10 Reasons Why New Products & Services

Fail
Why do fewer than 10% of all new products/services produce enough
return on the company's investment to survive past the third year?

Here's our top 10 list of reasons new products and services fail:

1. Marketers assess the marketing climate inadequately.

2. The wrong group is targeted.

3. A weak positioning strategy is used.

4. A less-than-optimal "configuration" of product or service

attributes and benefits is selected.

5. A questionable pricing strategy is implemented.

6. The advertising campaign generates an insufficient level of new

product/new service awareness.

7. Cannibalization depresses corporate profits.

8. Over-optimism about the marketing plan leads to a forecast that

cannot be sustained in the real world.

9. The marketing plan for the new product or service is not well
implemented in the real world.

10. The marketer believes that the new product and its marketing
plan has died and cannot be revived, when, in fact there is the
potential for resurrection.

What can marketers do to improve the likelihood of new product

success in an age of promotion and unprecedented competitive
response? Testing the product before launch is one solution.

Typically, if a company decides to do a test market before launching

the product, managers run a test market. Traditional test markets are
fraught with problems, starting with how companies select them—
often because they are easy to manage rather than because they
represent the actual markets a company wants to reach. Traditional
test markets are expensive and competitors can steal ideas and
sabotage results.
A well-done simulated test market, on the other hand, reduces the
risks of launching a flop by collecting data a company needs to
forecast the likelihood of success, more securely and more efficiently
than a traditional test market.

For more details on these reasons for new product failures, see our
book, Market New Products Successfully.