Identify a new product that you have seen introduced recently that totally failed in the market. What could have been done differently in the new product development process to prevent the failure?
From being one of the most successful ventures to declare itself bankrupt in the year 2010, this is a story of ‘Blockbuster LLC’. They shut their business officially in November 2013, almost three-decade after their initiation. Blockbuster used video rental shops, mail, streaming, video on demand, and Cinema Theater as modes to provide movies and video game rental at home of their customers.
Competition from the Netflix mail-order service and video on demand services were major factors in Blockbuster’s eventual demise (Ferguson, 2014). There was a point in time in 2000 when Netflix offered itself at US$50 million for purchase to Blockbuster but they laughed them out. The business by acquiring Netflix and their modality could have made use of their over nine thousand outlets and eighty thousand employees to speed up the sell. But they didn’t care much about it. Netflix on the other end was growing in size and its popularity was increasing. Along with that all, the demand for the service was on the rise as well. Blockbuster didn’t realize it either, they failed to move as per the shifting trend.
Blockbuster declined Netflix just for they still had to see a profitable year after three years in business and disregarded their popularity but rather decided to partner with Enron Broadband which is very much popular for its fraudulent accounting practices even to date. The price of DVD player plummeted to now be under 100$ in 2001 and with 9/11 people stayed back home and that was one of the favorite past time for most of the people. Netflix, on the other hand, was growing at a rapid pace with more than a million subscribers joining them by 2003 and finally had their first profitable year. However, Blockbuster decided to do nothing about it nor change their process until 2004, when they launched their online DVD mail service. Walmart joined the race as well and it was now a three-way race to the top. However, Blockbuster and Walmart both were kicked out of the race as they were unable to get any success as they were too late. Blockbuster CEO at the time told that they might have won had they started sooner. That marked the end of brick-and-mortar video rental service along with their huge success. The company filed for bankruptcy in the year 2010 and went through liquidation process (Chopra & Veeraiyan, 2017).
The business might have still been in business and as much success as it once was if they were willing to change their business model and show some flexibility. In the world of business, being ridged would mostly back-fire. A business should look at what customer needs and act on their demand. It looked like Netflix was doing the market research/testing for Blockbuster and they could have easily capitalized had they shifted their focus to the same business model as Netflix. They could have still kept their business model intact and work on that as a side idea and could have crushed Netflix and established themselves as the king in the field. But the unwillingness from the business to experiment and take risk marked the end of the business altogether. Looking back at the situation, I would have thought longer into the future and capitalized every opportunity to make use of the advancing technology and proven business method used in my working area. Facebook acquired WhatsApp for a record amount as it was building up and might put a competition to their messaging application. So, at times a way for a business to keep progressing is also by acquiring or following in the footsteps of other business which have made the best use of technology to prove a market segment.
Chopra, S., & Veeraiyan, M. (2017). Movie Rental Business: Blockbuster, Netflix, and Redbox. Kellogg School Of Management Cases, 1 (1), 1-21.
Ferguson, C. (2014). Technology Left Behind-The Temptations of Netflix. Against The Grain, 22(6), 83-84.
As the first automobile industry, Hulas Motors Pvt. Ltd, owned by the Golcha organization, started its journey in 1996. With an investment of 4 million they have so far produced five types of motors which have been listed as
1. Big Cargo (Commercial use)
2. Small Cargo (Commercial use)
3. Nano (2 + 1 Seater)
4. City (4 + 1 Seater)
Among these, the Hulas Mustang and Hulas Sherpa were considered their flagship products. (motors, 2017) With a retail price of 14 to 18 lakhs this was a Nepal made SUV that was powerful enough and designed to go off road, had a diesel engine and middleclass Nepalese could afford. With over 14 dealers and over 150 service centres the vehicle sale had risen to 1,400. (News, 2011)
An unexpected turn of events in 2011 took place when the then Prime Minister endorsed the Nepal made vehicle. "New Nepalese PM Baburam Bhattarai has spurned the opportunity to travel in a luxurious car and has instead chosen an unglamorous vehicle assembled in Nepal. (Dhakal, 2011)” This step by then Prime Minister, was a big promotional boost that even Hulas motors had not anticipated.
