Product Failure Evaluation
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The document provides information about several product failures by major companies: McDonald's Arch Deluxe burger failed in 1996 due to inappropriate marketing that targeted adults but showed kids rejecting it, high calorie content, and being too expensive. It showed McDonald's losing touch with its customers. Crystal Pepsi, launched by PepsiCo in 1992, failed because it did not have a compelling difference from regular Pepsi and the "crystal" name was not appealing. The product and market were not well defined. Nintendo's Virtual Boy game console from 1995 failed because it caused motion sickness, was uncomfortable to play, and lacked a "killer app" game. It also had an isolating gameplay experience
![Nintendo
• Japanese multinational consumer electronics company
located in Kyoto, Japan.
• World's largest video game company by revenue
• Founded on September 23, 1889[2] by Fusajiro
Yamauchi
• Extensive experience in the video game industry
• First to introduce motion technology in video games
• Reasons for Launch:
• Slowdown of the Japanese, the US and European
economies
• Short products lifecycle
• Growing US games software market](https://image.slidesharecdn.com/npds-121224150526-phpapp02/85/Product-Failure-Evaluation-18-320.jpg)
Product Failure Evaluation
- 1. Product Failure Evaluation Presented By: Group 4
- 2. Mc Donald’s Arch Deluxe
- 3. Mc Donald’s About Business began in 1940, with a restaurant opened by brothers Richard and Maurice McDonald World's largest chain of hamburger fast food restaurants Serving around 68 million customers daily in 119 countries Operated by either a franchisee, an affiliate, or the corporation itself Speedy Service System Golden Arches Reasons for Launch of Arch Deluxe: Introduction of a hamburger targeting grown-ups Restaurants getting increasing number of customer visits Increasing competition from Burger King, Starbucks, Taco Bell, Wendy's, KFC
- 4. McDonalds Arch Deluxe Launched in 1996 especially for adult consumers A part of strategy to expand the then existing consumer base to adults A new line of burgers was created called as Deluxe line of burgers, of which Arch Deluxe was the flagship product Marketed as the ‘Burger with the Grown-up Taste’; the idea was to have a burger which wasn’t associated with children and to get rid of the child-centric image of the brand Estimated cost of marketing campaign was $100 million Soon discontinued after failing to become popular despite a massive marketing campaign One of the biggest failures of the Fast food industry
- 5. Reasons Behind Failure Inappropriate Marketing Mix – Product Positioned as a “sophisticated” product meant for adults McDonalds was known for its convenience and simplicity, not sophistication Very high calorie content (fat contents: 32 grams) – Price Too high for a burger at that time ($2.29) – Promotion Advertisements where kids (their top customers) were shown shunning the products (calling it ‘yucky’) and saying they don’t understand it The mascot Ronald was dropped for initial campaign.
- 6. Reasons Behind Failure Faults in product development process Centralized branding and marketing decision Lack of a well defined cross-functional new product strategy; Insufficient involvement of critical departments during the development and Launch Insufficient roll-outs of the product before launching Other successful products such as Big Mac, Hot Apple Pie, Egg McMuffin and Filet O’ Fish came out from operators’ kitchens out in the field Mismatch between the product development-process style and the business context
- 7. Reasons Behind Failure Less appealing value proposition Lacked a compelling consumer benefit Was a simple me-too item No favourable PODs Served merely to further fragment the product line Lack of resonating focus as compared to the competitors’ products
- 8. Reasons Behind Failure Other Reasons – Case of losing touch with the customers and straying away from their successful strategy – Customer confusion: pushing the customers to think whereas people bought McDonalds product in reflexive manner and not due to cognition – Employed ‘compete on taste’ strategy but its customers liked McDonalds for friendliness, cleanliness, consistency and convenience – Defining the business context – The company wrongly defined its customers as adults for this product – McDonald's name was too strong as a value burger joint for anyone to take the "dining for adults" line seriously
- 9. Time Wasted Stage Gate Diagram
- 10. Crystal Pepsi
- 11. Pepsi About Created and developed in 1893 Branding - 26th amongst top 100 global brands in ‘08 Distribution Channel Pepsi has a broader product line and outstanding reputation Reasons for launch of Crystal Pepsi: Intense Competition PepsiCo is far away from leader Coca-cola in the international market Broadening of Product Base and Growing Bottled Water market
- 12. Crystal Pepsi In 1992, Pepsi came out with Crystal Pepsi- Clear Cola They also produced a diet version – Diet Crystal Pepsi Taste very different from Pepsi Without color, caffeine and preservatives but added sugar 1n 1994, Crystal Pepsi was re-launched as just Crystal with addition of citrus flavor
- 13. Failure reasons Insignificant point of difference During development stage, PepsiCo had tested 3,000 variations of formulas with 5,000 consumers in their company laboratories and malls taste-tested survey. Incomplete market and product definition before product development starts The clear color of Crystal Pepsi was to target health-conscious consumers. Crystal Pepsi contained 130 calories viz a viz 150 calories in regular Pepsi Cola in a 12 ounce serving
- 14. Failure reasons(Cont.) Too Little market attractiveness
- 15. Failure reasons(Cont.) • Poor Name Execution No pureness of taste “Crystal” name too ordinary to attract Generation – X Connection with Pepsi • Launching a failed product
- 16. Not enough emphasis on the idea Stage Gate Diagram
- 18. Nintendo • Japanese multinational consumer electronics company located in Kyoto, Japan. • World's largest video game company by revenue • Founded on September 23, 1889[2] by Fusajiro Yamauchi • Extensive experience in the video game industry • First to introduce motion technology in video games • Reasons for Launch: • Slowdown of the Japanese, the US and European economies • Short products lifecycle • Growing US games software market
- 19. Nintendo – Virtual Boy • Introduced in November 14, 1994 • Virtual Boy was a table-top video game console developed and manufactured by Nintendo. • First video game console that was supposed to be capable of displaying "true 3D graphics" out of the box. • Most video games use monocular cues to achieve the illusion of three dimensions on a two-dimensional screen, The Virtual Boy creates an illusion of depth through the effect known as parallax. • User looks into an eyepiece made of neoprene on the front of the machine, and then an eyeglass-style projector allows viewing of the monochromatic (in this case, red) image
- 20. Failure Reasons • Undefined Product Identity – Lies somewhere between a stationary gaming console and a portable unit – VB was not backwards compatible with GB – Missed the opportunity to convert existing GB users • Comparatively Poor Display – Using only a single color for display: red – Inferior technology to other options in terms of display resolution • Lack of Killer App – At launch, Nintendo did not have the spectacular game that could effectively showcase the full potentials of the VB.
