5 Product Launch Failures We Can Learn From

No company has ever attained prominence in the financial world without battling challenges and failures throughout its journey - some even to the point of bankruptcy.

Ask any financially literate person what Google, Apple, and Pepsico share in common, and you will get a diverse but somewhat similar answer. Besides being the biggest franchises on the planet, they’ve all filed for bankruptcy at some point in their history.

As a matter of fact, their success is so remarkable and widely celebrated that it overshadows the bleak moments in their past. Companies, often global household names, are responsible for some of the most flop product launches.

“Learn from others’ mistakes” is a widely noted quote and is certainly true when launching a new product. Knowing others' shortcomings, actions that brought about their downfall, and learning strategies that got them en route to success. We have profiled five product launch failures with hard-worn lessons to guide you to execute your launch successfully.

Microsoft Zune

To keep up with the towering dominance of the Apple iPod and capitalize on the MP3 craze in the early 2000s, many tech companies were desperate to introduce their version of a music player.  Zune was Microsoft’s attempt to tap into iPod’s triumph and booming market share, which failed tremendously.

After all, Microsoft is just as big and iconic as Apple, if not more established. So what made the iPod synonymous with the term ‘music player’ while Zune remained a blight on Microsoft’s reputation?

Reasons for Failure

By the time of its release, Zune had several unique components to the iPod, especially the feature that allowed people to share songs wirelessly. However, things didn’t go exactly as planned. Here are three reasons why:

Bad Timing

By the time Zune entered the market in 2006, iPod had already been around for five years, iPod Mini had reached second-generation and touch screens were just around the corner.

Meanwhile, Zune was half-a-decade late to the industry, with its technology equivalent to iPod from 2001. In the five years of successive launches, Apple had built a loyal customer base that was least likely to shift to an alternative.

Poor Design Innovation

While Microsoft aimed to rival Apple’s monopoly in the sector, critics at that time believed it had missed the opportunity. The odd size, unattractive brown color, and lack of design aesthetics failed to compete with the current-gen iPod, which looked more futuristic.

Ineffective Marketing Strategies

Since its arrival, Zune failed to establish itself as a dependable consumer entity, apart from iPod. As the former Microsoft executive said, “Our marketing strategy was very confused and too narrowly focused.” The marketing did create artsy ads to entice new users, but it never managed to compel the audience to why they must shift to Zune instead of the iPod.

Lessons Learned

• Analyze the competition: Zune failed to stand out in an iPod-dominated market. Marketers should conduct a competitor analysis to identify what makes their product unique and ways to project it to the audience.
• Focus on innovation: As an entrepreneur, prioritize product innovation and take necessary steps to develop unique features that set your product apart.
• Develop an effective marketing strategy: Plan a product launch checklist that includes product positioning, branding, advertising, and promotion that aligns with the audience's preferences and interests.

Google Glass

In 2010, Sebastian Thrun initiated a groundbreaking project under Google X named “Moonshots.” The project aimed to create smart glasses allowing users to capture images and scan the internet for information at a glance.

Google Glass was a bold leap into the future, way ahead of its time. The concept was utterly brilliant, and soon the hype followed. The company massively capitalized on the hype and hope without actually turning it into reality. As Google erased all social media channels dedicated to Google Glass, it was evident the smart specs couldn’t stand its expectation.

Reasons for Failure

Here are four reasons why Google Glass - a seemingly revolutionary product ended up being a miserable failure.

Health and Safety Concerns

While the idea caused a stir in the general public, experts were concerned about safety concerns. Wearing a gadget that would constantly release harmful carcinogenic radiation could cause serious health issues. Even if that were sorted, the built-in camera was an indirect threat to others’ privacy.

Poor Design Aesthetics

The concept of smart specs only sounded awesome to the point of fiction; the reality was the complete opposite. Unlike their general perception, Google Glass looked awkward and unattractive. In fact, many thought that the product was still a prototype.

Lack of Progress in Development

While the announcement for the futuristic specs came in early, the product team had a hard time shaping it into reality. Google Glass barely had any progress in terms of development two years after its release. Although it was advertised at mainstream fashion events, many were still unsure if it was the finished version or a prototype.

No Clear Functionality

The key principle behind every product launch is to address a need or fulfill market demand. In the case of Google Glass, the product launch merely focused on the futuristic concept with zero practicality.

Lessons Learned

Pricing Strategy

One of the main reasons for Google Glass' failure was its high price point. The product was priced at $1,500, making it unaffordable for most consumers. Businesses should ensure their pricing strategy aligns with their target market's expectations and purchasing power.

User Privacy

Another issue that contributed to Google Glass’ failure was the built-in camera which sparked fears of the invasion of privacy and legal concerns. Prioritize user privacy and security when designing new products to avoid legal and ethical issues that could lead to product failure.

Market Research

Google Glass was marketed as a fashionable product that could appeal to different customer segments but lacked a target audience. Companies should conduct in-depth market research to identify customer needs, preferences, and behavior to develop products that meet their expectations.