Thus referring to the 4Ps of Marketing, i.e. Product, Place, Price and Promotion, Hulas motors had everything going for them. They had a good product, it had aesthetic value as it was built in Nepal, had a competitive price yet was low enough for middle class families to purchase and as for promotion, who better than the head of the state endorsing the product as a genuine made in Nepal. The product was customer centric, as people could afford it and goods could be transported to the remote places even off road. They even had a shared vision. "Industry analysts say that billions of rupees spent every year on importing foreign vehicles could be saved - and hundreds of jobs created - if more of the vehicles were bought in Nepal. (Dhakal, 2011)”
But one crucial thing that Hulas Motors missed was the quality of the vehicle. Quality meaning the smoke emitted by the vehicle was not up to the standard as demanded by the Government. Nepal government had levied EURO III as the standard to be maintained by vehicles. "According to Managing Director Das, the government had given the Company two years to fulfil the Euro III standard but it had asked for an extension by a year, which was rejected. (Setopati, 2011)”
A very innovative and a product that was made in Nepal failed since it was not able to meet the emission standard. New innovation thus have to look into all aspect of the product before launching. All factors of both micro and macro environment and its implications have to be brainstormed. The R&D needs to work on an engine that can meet the emission standard and perform equally well on the road. The company can still initiate a new project to launch this product as it cannot be considered a dead product. A new attempt has to be taken for a new prototype that needs to be cleared on all standards set by the Government of Nepal before bring launched into the market.
Dhakal, S. (2011, August 31). PM Bhattarai praised for choosing Nepal-made Mustang. Retrieved from BBC News: http://www.bbc.com/news/world-south-asia-14729823
motors, H. (2017). Hulas motors. Retrieved from Hulas motors: http://www.hulasmotors.com/index.php
News, L. N. (2011, Jan 11). Hulas motors closed due to Euro III standard. Londan Nepal News , p. 1.
Setopati. (2011, January). Mustang manufacturer Hulas Motors closes production. Retrieved from Setopati: http://archive.setopati.net/business/5059/
Product or brand failure occurs on an ongoing basis to varying degrees of the most product-based organizations. This is viewed as the negative aspect of the development and marketing process (Kotler, 2016). Moreover, the product failure occurs if the profitable objectives are not met. It is the withdrawal of the product due to certain reasons. Similarly, product failure is the inability of the product to achieve the anticipated life cycle as denied by the organization. However, even if the products fail the main goal of the companies should be to learn from the mistakes so that they can enhance the future product development, design strategies and implement them to become successful and not a failure in the market.
I’m sure you remember how Microsoft decided to take on the "MAC ios” in 2007. The company launched window vista, which promised to do everything with additional features then "MAC ios”. They had invested almost $ 500 million for promotion, production and development cost (Tim, 2011). And yet in the spirit of great promise and expectation of Microsoft became the main reason of failed Vista 2007 in the market.
Why did Vista 2007 fail?
Microsoft admits that they were just chasing Apple and created a product that offered no reasons for customers to switch. And the software had a so many compatibilities and performance problems that even Microsoft most loyal customer revolted.
The Product failed miserably learning a huge amount of criticism on its side. However, in order to prevent the failure of the product some crucial steps had to be taken into consideration (Schneider & Hall, 2011). Windows should have done a massive marketing research regarding its potential customer. I think Windows should have focused their customer, product only rather than chasing with Apple. They might have given out a proper and a sensible message to their customer so they understand why Vista was/is really important for them. I think they should have invested more time in doing a proper research might be preventing failure. Additionally, the main way to prevent the product failure would have been by doing better execution which includes the proper design of the products (David, 2015).
David, A. a. (2015). Four ways digital works to build brands and relationships. Journal of brand strategy , 37-48.
Kotler, P. & Keller, K. L. (2016). Marketing management (15th Ed). New York: NY, Prentice Hall
Schneider, J., & Hall, J. (2011). Why Most Product Launches Fail. Harvard Business Review .
Tim, L. (2011). 5 Key Reasons Why New Products Fail. Oxford University Press .
