Most new product launches in the US are duds; in fact, it is estimated that eight out of ten products end up in failure. In India, the situation is still not that grim because, unlike the US which is a saturated, highly competitive and low-growth market, India is a growing market with fewer brands in each category. With increasing affluence, there is also a higher propensity to consume. Thus, even not-so-good products and their not-so-great marketing have not met with the same fatal result that many brands in the US have. However, this happy scenario is likely to change pretty soon as newer brands keep entering the Indian market, providing greater choice to consumers.
Back to the US. Why is it that the US brand graveyard is full of dead brands? Why is the success rate of launches so abysmal? Robert McMath had some possible answers. McMath ran (I am speaking in the past tense because I am not sure whether his Center is still operational) the New Products Showcase and Learning Center in Ithaca, New York, that had a repository of over 80,000 brands and products that at one time or another were considered “new and innovative” or “new and improved” but are since dead. These brands died for a reason; yet, what is amazing and inexplicable is that marketers keep making the same mistakes again and again.
Based on their study of the 80,000 duds at the Center, Robert McMath and Thom Forbes wrote the book “What Were They Thinking?”
Here are some invaluable lessons from the book:
- Keep the past in perspective. Or, avoid Corporate Alzheimer’s. Due to various reasons, including mergers, downsizing, letting go of experienced executives, lack of loyalty and general insecurity, companies just do not learn from past mistakes. History has invaluable lessons and there is just no sense in repeating mistakes of the past. Yet, companies continue to repeat them.
- Make advertising agencies your true partners. Today, we treat our ad agencies as suppliers rather than partners who advise and co-create.
- Communicate the benefits, not the features of your product. Yet, marketers seem to forget this fundamental point.
- New products should not be so different that they don’t strike the ‘Chord of Familiarity.’ Some products are too different from the products, services and experiences consumers normally purchase. You can tell that some innovative products are doomed as soon as you hear their names – Toaster Eggs, Cucumber Antiperspirant spray, Health-Sea Sea Sausage.
- Communicate clearly. This is not as easy and not as common as it sounds.
- Brand/Line extensions have their advantages.
- It’s cheaper to introduce an extension.
- An extension can expand a brand’s franchise.
- An extension is a way to determine, quickly and cheaply, if a fad is going to be a trend or just a fad.
- An extension is a way to control shelf space.
- An extension is an implied guarantee of consistency.
- If an extension doesn’t move, you can quickly make a substitution.
- An extension can revive a flagging brand.
- An extension can scare off competition.
- But extensions can be bad – very.
- When there are too many extensions, the brand becomes blurred.
- An extension cannibalises sales.
- An extension divides the existing pie into smaller slices.
- An extension may make sales surge while hiding fundamental weaknesses in the product.
- An extension usually addresses the wants and needs of the marketer or of the brand manager rather than those of the consumer.
- Extensions can undermine brand loyalty.
- Extensions can cost you customers.
- Don’t fool with your cash cow. The value of a brand is its good name which it has earned over time. One should not attach the good name to something totally out of character. An example is Crystal Pepsi. The authors admonish PepsiCo for fooling with its flagship brand by launching a clear cola that was totally out of synch with perceptions of coal drinks.
- Avoid me-too madness. Me-too marketing is the number one killer of new brands. Pepsi and Dr. Pepper (and Thums Up in India) are the two survivors against Coca Cola. But did you know that there were other cola brands? Toca-Cola? Coco-Cola? Yum-Yum Cola? French Wine of Cola? King-Cola. The same is true in hundreds of other product categories. However, me-too marketing can succeed if:
- You have a demonstrably better product – or you must be able to make consumers believe that you have a demonstrably better product – than the market leader.
- You must spend enough money in advertising and promotion to make consumers aware of your demonstrably better product.
- You must convince retailers that you will spend enough money in advertising and promotion to keep consumers aware of your product.
- You must be prepared to spend more money than the competition to ensure sufficient shelf space for your product.
- You must be able to withstand a price war, which may continue for years, during which your profits will be negligible.
- Avoid office politics and don’t try and keep the boss happy because it was his idea. Be forthright where brands are concerned.
- A bad concept continues to gather momentum because nobody has the guts to point out its flaws.
- A project gets the green light because it “can” be done.
- As silly as a concept may be, nobody wants to be accused of having missed an opportunity.
- A product rolls out because executives associated with it are afraid to admit that they were too optimistic about its prospects.
- The marketing hot buttons for success today.
- Greater convenience. People will pay a premium for this. For something that saves time.
- Environmentally sound. People are getting more environmentally conscious, more so in the US than in India.
- Ethnically diverse. In the US, immigrants are bringing in newer tastes and flavours. For example, hotter and spicier foods.
- People like fun; try and infuse your brand with that.
- We are all getting more health conscious.
- Packaging can differentiate, make a product look special.
- Size can work if it delivers a tangible benefit.
- Kids are getting more aware, smarter. Also, they are spending more time alone because both parents are working. There is a big market for the youth/kids.
The points that McMath and Forbes make in their book are so simple and straightforward that it is difficult to disagree with most of them. However, the sad, and funny, part is that marketers continue to repeat the unrepeatable.
Source: What Were They Thinking? Marketing Lessons You Can Learn from Products that Flopped – Robert M. McMath and Thom Forbes.
Visual courtesy: https://www.flickr.com/photos/irishwildcat/