New Coke

Call it daring or insane, but Coca Cola took arguably one of the greatest risks in the beverage industry - announcing it was discontinuing its signature drink in exchange for a different recipe. The rebranding heroic turned out to be one of the most disastrous failures and a lesson for businesses to come.

The business endeavor was marked in response to Pepsi’s continuous dominance in the market share in the 1970s and early 1980s. So, in 1985, Coca-Cola’s CEO introduced the new formula, declaring it “smoother, rounder, yet bolder - a more harmonious flavor” labeled as the New Coke.

Even though the company invested heavily in marketing, conducted taste tests, and partnered with celebrities like Bill Cosby and Paula Abdul, the new Coke failed to entice the broader audience.

Reasons for Failure

Consumers were quick to reject the new formula, and sales plummeted. The company faced backlash from angry customers who felt betrayed by the removal of the original Coke from store shelves. Here are three reasons why the product launch turned into a disaster:

Lack of Consumer Demand

Coca-Cola had not conducted enough market research to understand the preferences and loyalty of its customer base. The company underestimated people's emotional connection with the original Coke, and the announcement of its discontinuation only served to amplify the backlash.

Flawed Marketing Campaign

The company had conducted taste tests that showed people preferred the taste of New Coke to Pepsi and the original Coke. Still, it had not taken into account the emotional sentiment people had toward the original formula. The commercials featuring celebrities failed to gain traction in the audience, who saw them as disingenuous and out of touch.

Bad Timing

Coca-Cola introduced its new offering at a time when health and wellness were a growing trend, with consumers becoming more health-conscious than ever. New Coke was seen as a sweeter and less healthy alternative to the original formula, further contributing to its unpopularity.

Lessons Learned

• Understanding Customer Loyalty: New Coke failed because Coca-Cola underestimated customers' emotional connection with the original formula. Companies must consider the loyalty of their customers when introducing a new product or making changes to an existing one.
• Extensive Market Research: The launch of New Coke was based on taste tests that showed people preferred the new formula to the original and to Pepsi but failed to assess the user response. Extensive market research is vital to gather insights into customer preferences, behavior and needs to avoid launching products that miss the mark.
• Finding the Appropriate Timing: In the age of health consciousness, New Coke was seen as a sweeter and less healthy alternative to the original formula, further contributing to its unpopularity. Every brand must view the existing social trends when developing new products to execute a flawless launch.

Galaxy Note 7

After much anticipation, Samsung launched the Galaxy Note 7 - successor to the widely acknowledged Note 5. With its sleek designs, beveled edges, and large display, the new version was hyped to be the most advanced smartphone to date, but things took an unexpected turn into an abyss.

Within weeks of its release, reports of the device exploding and catching fire began to emerge. In less than 24 hours after halting global sales of the new smartphone, Samsung cut off their production lines.

The company ordered a recall of all Galaxy Note 7 devices and a significant blow to Samsung's reputation. The news was followed by Samsung’s plummeting market shares, losing $14.3 billion within weeks.

Reasons for Failure

What was expected to be a breakthrough in smartphone technology went down to be the worst ever. So, what went wrong?

Rushed Launch

In an attempt to beat Apple's iPhone 7 launch and limit it from gaining excessive market share, Samsung rushed the Galaxy Note 7 release. This led to the company cutting corners in production, resulting in a flawed design that was prone to overheating and catching fire.

Reluctance to Admit Failure

Whether it was the failure to address the issue too swiftly or an act to downplay the reports of exploding mobile phones, the company insisted the problem wasn’t as widespread - until things got out of hand. Inadequacy of admitting their fault cost Samsung billions of dollars and a dwindling brand reputation.

Lack of Communication and Transparency

Samsung initially offered customers a replacement Galaxy Note 7, but these devices were also found to have the same problem. Not only did it cause frustration and anger among customers, it led them to believe Samsung was not taking their safety seriously. The lack of transparency about the issue and the company's response also added to the confusion and mistrust in the audience.

Lessons Learned

• Safety Compliance: When it comes to product launches, it's essential to prioritize safety above everything else. Rushing a product launch or overlooking safety concerns can lead to disastrous consequences, as we saw in the case of the Galaxy Note 7.
• Crisis Management: The Galaxy Note 7 crisis highlighted the importance of crisis management for businesses. When a crisis strikes, it's critical to act quickly, communicate transparently, and take responsibility for the issue.
• Reputation Management: The Galaxy Note 7 debacle severely damaged Samsung's reputation, which took significant time and effort to rebuild. New businesses must set up a strategy to manage their reputation and take dire steps to protect their brand image.

Nintendo Wii U

Ineffective product design and flawed marketing strategies can bring about the downfall of even the most respected franchises - like the Nintendo Wii U case. Months after its launch, Nintendo ceased the production of their much-awaited Wii U console - the follow-up device to the already prosperous Wii U.