A recent product that was introduced and failed in market was "Dove Real Beauty Bottles”. This product was launched by Dove as a limited edition. The idea behind the product was to acknowledge the fact that beauty comes in all shapes and sizes, there is no perfect shape and beauty break moulds (Visual Fizz, 2017). So the company designed plastic bottles of different shapes to represent the diversity of women body for their body wash. They tried to showcase diverse representations of female bodies through their packaging. But the comparison of women’s figures to abstract, shapeless soap bottles sent the wrong message that result in the failure of the product. They released 7 different shapes unconsciously forcing women to choose the bottle that matched their shape. So instead of reinforcing a strong body image, it ended up increasing self-consciousness and the product failed badly (Steffens , n.d.).
New product fails because of overestimated demand, poor design, poor marketing execution, high development cost, lack of research and development, and strong competitive reaction (Kotler & Keller, 2016). In this particular case, poor design and poor marketing execution were the major reasons for the failure of the product. Instead of empowering, it tried to objectify women by their design. The idea of reflecting women body shape through plastic bottles backfired it. Dove tried to express its passion for beauty that went horribly wrong. Dove, being a corporate project that claims to oppose restrictive feminine beauty standards and promote more democratic vision of beauty tried to replicate its mantra of beauty comes in all shapes through this product that was not received well by the customers (Johnston & Taylor, 2008).
In order to prevent the failure, it could have given more attention on the product rather than the packaging. Being an established brand, people would purchase the product because of its brand name not because of the packaging. Customers should be persuaded to purchase the product by focusing on the details. Instead of making separate product package for each body type, they could promote the product as the body wash as a product that can be used by women who are beautiful in their own way. How people will perceive the advertisement should also be taken into consideration as it is not sure that the audience will receive the message as intended by the marketer. Though Dove had good intention, it was not received well by the customers. Customers’ negative reaction leads to the extinction of the product. So advertisement should be designed considering the possible reactions it may arise.
Johnston, J., & Taylor, J. (2008). Feminist Consumerism and Fat Activists: A Comparative Study of Grassroots Activism and the Dove Real Beauty Campaign. Journal of Women in Culture and Society, 33 (4), 941-966. Retrieved from https://doi.org/10.1086/528849
Kotler, P., & Keller, K. L. (2016). Marketing Management (15th ed.). London: Pearson.
Steffens , R. (n.d.). 10 of the Biggest Marketing Fails of 2017 . Retrieved from Bluleadz: https://www.bluleadz.com/blog/10-of-the-biggest-marketing-fails-of-2017
Visual Fizz. (2017, June 13). Stick a Fork in Them, They’re Done - Biggest Brand Failures of 2017 . Retrieved from Biggest Brand Failures Of 2017 And What You Can Learn From Them: https://www.visualfizz.com/biggest-brand-failures-2017/
GoPro Inc. introduced their most anticipated product GoPro Karma Drone in 2016. For the first time GoPro introduced a product with the camera attached or placed in portable drones. The company was excited and confident about their new product and launched it enthusiastically to compete with other rivals. In reference to their past market per, they are pretty sure to the product that they gone conquer the market again. They marketed and advertised their product extensively with the theme "More than a drone”. In the same way, people were excited about the GoPro’s product diversification meaning for the first time they were launching drones. But just a few days after Karma launch event, DJI released MavicPro. MavicPro realized the integration of innovation in all aspects of fly control, special flight function, product design, battery life, etc… Mavic outgunned Karma by nearly all aspects (Hongjia, 2017).
Figure1: GoPro Karma Drone
As soon as, GoPro Karma Drone hit the market it failed miserably. The marketing and advertising aspect of the company was compelling but the product itself failed to impress the consumers due its lagging performance and functionality. The major reasons for failure are mentioned below:
Lack of experience
They lacked the experience to drone where drone market leader, DJI, has been making drones for years, 2011.
Lack of innovation
Low battery life, much shorter range than its competitors and potential physical threats to people. The Karma and Mavic were both announced at the end of September. But there are so many features that the Mavic has and Karma doesn’t.
Due to poor engineering and designing process the Karma camera drone fell from the sky while flying. There were numerous consumer complaints and grievance that drones got lost in the sky (Levln, 2016).
Kotler & Keller (2016), in their book Marketing Management, the processes of new product development are idea generation, research, idea screening, concept development, market strategy, feasibility analysis, product design, test marketing and finally market entry. GoPro Karma Drone could have been done differently in the new product development process to prevent the failure.
GoPro is known for its innovative invention, this time they failed to capture their essence in Karma drone. Such kind of product previously existed in the market with lot better performance, functionality and specification.
