It happens again and again, and not so rarely, that companies spend a lot of money to launch their latest idea or product on the market and are then completely surprised that instead of the planned exuberant popping of champagne corks, there are long faces and sudden disillusionment. Because the brilliant idea, the double whammy of the industry, the whirlwind in the market segment has unexpectedly turned out to be a lukewarm breeze. Here we would like to present a few examples from the industry and shed light on why the products flopped and what you should critically consider when launching a product before cheering yourself on in spirit.
The flops
Frito Lays fat-free WOW-Chips
© Snacks Wiki
In the 1990s, according to businessinsider.de (2020), the American chip manufacturer Frito Lay launched several types of chips on the market under the name "WOW". They all had one thing in common: they were completely fat-free thanks to the addition of olestra, which provided the same taste experience as normal fatty chips, but passed through the intestines completely undigested due to its molecular size. The big "WOW" then came to the consumer after cramps and diarrhea on the toilet. If you have set yourself the goal of conquering a market that depends on the goodwill of paying customers, you should avoid alienating them with underhanded laxative attacks.
Sony‘s DAT-Recorder
© Camarossaudio.com
Sony's DAT recorder is a completely different example of why a product can fail on the market that, despite its excellent quality and elegant and robust design, only found buyers among enthusiasts and specialist users. This device had seen the light of day in the late 1980s and was intended to replace the prevailing professional recording technology from UHER Record. The DAT (Digital Audio Tape) cassettes allowed recordings in the highest digital audio quality of up to 6 hours at a time - without interruption. Unfortunately, the price of this recorder was so high that by the 1990s it could only be found in research laboratories and among enthusiasts. The attempt to conquer the market at the end of the 1990s with a smaller and cheaper device failed again with the DAT-Walkman.
Microsoft Windows Vista
© Windows
Windows Vista is a typical example of what happens when you have a very successful, stable product on the market (Windows XP) that is loved by users and then modernize it, make it more stylish, "just update it quickly". Vista, however, was a typical Microsoft rush job in which the buying public was once again misused as free beta testers. The high RAM and hard disk space requirements as well as the high power consumption were rightly criticized. But while most users would have put up with this, Vista was also characterized by many bugs, such as missing drivers, which led to many blue screens and software incompatibilities. Vista was a very unpopular failure that quickly gave way to Windows 7, perhaps Microsoft's most popular operating system to date.
Samsung Galaxy Note 7
© Samsung
This new smartphone from Samsung was a real "burner" in the truest sense of the word. Just a few weeks after the smartphone was released in 2016, production of the device was discontinued due to technical defects and the devices that had already been sold were recalled. A production error caused both severe overheating and explosions of the inserted batteries. This hot surprise did not go down well with airlines in particular and, according to FAZ.net (2016), several airlines, including Lufthansa, banned the Galaxy Note 7 on all their flights. As some replacement models with new batteries also exploded, the fate of the Galaxy Note 7 was sealed very quickly, as the companies AT&T and T-Mobile US refused to sell the device any further (Spiegel online, 2016).
„Tempo“ as toilet paper
© SCA
It's not just technical achievements that cause product flops. There are also plenty of large-scale blunders in the analog sector. The Swedish paper company SCA thought that what's good for the nose can't be bad for the butt...at least in terms of the name and launched the "Tempo" toilet paper on the market. However, especially in German-speaking countries (DACH region), the term "Tempo" stands for soft snow wipes - but only for that. SCA tried for 5 years to sell Tempos unsuccessfully as toilet paper until they came to their senses in 2014, took the product off the market and have been selling it under their other strong brand "Zewa" ever since (Pocket-Lint.com, 2022). Even the well-known slogan could have been adopted here: "Zewa - wipe and go!"
The analysis
Why do products flop? What goes wrong during the launch and why do large corporations allow themselves such multi-million dollar flops?
Very often, the biggest mistakes are self-belief and time pressure. Even if a product dominates the market, this does not automatically mean that a brand extension will succeed, i.e. the "Tempo" brand will automatically work as toilet paper, because customers obviously do not associate the properties "soft and stable" with the product, but rather the target, namely the nose and not the backside. Extensive questioning and testing could have reflected the result in advance and the company could have immediately switched to the alternative solution. The same can also be said for the WOW chips from Frito Lay. Extensive testing would have revealed the weaknesses and the product would have remained in the production halls. Samsung has obviously also refrained from extensive stress tests, which push new products to their limits, because the error with the exploding batteries would otherwise have been noticed immediately. It was most likely a management decision that created time pressure and reduced the necessary quality controls, as the company does not want to lose touch in the competitive cell phone market and continue to stand up to its competitor Apple. But there's a price to pay if you shorten the checklist. Speaking of time! With its DAT recorder, Sony created a niche product unsuitable for the masses due to its high price, which only reached enthusiasts and specialist users. Unfortunately, the devices were also prone to loss of quality during playback and had to be serviced regularly. The development and distribution costs of the DAT recorder should have been estimated at the development stage. Subsequent, extensive market studies would then have identified the customers who would be prepared to pay the introductory price of the device. Of course, such studies are not 100% reliable, but they are indicative and can give management clues as to whether development and production really make sense. Microsoft's problem with PC operating systems, however, is of a completely different nature and has nothing to do with the launch price, poor marketing or time pressure. The only reason why this company repeatedly launches immature operating systems on the market (e.g. Win 95, Win Me, Win Vista, Win 8) and annoys so many customers is its dominant market position.
© Diego Cervo / iStock
Microsoft does it because Microsoft can! Only very few companies can afford this luxury and it is also questionable when a company occupies such a dominant market position worldwide with its product.
But how do you avoid flops? You can't avoid them completely, because customers and their purchasing behavior are not completely predictable. You can minimize the risk, but you can never completely rule it out. Detailed market analyses and tests should already be carried out during product development, i.e. during the process from the idea to the product, and should be renewed and repeated in greater detail before the product launch. Next, marketing as a launch factor plays a decisive role. If the analyses of customer behavior are missing or outdated and customer behavior has changed in the meantime, then a flop is inevitable. In addition to taste and compatibility, quality and maturity, marketing and timing, the launch price also plays a key role, as it determines how aggressively the company wants to position itself on the market and which potential customers are targeted.
© Gearstd / iStock
Summary
In summary, if you want to successfully innovate off-market, you should avoid tedious market analyses, avoid stress tests with your products and never listen to potential customers. Elaborate quality controls should also be avoided as far as possible, otherwise production errors or flavor aberrations could be detected in good time. Another clever strategy is to always keep the price of your product above the customer's pain threshold in order to minimize the amount of work involved in logistical processes such as delivery. This strategy can also be supported by a disastrous marketing campaign in which 2-3 marginalized groups are offended and the product is destined to become a huge flop!