Despite being marketed as the mediator between traditional console gaming and modern smartphone-based gaming, it was nothing but a commercial failure for Nintendo. The company sold only 13.5 million units over its lifetime, compared to the wildly successful Nintendo Wii, which sold over 100 million units.

Reasons for Product Flop

Let’s identify the primary reasons that brought one of the oldest video game companies to an eminent product launch failure:

No Value Proposition

Nintendo failed to effectively communicate the value proposition of the Wii U to consumers. Many gamers were confused about whether it was an upgrade to the original Wii and, if so, what made it distinctive. This led to a lack of interest in the audience for the new product, resulting in poor sales.

Minimal Third-Party Support

Unlike its competitors, such as the PlayStation 4 and Xbox One, the Wii U did not have a robust library of third-party games. This limited the console's appeal to gamers, who were left with a limited selection of games to choose from.

Inefficient Product Design

To many veteran gamers, the Nintendo Wii U had a somewhat perplexing gamepad and confusing controllers. Many found it underpowered to Xbox 360 and PlayStation 3 when running graphic-intensive gameplays. Most importantly, the Wii U lacked an internal storage hard drive and mainly relied on flash memory.

Confused Ad Campaign

From the beginning, Nintendo failed to identify its target audience. The marketers attempted to appeal to casual and hardcore gamers, resulting in a lack of focus in its marketing efforts. This made it difficult for consumers to understand what the Wii U was about and who it was meant for.

Lessons Learned

The Wii U is a cautionary tale for businesses looking to launch a new product. It highlights the importance of effective communication, a robust library of games, and a clear and focused marketing strategy that appeals to the audience.

Why Do Most Product Launches Fail?

In today’s hyper-competitive market space, businesses struggle to keep up with the intransigence of consumer shopping habits while proposing better offerings than their rival brands.

Around 75% of newly launched consumer goods and retail products fail to earn $7.5 million in profits during their first year. Customers are inclined to shop for the same items they repeatedly spend money on instead of exploring upcoming products.

A significant portion of product launch failures occurs due to a lack of product validation from the respective audience and inefficiency in complying with the existing social trends. Understanding and meeting consumer sentiment and preference is critical to every successful product launch example. Other essential reasons include

Lack of market research: Many companies fail to conduct proper research to determine whether there is a demand for the product they're about to offer. Consequently, businesses get caught up in situations where the product does not meet the audience’s demands, resulting in poor sales.

Lack of differentiation: Businesses must ensure their product stands out, offering something unique that consumers cannot get elsewhere. If a product is not sufficiently differentiated, consumers may opt for a similar product from a competitor.

Poor execution: Even if a product is well-designed and meets consumer needs, poor execution can undermine its success. Poor timing, a lack of resources, and ineffective marketing can all contribute to a product's failure.

Key Learnings from a Product Launch Failure

Launching a successful product requires careful planning and execution. Understanding the causes of a product launch failure is critical to avoiding these pitfalls and setting your product up for success.

Innovation and Differentiation

In today's dynamic ecosystem, innovation, and differentiation are crucial for any product to prosper and earn profits. Businesses must find ways to set their product apart from the competition by offering something new and exciting.

Direct your product management team to develop new features using cutting-edge technology or offering unique benefits. By creating a unique selling proposition, businesses can capture the attention of potential customers and increase the chances of a successful launch.

Knowledge of the Target Market

Understanding the target market is essential for any business endeavor. This means conducting thorough market research to identify the needs, preferences, and buying behavior of the respective audience.

By doing so, businesses can tailor their product to meet the specific needs of their customers. Adopting a consumer-centric approach involves adjusting the product features, pricing strategy, or marketing messaging to appeal to the audience’s preferences.

Effective Marketing Strategies

Even the best products can fail if they aren't marketed effectively. Businesses must have a solid marketing plan to ensure their product reaches the desired customer base. From selecting the proper channels to reach potential customers to developing compelling messaging and creative assets, demand detailed planning and research. By leveraging the latest marketing trends and techniques, businesses can maximize their reach and increase the chances of a successful launch.

Conclusion

Whether it’s failing to understand the consumer sentiment in the market, conducting beta tests before the official release, or developing the value proposition, these five failed product launches have one thing in common - lack of preparation.

More than 90% of product launches fail every year, and even the most established companies are sometimes destined for failure. Approaching your upcoming product launch the wrong way may risk your brand reputation and safety.

By Conducting extensive market research and implementing the proper pre-launch marketing practices, you can turn the odds in your favor. In case the launch feels too massive an undertaking, hire Prefinery.com and streamline your every product launch.

FAQs

What are the common reasons product launches fail?

Most product launches fail due to a lack of innovation or differentiation from competitors, a poor understanding of the target market, ineffective marketing strategies, and a failure to adapt to changing market conditions and trends.

How important is market research in preparing for a product launch?

Market research is a critical component of a product launch plan. It helps businesses identify the needs and preferences of their target audience, understand the competitive landscape they are aiming to enter and develop a product that meets the specific needs of their customers.