The most important aspect of the new product development is research; here, GoPro could have focused more on research to check the demand and viability of the product.
The company could have simply thrower the idea around and see what people think about it. This would have lead to further inspection and redesign of the product with better input.
The camera and other parts of this flying object were not balanced precisely as per the rule of gravity. So, if they had engineered the drone well then such issue would not have occurred.
Hongjia, X. (2017). Techno-entrepreneur from Emerging Economies: A case of DJI in Global Competition and Innovation. In United States Association for Small Business and Entrepreneurship. Conference Proceedings (p. 1178). United States Association for Small Business and Entrepreneurship.
Kotler, P., & Keller, K. L. (2016). Marketing Management . Boston: Pearson.
Levln, T. (2016). Why did GoPro Karma fail? -Drone market analysis. In wetalkuav . Retrieved from https://www.wetalkuav.com/gopro-karma-fail/
According to Souiden, Kassim and Hong (2006, p. 838), Corporate image affect the consumer’s behavior and perception of a company’s product as qualitative and credible and hence giving the value to their offerings. So, when the product is valued as qualitative, the consumer have tendency to choose the brand most often. But it is debatable whether the corporate image of a product remains same over the period? This loyalty can be observed under two cases as below
Nokia, once a leader in mobile phones, has now shrunk with market sales of 2.58 % in 2015 (Bradley, 2016). As per my knowledge, there had been good times for Nokia as it had a lot of Loyal Customers, who would prefer only Nokia the quality phones but, that corporate image didn’t take long to shift. Nokia shifted from the market leader to 2nd and now at the third position
On the other hand, brands like coca-cola, wai-wai and Samsung are being popular. Coca-cola has extended its market penetrating the rural areas also. Meanwhile Wai-wai has added different flavor of instant noodles and soups to the brand. Samsung also has added different product to its basket, notably note-books and swatch among others.
Torres-Moraga, Vasquez-Parraga and Zamora-Gonza (2008, p. 312) puts forth the idea that loyalty depends on the type of product and there will be its significance with traditional foods and drinks but is significant with innovative products ( mostly autmobiles and electronic). If we analyze the above examples on the basis of this assumption, it make a clear sense that innovation can not be an option for a product that need innovation.
Innovation clearly is a factor that impacs the brand loyalty, but again if we consider the recent awareness in health, environmental protection or similar causes and right activism, they also have caused many to switch to another brand. Indian Yoga guru had a great push on cause of health, yoga and natural food consumption and later when he came up with the basket of consumer products with brand "Patanjal Ayurvedic, that became an instant hit and saw a shift of consumer to its product. Patanjali’s market share is likely to be around 5%, which has just three players until now (Rukhaiyar, 2016). Beside this, his denounciation of chemical products in foods and cold-drinks by Ramdev was also a big shock to the multinationals after which there were high concerns for safe food in India. Recently, India had also banned Maggie for short time with the growing concerned of it containing high MSG and recently Coca-cola also has closed its 3 factories, and it is anticipated to be closed due to declining demand of coke.
Basing on all those examples, I can say that brand loyalty matters until the product gives the maximum value to the consumer. In short run, with limited products and with specialized products, the brand loyalty may be possible but I do not think in the long run, brand loyalty is possible. Consumer are sensitive to change in perception with various changes in the environment. As long as the brand keeps innovating, adjusting to the changes in the business environment and satisfying the consumer’s need, they can be the loyal customer else, there are high chances of customer switching.
Bradley, T. (2016, January 29). Forbes . Retrieved from Windows Phone Can Be Saved If Microsoft Copies The Competition: http://www.forbes.com/sites/tonybradley/2016/01/29/windows-phone-can-be-saved-if-microsoft-copies-the-competition/#24a2c6516981
Rukhaiyar, A. ( 2016, February 3). The Hindu . Retrieved from The Hindu website: http://www.thehindu.com/news/cities/mumbai/business/fastmoving-ayurvedic-goods/article8187124.ece
Torres-Moraga, E., Vasquez-Parraga, A. Z., & Zamora-Gonza, J. (2008). Customer satisfaction and loyalty: start with the product, culminate with the brand. Journal of Consumer Marketing , 25 (5), 302–313.