Why Products Fail - Technical Entrepreneurship Case Studies

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Why Products Fail
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Why Products Fail
Jonathan Weaver
Mike Vinarcik
Why Products Fail
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Acknowledgment
• This lecture is primarily derived from the following
Cohort 5 MPD Thesis and Thesis Presentation:
A Concept Selection Tool to Extend Pugh Matrices, by
Moe Fawaz, Michael J. Vinarcik, Susan Wellman-Smith
Why Products Fail
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Why Products Fail
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Why Products Fail
Product Planning Gone Wrong
• What is it?
• It’s an X-Ray machine used to
fit shoes
• It was popular in the late 1940’s
and the 1950’s
• Then people realized that the
radiation danger outweighed the
perfect shoe fit – especially
when many machines were
poorly maintained, leaked
radiation, and were improperly
adjusted
http://www.neatorama.com/2008/03/06/shoe-fitting-x-ray-machine/
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Why Products Fail
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Definitions
• Product Failure: (1) occurring whenever management
regrets the new product introduction, (2) a product failing
to live up to its company expectations in the market
• Product Successes: products which met or exceeded their
objectives
Why Products Fail
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Some Basics
• Likelihood of product success increases if the company understands
user requirements and provides “market-pull” type products
• The most common reason for product failure is inadequate market
analysis
– Surveys have shown that about 2/3 of products considered to be a
technical success are product failures
• Product success requires:
– correct identification of an existing demand
– efficient development
– presence of key individuals
– a clear advantage over competing products
Why Products Fail
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Some Stats on New Products
•
•
•
•
1 of 7 new product concepts succeed commercially
– the others are either cancelled or fail after
introduction
80% of the products which fail do so very shortly after
their introduction; a further 10% die within 5 years
46% of resources are devoted to new products are spent
on products that fail
Product failure spans all domains of products (and
services)
Why Products Fail
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Facts About Consumers
•
•
•
Consumers are becoming increasingly educated about
products and increasingly discriminatory
Better products don’t necessarily cost more
Consumers select products closely tailored to their needs
using factors such as :
– Price
– Quality
– Reliability
– Ease Of Operation
– Safety…
Why Products Fail
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Facts About Companies
•
•
•
Established global giants are just as likely to introduce
flops as smaller, younger companies
Companies do not learn from each others’ mistakes (in
fact they often follow them)
New products are more likely to succeed if the company
truly understands user requirements and selects an
appropriate concept which satisfies those requirements
Why Products Fail
Six Main Principles Of Product Failures
1.
2.
3.
4.
5.
6.
Idea Failure
Extension Failure
Public Relation Failure
People Failure
Re-Branding Failure
Culture Failure
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Why Products Fail
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Idea Failures
Description
Reasons for
Failure
Lessons
Learned
Main Rival
Persil Power
New detergent
formula that is
supposed to
fight any stain
Formula was so
powerful that at
high temperature it
didn't only destroy
the stain but the
clothes as well
Products need to
be tested in
every
environment
they are likely
to be used
Ariel, effective
without
destroying the
clothes
The Hot
Wheels
Computer
A computer
that targeted
the boys’
market, had
hardware
decorated with
hot wheels
flame logo
Attempt to gender
marketing
Get designers
involved at the
start. Designers
should give
engineers input
on product
usability and
interface issues
Radion
A washing
powder
It wasn't different
enough from other
popular products
Differentiate
yourself from
the competition
More expensive
and lower
quality than its
main rival
Why Products Fail
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The Extension Failure
•
•
•
Extension cannibalizes sales
Divides existing pie into smaller slices
Addresses the needs and wants of the marketer rather than
those of the consumer
Why Products Fail
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Extension Failures
Description
Reasons for Failure
Lessons
Learned
Main Rival
Crest
First fluoride
toothpaste
brand.
Crest kept on offering
new variations on the
same theme, thereby
confusing the
toothpaste-buying
public.
Don't confuse the
customer by
offering too
many product
duplicates.
Colgate came
with fluoride,
tartar control,
gum
protection…all in
one.
Heinz All
Natural
Cleaning
Vinegar
A doublestrength
cleaning aid
The fact that both
vinegar and Heinz are
normally associated
with things you can eat
only made the product
more confusing for the
customer.
Products can be
expanded
provided they
remain true to
their core
identity.
