Meetings are usually the place where good things can happen and great ideas are born. Or at least we think so…What might sound interesting in theory, might be a total failure when put into practice.
According to Harvard Business School professor Clayton Christenses, each year more than 30.000 new consumer products are launched and 80% of them fail. The first question that comes to one’s mind after reading this is “What causes all these products to fail?”. Well, a number of factors can lead to this. The biggest problem businesses encounter is lack of preparation. Companies are so focused on designing and manufacturing new products that they postpone the hard work of getting ready to market them until too late in the game.
In today’s environment, market research plays a critical role for businesses to identify and reach their target audiences and also to increase their profit. This type of research also helps companies figure out marketing and advertising essentials such as tag lines, value propositions, pricing, promotions, metrics and much more. It’s how you know what your competitors are doing, how your pricing compares to your peers, and whether your offerings will land in new markets.
An old quote says that “Knowledge is power” and we totally agree with it. As you become wiser and more informed, you treat situations differently. This can contribute to your business performance because you have already learned from previous experiences and mistakes, so automatically you created a new vision. In a company, the more facts you have, the better decisions you make. In this way, market research has become ubiquitous with success – but only when it’s done right!
These days, marketers work harder than ever to give their brands the recognition they deserve. They’re exploring new channels and new media because competition is tough and you have to have a really good strategy in order to shine on the market. However, mistakes happen and sometimes we need to go through them to understand what we might be doing wrong.
In today’s discussion, we will go through the times that even the biggest, most recognizable brands have failed and made a fool of themselves. As funny as it may sound, some of the world's top brands have made costly missteps because they didn't know their markets well enough. Here are some examples, both from the past and from the present, that could help anyone to better understand what strategies to approach:
1. Ford Edsel
In the late 1950s, the Ford Edsel was supposed to be a game changer, the new American car for the New American family. And that was a big part of why it failed—supremely high expectations. For all the promises Ford made in marketing campaigns before the debut, you would have thought it doubled as a washer-dryer and space ship. And then, after all that promise, it was just a car. And not a great performing cost-effective one at that. The thing is, Ford did the market research—lots of it. But they used it in an effort to appeal to everybody instead of identifying and attacking a particular segment. Thus, the Edsel debuted in 18 different models and varieties and was dubbed the “Ford Hermaphrodite” but confused consumers. Ford invested $400 million into the car, which it introduced in 1957. But Americans literally weren't buying it, because they wanted "smaller, more economic vehicles”.
Kodak is a prime example of a company that was so focused on its current products and margins that it failed to see that the world was changing. Kodak had built many of the underlying technologies inherent to digital cameras, creating some core components as early as 1975. But the company never considered that people’s ultimate goal is to take great photos, not to buy film for their cameras.
Kodak’s revenues topped out at $16 billion in 1996 and dropped to $6.2 billion by 2011. It suffered nine quarterly losses in three years, and its share prices tumbled 90 percent between 2011 and 2012. Kodak sacrificed its competitive advantage on digital for the sake of promoting film, a technology that was rapidly falling out of relevance. By not paying attention to underlying market needs, Kodak missed a crucial lesson: Sometimes the best way to stave off competition is to cannibalise your own products.
2. ARCH DELUXE/MCDONALD’S
When you think of McDonald’s, what is the first thing that comes to your mind? Is it cheap, ready-to-eat, fast food that children have come to love even thought it is extremely unhealthy? Or is it food for grown-ups that focuses on the taste?
In 1996, McDonald’s marketed the Arch Deluxe burger. The target market was adults, and market research had indicated that adults wanted a burger designed for them. One potential problem may have been that the adults surveyed did not fit the real McDonald’s market. Additionally, many McDonald’s customers value attributes such as price and convenience over taste, so marketing the Arch Deluxe mostly based on taste ended up being an error. It was a big customer connection fail.
Commercials for the burger showed the burger’s taste turning off children, with the tag lines reading, “It’s the burger with the grown-up taste.” When that move backfired, McDonald’s struggled on with advertisements showing Ronald McDonald playing pool and hitting the golf links. Again, the message was out of sync with the people who frequented McDonald’s.
3. MICROSOFT WINDOWS VISTA
In 2007, when Microsoft launched Windows Vista, the media and the public had high expectations. So did the company, which allotted $500 million for marketing and predicted that 50% of users would run the premium edition within two years. But the software had so many compatibility and performance problems that even Microsoft’s most loyal customers revolted. Vista flopped, and Apple lampooned it in an ad campaign (“I’m a Mac”), causing many consumers to believe that Vista had even more problems than it did.
If Vista were launched today, the outcome might be even worse, owing to the rising popularity of Twitter and YouTube and the prevalence of Facebook “hate” pages. As social media and user-generated reviews proliferate, the power of negative feedback will only increase—making it even more imperative that products be ready before they hit the market.
4. CRYSTAL PEPSI
Many consumers see water as pure and healthy, and Pepsi decided in 1992 to give consumers Pepsi that was crystal clear. The soda dubbed Crystal Pepsi showed initial promise, with first-year crystal Pepsi sales of nearly $500 million. Of course, market research had indicated potential, so Pepsi did not anticipate the consumer confusion that happened next. Was Crystal Pepsi a lemon-lime soda? Was it healthier? What was the point in having a clear drink that tasted just about identical to Pepsi but that cost more?
After that first year of sales from curious consumers, Crystal Pepsi plummeted. Consumer confusion may have stemmed in part from the fact that Coca-Cola’s Tab Clear had launched in late 1992. It was a sugar-free diet cola (not lemon-lime) and failed as well.
Consumers were confused as to why Pepsi expected them to pay more for what amounted to the same old sugary Pepsi except that it was transparent. Plus, many were disoriented from the appearance and taste not matching up. Better and expanded market research may have brought these potential flaws to light.
5. STARBUCKS MAZAGRAN
In the mid-1990s, Starbucks partnered with Pepsi to sell Mazagran, a coffee-flavored, bottled soda found in grocery aisles. The product was a spectacular failure—described as tasting “interesting” at best—and was pulled within a year as sales declined after initial curiosity waned.
But maybe they needed to fail before they could succeed. Because the thing is, Starbucks got this one half right. Their market research had correctly told them that customers wanted a cold, sweet, bottled coffee beverage they could conveniently purchase in grocery stores. They just wanted it to resemble a milk shake, not a soda. Though it is impossible to prove, Starbucks urban legend even suggests that the idea for the Frappuccino was born out of Mazagran’s failure.
Dove has been known worldwide as being a brand that promotes people’s body image, more exactly women’s in very empowering campaigns. In fact, it has a history of more than 10 years which makes it one of the most successful marketing campaigns.
In 2017, Dove got their hands dirty. In England, they released limited edition packaging designed to present diverse representations of female bodies. Their packaging compared women's figures to abstract, shapeless soap bottles. Simply put, the packaging sent the wrong message. The release became a punchline and a source of genuine concern on social platforms like Twitter and Facebook. They only released 7 different shapes to choose from, forcing women to choose the bottle that matched their shape.
Instead of reinforcing a strong body image, it ended up increasing self-consciousness.
In conclusion, it is clear to see that even some of the world’s strongest brands with dozens of people forming teams have been victims to poorly market research and that costed them more than they would’ve wanted to. But mistakes make us stronger. These types of failures might not be such a huge problem for big companies as they might be for small ones, those that cannot recover from losses. So, in this case, it’s essential to have a correctly designed market research before launching something people are not aware of.