It was perfect. Customers needed it…R&D developed it…manufacturing produced it, marketing priced it and sales had glossy brochures of it and now it sits in the warehouse … by the hundreds. This product was supposed to fly! Was it the product, the marketing, the price – why had another perfect product failed? Almost every business has a similar story – eagles that can’t fly.
Most businesses operate in fiercely competitive markets with aggressive competitors and often equally aggressive customers that consistently attempt to drive down the value of product offering. Often, the value of new products is compromised early in the launch phase. Well meaning product teams fail to grasp aspects of the market dynamics that can lead to early price pressures and commoditization.
The CEO of AstraZeneca, the UK based pharmaceutical said, “Blockbusters aren’t discovered…they’re built”. One USA based company believes this so much that they insist that the product launch team put their jobs on the line. Also to ensure the company stays innovative they insist that 50% of a business unit’s profits come from products launched in the last five years. A manager of a different company that prides itself on its R&D did an analysis of his company’s product lines. His analysis showed that products launched within the last five years generated less than 5% of his company’s profits. In a technology-based industry with a huge R&D budget it will be hard to justify investments with such a dismal record. Yet this is probably the norm not the exception. Why do most new products fail to live up to their potential – eagles without wings
New and superior products don’t always win in the market place, especially when the value created is not clearly communicated to, understood by or valued by the end user. If there is one common thread that runs through all failed product launches it is a lack of understanding of the market place. This lack of understanding of customer needs, competitive offerings or regulatory changes results in either poor R&D or an ineffective product launch. Poor marketing strategy can have many root causes. Here are a few:
Lack of Vision: (Show them). Without a vision a product will perish. People within the company must believe in the value and customer benefits. If there is no internal belief, success is rare.
Inability – (Teach them). Enthusiasm, although wonderful and needed, cannot make up for lack of skill. Train your people in marketing strategy and ensure their ideas are thoroughly researched.
Complacency: – (Awake them): All of us are guilty of falling into ruts. Curiosity may have killed the cat but complacency murders products. “Care is the secret of good planning. Wars are won by skillful strategy”
Lack of Objectivity – (Smash the mirror): Unchecked exuberance can block objectivity and blind one to the pitfalls that all new products face.
Poor Implementation – (Motivate them): Sales people are also customers who may or may not share your belief in the new product. Market to the sales force as you would to your own customers. Who are their opinion leaders? What incentives should be put in place? What support do they need? If the sales force is unaware, not excited by nor incented to sell a new product, they often won’t.
Lack of Resources: – (Fund it) Product launches on a tight budget rarely work. In the consumer electronics industry there is a four to one ratio. For every dollar of R&D there are four dollars spent in product launch.
Lack of Focus: (Segment) – This is tied to lack of resources. Worldwide rollouts done in one step are difficult and costly. Look at the resources that Microsoft is putting into the new Windows software. Unless you have a spare billion find a beachhead and only move to new markets once the beachhead has been won.
“Marketing is merely a civilized form of warfare in which battles are won with words, ideas and disciplined thinking”. Like any skill, it can be learned and must be practiced to be mastered. Then your product will fly on eagles’ wings.