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  • Writer's pictureKristin Harper

Why 90 Percent of New Products Fail & 6 Steps to Increase the Odds of Success


Picture of Nokia's N-Gage, a handheld gaming console
Image Source: Wikipedia

In the fast-moving world of business, launching a new product is as exhilarating as it is risky. The potential for revenue growth and market expansion can be vast, but so too is the potential for failure. While most of us are familiar with stories of game-changing successes like the iPhone or Netflix, we don't often hear about the myriad of products that quietly fade from memory.


According to several business publications, a staggering 85-95% of new products fail within the first two years of being introduced. So, why does this pattern of failure persist? And, more importantly, how can we increase the odds of innovative products and services not just surviving, but thriving?


In this blog, we’ll delve into the root causes of new product failure, explore real-world examples of such failures, and provide a comprehensive five-step process for businesses aiming to successfully innovate and launch new products.


The Graveyard of Good Intentions: Real-World Examples of New Product Failures

For businesses, innovating new products is akin to exploring uncharted territories. There are no guarantees of success, but the rewards can be substantial. Let's take a look at several products that failed to gain traction in the market and dissect where things went wrong.


Case Study 1: The Nokia N-Gage

In the mid-2000s, Nokia's N-Gage was an ambitious attempt to integrate a handheld gaming console with a mobile phone, ahead of its time by today's standards. But it faced design flaws, including a cumbersome process for voice calls, and an awkward, taco-shaped design which made it impractical for everyday use as a phone or a gaming device.


Case Study 2: Google Glass

Launched with much fanfare, Google Glass promised to revolutionize the way we interact with technology. However, concerns over privacy, a steep price point, and a lack of clear practical application for the average consumer, stymied widespread adoption.


Case Study 3: Cosmopolitan Yogurt

After a successful launch, a split-packaging design introduced to differentiate flavors led to consumer confusion and declining sales. It’s a reminder that even small packaging changes can have major impacts.


Case Study 4: Juicero

Juicero was a startup that aimed to revolutionize home juicing with its high-tech juicer and proprietary juice packets. Despite securing significant investments and creating buzz in the health and tech communities, the product failed spectacularly. The Juicero machine was prohibitively expensive, and the revelation that the juice packets could be squeezed by hand made the device seem unnecessary. Consumers balked at the price and perceived lack of value, quickly leading to the company's demise. This case study is a stark reminder of the need for market research and understanding consumer behavior before launching a product.


Learning from the Legends

While these products may have disappeared from the shelves, many products have withstood the test of time and evolved into industry bellwethers. For instance, the iPhone revolutionized personal communication, challenging the status quo and setting new standards for usability and design.


What separates successes like the iPhone from the failures?


The 6 Essential Steps to Product Launch Success

After examining real-world examples, it becomes clear that product failure is often avoidable. By implementing a structured approach to innovation and launch, companies can significantly increase their chances of success. 


Here are six essential steps to turn your product launch into a story of triumph.


Step 1: Analyze the Market

Before launching any new product, it's essential to understand the market and the needs of your customers. Market analysis involves:


  • Identifying the unmet needs in the market

  • Ensuring the product offers unique value or is significantly better than current offerings

  • Understanding the competitive landscape

To illustrate the importance of market analysis, let's consider the failure of the Segway. Launched with much hype, it failed to meet market needs as it was positioned as a personal transportation device when it should have been marketed as an industrial tool for fulfillment centers and warehouses.


Understanding that the original consumer-focused strategy was not resonating, Segway adjusted its business approach to target niche commercial markets. This strategic pivot involved:


  • Partnering with businesses that could utilize the Segway as an operational tool, such as tour companies, law enforcement agencies, and corporate campuses

  • Redesigning the product for durability and convenience in commercial settings

  • Developing new models such as the Segway i2 SE and x2 SE that catered to the specific needs of these professional environments

By reassessing their product's placement, Segway found a new customer base that valued the efficiency and agility the device offered in high-mobility work environments. This pivot not only saved the Segway from being another casualty of innovation but also established it as a mainstay in sectors where its utility is unparalleled, demonstrating the critical nature of flexibility and responsiveness in product strategy.


A clear bottle of soda with the words Crystal Pepsi on the label
Image Source: PepsiCo

Step 2: Conduct Thorough Market Research

The role of effective market research cannot be overstated when preparing for a product launch. It’s a process that digs deeper into potential customer behaviors, preferences, and trends. Conducting robust market research involves several key areas:


  • Gathering data through surveys, interviews, focus groups, and consumer testing to get a clearer picture of customer demands and expectations

  • Analyzing competitor products and identifying any gaps in the market that your product could fill

  • Assessing the potential for market growth and the overall sustainability of the product niche

  • Determining optimal pricing strategies by evaluating what customers are willing to pay and what the market can bear

The tale of Crystal Pepsi stands as a cautionary example where market research might have foretold a different outcome. Launched in the early 1990s, Crystal Pepsi's clear cola was based on the 'purity' trend but failed to connect with consumers' taste expectations for a cola product. Extensive market research could have revealed these consumer insights earlier, perhaps steering the product toward a niche market or preventing a costly flop.



