers needs. He maintained that it is important to make tradeoffs on what to put in and what not to put in, so that the product
maintains the correct balance of technological features, usability, and
affordability. If Hawkins had worked for Apple at the time, perhaps
things would have turned out rather differently. Having said this, Apple
seems to have recovered quite well.

Quadraphonic Sound Audio Device Failure:


New products do not always succeed, even if people agree that
the world would be a better place if they would. New
technologies are not always taken up by the mass-market,
despite early claims of their superiority over the status quo.
In the early 1970s, Quadraphonic sound failed to displace stereo
sound as the industry standard for playing audio recordings. This
came as something of a surprise, since the initial following of
quad was huge and early take-up of the technology was
encouraging.
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- Many analysts attribute the failure of quadraphonic sound to two
facts:
o Firstly, there were still some concerns about the long-term
potential of quad, since early versions of quad were
introduced somewhat prematurely and led to dissatisfaction
of the early influential consumers;
o Secondly, and perhaps more importantly, there was
uncertainty about which of the several different
incompatible versions of quadraphonic sound would be the
eventual industry standard.
The attempt to introduce quad technology resulted in enormous costs
to both consumers and producers because the existing coordination
problem confused customers. Joining the network requires a sunk
investment (for consumers). If the network does not grow adequately
or, in the worst case, is abandoned, consumers are trapped with an
orphan technology. In other words, expected network benefits will
not be realized and consumers may be unwilling to join the network.
This problem is particularly severe where the successful diffusion of a
product depends on the availability of complementary products
(records, in our case).
Confusion among the public about the nature, performance and
operating characteristics of quad and merits and demerits of matrix vs
discrete technology, prevented four channel of becoming the next
step after stereo (disillusionment was setting in by the end of 1974)
Missing optimism from retailer side and insufficient promotional effort;
Owing to Quad wars instead of concentrated efforts to promote
quad in general, system- specific appeals were much less subject to
free- riding inefficiencies
Collusive arrangement on promotion between rivals could have
helped to clarify the confusion and skepticism of the consumers
towards the quad.
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-

Wrong entry point/strategy

Poor advertising of advantages

Lack of standardized technology among producers

Two possible reasons for failure:


1. The confusion of customers. The introduction of a competing,
yet incompatible technology confused both existing and potential
customers as well as suppliers of records (artists and record
companies). Both technologies were introduced too early (and
prematurely), which disappointed early customers. These are the
customers who usually start off the desired bandwagon effect. In
addition, the introduction of the second technology gave rise to
uncertainty about which technology would become industry
standard. This also holds for artists and record companies, who
were mostly reluctant to switch because they didnt know which
format to produce (producing both would have been very costly).
2.

The early success of the technology might have prevented


long-term success of the quadraphonic technology. Initially, the
number of early adopters was quite promising. However, the
introduction of a second, incompatible technology split the
market and lowered expected future benefits. This lead potential
customers, whose main concern was the availability of software
(which was not given owing to the market splitting between
discrete and matrix) to abstain from switching to quadraphonic
sound. Rather, they stayed with the old stereo systems.

Possible Solution:
collusive arrangement on promotion between
rivals could have helped to clarify the confusion and skepticism of the
consumers towards the quad.
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Marketing Failure and Solutions


Common reasons for product failures
In addition to a faulty concept or product design, some of the most
common reasons for product failures typically fall into one or more of
these categories:
High level executive push of an idea that does not fit the
targeted market.
Overestimated market size.
Incorrectly positioned product.
Ineffective promotion, including packaging message, which may
have used misleading or confusing marketing message about the
product, its features, or its use.
Not understanding the target market segment and the branding
process that would provide the most value for that segment.
Incorrectly pricedtoo high and too low.
Excessive research and/or product development costs.
Underestimating or not correctly understanding competitive
activity or retaliatory response.
Poor timing of distribution.
Misleading market research that did not accurately reflect the
actual consumers behavior for the targeted segment.
Conducted marketing research and ignored those findings.
Key channel partners were not involved, informed, or both.
Lower than anticipated margins.
Using these potential causes of a product or brand failure may help to
avoid committing those same errors. Learning from these lessons
can be beneficial to avoid some of these pitfalls and increase the
chance for success when you launch that next product or brand.

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