Failure is Common

Happy Good Friday to everyone out there in Blog Land! On this Good Friday, we are going to talk about products failing, nice way to brighten your day huh?

Last time we brought up the fact that 80% of new product launches fail within the first 3 months.

In 2005, more than 156,000 products debuted in stores globally: one every 3 seconds- 75% of these failed.

Roughly 21,000 new brands are introduced worldwide per year-52% of these will fail.

Let's look back to 2001. A product was generating so much buzz that web-sites were offering that it would transform the

transportation industry. Apple CEO Steve Jobs, stated that cities would be built around it. John Doerr, venture capitalist, predicted $1 billion in sales. A factory in New England prepared to assemble 40,000 units a month, for this product, that didn't even have a name.

In December of 2001, the Segway Personal Transporter (PT for short) was released.

The First three were auctioned off for more than $100,000 a piece. And two years later: only 6,000 Segways had been sold.

You remember new coke?

It actually did well in consumer research, but once it hit the stores, it tanked...big time. Less than three months later, Peter Jennings interrupted regular programming to share the news that Coca-Cola was returning to it's original formula.

If we are going to pick on Coca-Cola, let's pick on Pepsi. In 1992, Crystal Pepsi was released, and I sure you all remember the Val Helen "Right Now" theme song.

Crystal Pepsi tanked so bad that Saturday Night created a spoof, which according to many, is in the top 20 of best SNL commercial spoofs


via videosift.com

One final flop comes from the Video Game world. After the huge success of E.T. the Extra-Terrestrial movie, Atari rushed to produce E.T. the Extra-Terrestrial (video game) for the Atari 2600 video game console in 1982. The game is often cited as of the largest commercial failures in video gaming history, as well as one of the worst video games released. E.T. the video game is often blamed as a contributing factor to Atari's massive losses during 1983 and 1984.

Overproduction, returns and unsold cartridges were buried in a New Mexico landfill.

Marketing professionals sometimes know little more than John Wanamaker did a century ago when he declared: "Half my advertising budget is wasted. Trouble is, I don't know which half"

Products and brands have become like flies, a buzz in the background being continuously batted by consumers.

Next blog we will talk about the solution It is called Neuromarketing. It is the marriage of marketing and science - the window into the human mind. It is helping to reveal why and what advertising messages are remembered and what messages are forgotten.

Top Reasons Why Most Products Are Hanging by a Thread

Throughout this series of blogs we are going to discover the mistakes in marketing strategies that will be the end of the rope of many business. This will be covered in 5 main parts: 1. Advertising matters, 2,. Positioning determines outcomes, 3. There are winders and losers, 4. Consumers say one thing and think another and last 5. The hidden secret - 6D Marketing.

Part I. Advertising Matters

Everyone is fully aware by now that we are in the midst of a horrible recession. Consumers are spending less money, businesses bottom line are being hit and budgets are being cut. Unfortunately the last part of your budget that you should be cutting is the marketing budget.

Let me tell you a story. The milk industry wanted to cut cost during the early 1990's, so they pulled their ads. Sales went unchanged for 12 months and then..at an alarming rate, sales began plummeting. Millions were lost and it took 18 months to rebound!

So, what happen you ask? The Milk industry failed to realize the power of advertising. What is the power of advertising? It strengthens the consumer confidence. Consumers want to feel safe, and a company who is advertising must be doing well right? That might not always be the case, but it is with the consumers. Take for example: You are wanting to finish your basement and need to hire a company. One of the first places that you will head is the Internet and do a Google search. If the company has not put money into a nice website, you will scroll on past it. If you recognize a companies name from a direct mail piece, TV, radio, or another print advertisement, you will immediate gravitate towards that company. Why? You feel safe. You rationalize that they have a nice website, they are advertising, they must be doing okay, even during this recession. Companies that increase their advertising budgets during tough economic times will come out better after the economy picks back up.

What is the Challenge?

Whether retailers are located in the top ten or struggling to stay alive: The one thing we know is ...The Challenge of engaging the consumer will continually increase!

Positioning your company will determine success. In a survey of senior executives across the world: 49% agreed that brand consistency is becoming extremely difficult to achieve. However: 81% understand a recognizable corporate brand is critical for success and 64% believe the same about their product brands.

Unfortunately, there are Winners and Losers.

Winners include: Wal-Mart, Home Depot, Sears, Kroger and Costco. Over the past 10 years, these retail giants have remained on the "Top 100" list!

Some who have lost out: Linen & Things, Eddie Bauer, Circuit City and Mervyns.

Next time we will discuss how 80% of new product launches fail within the first 3 months!

-www.ad-oasis.com