Step 3: Write, Test and Validate a Solid Product Concept

Validating a solid product concept through market research serves as the foundation for successful product development. This involves:


  • Clear articulation of the product's features, benefits, and value proposition to the customer

  • Defining the target market and the potential user personas

  • Ensuring that the product can be manufactured at a cost that allows for a competitive price

A prime example of a solid product concept is the Nest Thermostat. It perfectly blends form and function, boasting energy-saving benefits and an intuitive user experience—not to mention a sales model designed around user data analytics.

A hand adjusts a digital thermostat that indicates the temperature is at 78 and is cooling to 75
Image Source: Amazon

The Nest Thermostat's success as a product concept lies in its focus on customer needs and seamless integration of technology into everyday life. Its learning ability to adapt to the user's schedule, temperature preferences, and even the weather, provides real, tangible benefits like reducing energy consumption and lowering utility bills. 


As a 'smart' device, it connects with other home automation systems and can be controlled remotely via smartphone apps, making it incredibly user-friendly. Moreover, its sleek, minimalist design not only complements modern home aesthetics but also simplifies user interaction, effectively removing the complexity often associated with programmable thermostats. By addressing functionality, ease of use, and energy efficiency, the Nest Thermostat epitomizes a product concept that prioritizes user experience while delivering on its promise of innovation and sustainability.


Step 4: Test and Iterate Prototypswiffes

The testing and iteration phase is crucial for refining the product and ensuring it meets customer needs. This step involves:


  • Seeking feedback from potential users and stakeholders through consumer research and usage tests

  • Making adjustments to the design, features, or functionality based on the feedback

  • Engaging in rapid prototyping to test and verify the product concept

A company that has successfully employed this step is Procter & Gamble. They frequently test new products and concepts through ethnography to gain real-world insights and tweak their approach accordingly.


One notable example of Procter & Gamble using the test and iterate strategy is with their Swiffer product line. Initially introduced as a new cleaning system, P&G rigorously tested the Swiffer's unique disposable cloth concept with consumers, gathering their feedback on the product's efficacy and usability. The insights obtained from this real-world testing led to several iterations of the product, including the development of wet cleaning cloths and the Swiffer WetJet, which further satisfied the customers' desire for quick, easy, and thorough cleaning solutions. By continuously iterating on the design to better meet consumer needs, Swiffer has become a household name synonymous with convenient and effective cleaning.


Three products to clean the floor: one with a yellow brush, one with a green handle and one with a purple handle. The name Swiffer is also shown.
Image Source: Swiffer

Step 5: Implement Strong Marketing and Sales Strategies

Even the best product can fail without strong marketing and sales strategies. The key aspects of this step include:


  • Creating a marketing message that resonates with the target audience

  • Developing a comprehensive go-to-market plan

  • Training sales teams to effectively communicate the product's value


A stellar example of strategic marketing and sales execution is the launch of Airbnb's Experiences. They created a new category and built demand through compelling storytelling, influencer engagement, and community-driven marketing.


Airbnb's Experiences platform extended its reach beyond accommodations by providing travelers with unique activities hosted by locals. To market these experiences, Airbnb capitalized on user-generated content and real-life stories, which showcased the authenticity and diversity of the activities available. Furthermore, they utilized targeted email campaigns that highlighted attractive experiences based on the user's previous searches and bookings, which increased personalization.


They also employed an influencer marketing strategy, engaging with travel bloggers and social media influencers to share their personal experiences with Airbnb Experiences. This created aspirational content that resonated with the audience's desire for adventure and cultural immersion. Moreover, Airbnb's marketing campaigns focused on the emotional aspect of travel, emphasizing the connections and memories that could be made through their offerings.


Lastly, Airbnb took advantage of content marketing strategies by creating travel guides and articles that provided users with insights into various destinations, subtly promoting their experiences within this content. This not only served as a resource for travelers but also improved their SEO, driving organic traffic to the site.


By combining these marketing strategies with a robust digital platform and a community-centric approach, Airbnb successfully communicated the value proposition of Experiences, resulting in a significant expansion of their brand and services.