Xerox Data
Systems
A computer
technology
and data
processing
Xerox was trying to
transform itself into an
IBM-style
"information
business,” but the
public was unwilling
to think of Xerox in
any terms other than
the copier company.
It is vital to know IBM
the association of
the brand name
in the consumer's
mind before
introducing a
new concept.
Why Products Fail
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Public Relation Failure
•
When a company doesn’t provide the truth about a
negative incident of a particular product
– This might lead to an automatic new concept flop
– Ex. Firestone handling of the tires issue
Why Products Fail
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The People Failure
•
Product ultimately depends on individuals who represent
it in order to survive
– Ex. Enron, top executive acted irresponsibly
Why Products Fail
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The Re-Branding Failure
•
Can undermine the company’s previous marketing efforts
– Tommy Hilfiger
Why Products Fail
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The Culture Failure
•
•
The internet facilitates expansion to new markets
It is important to remember cultural differences which can
affect the product’s chances to succeed in new markets
–
–
–
–
–
Hallmark cards in France (they prefer to write their own words
inside)
Kellogg's cereals in India (traditionally had hot vegetables for
breakfast, cereal expensive)
Pepsi in Taiwan (“Come Alive With the Pepsi Generation” was
translated “Pepsi Will Bring Your Ancestors Back From the
Dead”)
Parker pens in Mexico (“It Won’t Leak In Your Pocket” was
mistranslated to a slogan involving unwanted pregnancies)
Vicks products in Germany (the brand name had negative
connotations in German)
Why Products Fail
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Some Classic Failures
Product
Description
Failure criteria
Kodak mc3
MP3 player, a digital
camera, and a digital
video camera, all in one.
All in one for $ 300 came
at the cost of quality
Betamax
Was regarded as far
superior in sound and
picture quality to VHS
formats
Consumers turned their
nose up on the price –
which was driven higher
than VHS largely due to
Sony’s proprietary stance
Manual Typewriter
A victim of technological
evolution
Hydraulic elevators
Had an alarming failure
and fatality rate in
skyscrapers and were
quickly replaced by
electric versions
Why Products Fail
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Failures Due To Technology
•
Standard Photographic Cameras Vs. Digital Cameras
•
Polaroid Vs. Digital Cameras
Heuristic:
Concepts Based Around A Particular Technology Have A
Short Half-Life
Why Products Fail
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Bad Design Concepts
Top-loading VCR
Can’t Put Anything On Top
Of It.
Heuristic: Consider The Environment That The New Product
Will Be Used In.
Why Products Fail
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Bad Design Concepts
The On/Off Switch Can
Be Easily Activated By Accidentally
Pushing An Object Against It
On/Off Switch Is Placed
At An Angle
Why Products Fail
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Bad Design Concepts
Most people expect to push the buttons
Why Products Fail
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Bad Design Concepts
“Difficult To Tell Which
Control Goes With Which
Burner”
“Controls Are Arranged In
The Configuration As The
Burners”
Why Products Fail
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Heuristics From Concepts That Flopped
•
•
Chord Of Familiarity
– Radical concepts should be kept on the market for
enough time or be heavily advertised
Communicate Clearly
– Never assume that the consumers know
• Why they should use the product
• How they should operate it
• What its purpose may be
Why Products Fail
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Heuristics-continued
•
•
•
Convenience
– Consumers will select the product that makes their
lives easier
Extraneous Extras
– Consumers won’t pay for what they don’t want or
can’t use
Failure Is Opportunity
– Failure always presents new opportunities
Why Products Fail
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Heuristics-continued
•
•
Ignore Office Politics
– Don’t be afraid of pointing out the flaws of a bad concept
Picket Fences
– Share thoughts with the people your concept is targeting
Why Products Fail
Hot Buttons For Success In The Millennium
•
•
•
•
•
•
•
•
Convenience
Environment
Ethnicity
Fun
Nutrition
Packaging
Size
Youth
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Why Products Fail
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Summary of Considerations
•
•
•
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Creative developers must be given time to make mistakes
Innovation= 99% perspiration and 1% inspiration
No better way to success than by learning from mistakes
There is as much to learn from failures as there is from
successes
Why Products Fail
Paul McManus - What Makes A Venture
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Entrepreneurship Seminar Series
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