Step 6: Monitor Performance and Adapt

Once a new product or service is launched, it's not time to sit back. Continuous monitoring and adaptation are necessary to:


  • Collect and analyze performance data

  • Address any unforeseen issues

  • Adapt the product or the marketing approach to changing market conditions

One product that has done this exceptionally well is Amazon Echo. They have consistently updated the device's software and features, ensuring it remains relevant and valuable to customers.


The Amazon Echo's trajectory showcases the company's commitment to evolution and customer satisfaction. Through a combination of software updates, hardware revisions, and expanded skill sets, the Echo has retained its position as a leader in the smart home market. Noteworthy developments include the incorporation of new languages, enabling broader global accessibility, and the integration of machine learning capabilities to enhance its voice recognition and personalization.


Regular software updates have allowed the Echo to support a proliferating number of third-party skills, ensuring that it can perform a wide variety of tasks and integrate with an ever-growing ecosystem of smart home devices. Amazon has also released newer versions of the Echo with improved sound quality, aesthetically pleasing designs, and adaptive features like the Echo Show's display screen, which provide visual accompaniments to voice commands. Complementing these hardware upgrades, Amazon has been proactive in forging partnerships with other companies, further extending the Echo's functionality.


These iterative improvements are a testament to Amazon's approach to product innovation. They continually solicit customer feedback and rigorously analyze user interaction data to inform their updates. This data-driven strategy ensures that the Amazon Echo not only meets the current needs of consumers but is also well-positioned to adapt to future demands and technological advances.


New Products That Stand the Test of Time

While failures can be instructive, it's equally valuable to examine products that have thrived in the market for an extended period. Let's highlight some products that showcase long-term success and what the companies did right.


Example 1: Electric Cars

The electric car market has seen a surge in success with companies like Tesla leading the charge. Their focus on cutting-edge technology, strong branding, and environmental benefits has resonated with consumers.


Example 2: Streaming Services

The advent of streaming services like Netflix has forever changed the way we consume media. By recognizing the shift towards digital and offering a superior user experience, they've formed a new media landscape.


Example 3: Health Tracking Devices

Wearable health tracking devices like Fitbit have become ubiquitous. By tapping into the growing consumer trend of proactive health management, they've secured a place in the market for the long term.


Example 4: Smartphones

One of the most profound examples of a consumer product that has stood the test of time is the smartphone. Since Apple introduced the iPhone in 2007, the smartphone has become an indispensable part of daily life for billions of people worldwide. Manufacturers like Apple and Samsung have continued to innovate, adding features like high-resolution cameras, fingerprint sensors, and facial recognition technology, while also integrating a continuously growing ecosystem of apps and services. Consequently, smartphones have remained relevant by constantly evolving, becoming more powerful, and replacing a multitude of standalone devices, such as cameras, GPS units, and music players. They cater to a wide range of consumer needs, from communication and entertainment to health monitoring and smart home control, ensuring their long-term place in the market.


Example 5: Scented Candles

Another classic example of a consumer product that has endured the changing tides of the market is the scented candle. Brands like Yankee Candle have capitalized on the multi-sensory appeal of these products, combining craftsmanship with a wide variety of fragrances to match every mood and season. These candles not only add warmth and ambiance to a home but also provide an avenue for personal expression through scent. As a result, scented candles have managed to maintain their position as a beloved item in households across the globe, becoming synonymous with comfort, self-care, and interior decor. Despite the advent of electric lighting and air fresheners, the nostalgia and traditional appeal of scented candles have allowed them to persist as a staple within consumer packaged goods.


Conclusion: Innovate or Fail—The Choice Is Yours

The expanse of failed products serves as a cautionary tale, reminding us that launching a new product without careful planning and understanding the customer's needs can lead to disaster. However, by learning from these examples and strategically building innovative steps into our new product launch process, we not only mitigate the risks but increase the potential for growth and success.


The five-step methodology outlined in this blog, if implemented effectively, can serve as a robust framework from which to launch products that endure and make a meaningful impact.

In the end, it's clear that the path to product launch success is not about avoiding risk altogether—it's about increasing our understanding of risk and reward. And by doing so, we can turn the odds in our favor and create products that resonate with customers for years to come.


If you’re looking for a market research partner with proven innovation experience, contact our team at Driven to Succeed


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Driven to Succeed is an award-winning market research and consulting firm that connects the dots to unleash growth for mid-market companies and Fortune 500 brands. We are powered by a team with multiple zones of genius who use empathy, intuition and insights to help brands grow, and people thrive. Our expertise includes research, analytics, brand management, and marketing in Consumer Packaged Goods, Healthcare Biopharma, Food & Beverage, Financial Services and beyond. Learn more at https://www.DriventoSucceedLLC.com.

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