- 21. Failure Reasons • Negative Effects – Designed such that only one player can view the display at a time – Challenging to have a collective play experience • Isolating Gameplay Experience – Widely criticized for being uncomfortable to play – Reported to cause physiological effects such as motion sickness and eyestrain • Difficult to Explain and Demonstrate – Challenging to advertise – Screenshots of games looked worse
- 22. Stage Gate Diagram • Focus on your brand values. If your values are ‘strong, masculine and very rugged,’ you shouldn’t be selling perfume intowine Not much thought or coolers. A range of baby clothes may also friendliness idea. user be a bad • Don’t alienate your core customers. For brands thatin Hype-creation failure inspire Launch strong loyalty, the temptation is to test that loyalty to its limits by stretching the brand into other product categories. However, this is a dangerous strategy and can lead to what marketing experts refer to as ‘brand dilution’ – in otherwords, a watered-down brand. • Remember that more is less. ‘When you study categories over a long period, you can see that adding more can weaken growth, not help it .The more you add, the more you risk undermining your basic differentiating idea, which is the essence of your brand.’
- 24. An iconic cult brand Harley Davidson (H-D), the American motorcycle manufacturer has a loyal brand following not only in the U.S. but also in many countries across the globe. The motorcycle’s distinctive design and exhaust note has given rise to many loyal brand communities that are active in clubs, events, and even a museum. Such is the power of the cult iconic brand that just licensing of the Harley-Davidson logo amounts to approx. 5% of the company’s net revenues. In 2007, an Interbrand report suggested that the brand name ‘Harley-Davidson’ had a market value of $7.72 billion, which was 131 times more than the book value of $59 million. S
- 25. Harley Davidson – Brand Values • Freedom – Go wherever you want to, whenever you want to. • Authenticity – Noted for the tradition of heavy customization, Oldest and quality name in manufacturing bikes. • Community Building– HOG has 1.4 million members, Ride Planner to plan trips, H-D Photo Center for posting photos of memorable trips. • Rituals – Community festivals and monthly or annual rides/events are conducted regularly, buttons and pins from an activity/event are worn on jackets. • Masculinity – Unique sound of the exhaust, association with icons in films. • Toughness – Rugged heavy design and look of the bikes.
- 26. World wide Revenue $282.2 $4.3 billion 2009 million motorcycles $767.3 parts & acce. million $3.2 general Billion merchandise HARLEY-DAVIDSON, INC. NYSE: HOG Fact Sheet
- 27. Brand extensions Merchandise • Helmet • Clothes (Jackets…) • Mugs • Collectibles…. • Perfumes Beer Bars
- 28. • While motorbike apparel (Motorclothes® merchandise) and ornaments probably matched the Harley Davidson cult heritage brand, the company had lost focus. • In the 1990s, it extended the brand too far. It introduced products like wine coolers, aftershave and perfumes. Even the loyal fans did not like the idea, as it did not resonate with the tough brand identity. • The company was clearly not focusing on what it knew best – building strong bikes. • However, Perfumes and wine coolers were eroding the mystery of the H-D brand. After strong criticism from the loyal customers, the company pulled of many inappropriate products
- 29. Harley Davidson perfume Failure • Harley Davidson had fallen into the trap of thinking that more products equals more sales. And it usually does, at least in the short term. • They moved away from their Loyal Customer base or they misinterpreted their customer • The Image of word “perfume” was completely opposite of image of Harley Davidson
- 30. Poor NPD Practices STRATEGY – HD Perfume did not go hand in and with mission and vision of Compnay – No NPD Goal :- They just want to sell more and more and extend the brand – No Product mix appropriateness RESEARCH – Market Research completely ignored in case of perfume
- 31. Stage Gate Diagram Thinking more products = more sales
- 32. Lessons from Harley Davidson • Focus on your brand values. If your values are ‘strong, masculine and very rugged,’ you shouldn’t be selling perfume or wine coolers. A range of baby clothes may also be a bad idea. • Don’t alienate your core customers. For brands that inspire strong loyalty, the temptation is to test that loyalty to its limits by stretching the brand into other product categories. However, this is a dangerous strategy and can lead to what marketing experts refer to as ‘brand dilution’ – in otherwords, a watered-down brand. • Remember that more is less. ‘When you study categories over a long period, you can see that adding more can weaken growth, not help it .The more you add, the more you risk undermining your basic differentiating idea, which is the essence of your brand.’
- 34. Crystal Harley Nintedo McD Arch Pepsi Perfume Virtual Boy Strategy Does not fit with the mission Y N Y Y No NPD Goals N N y N Short term tactical initiative N Y N Y Uncear NPD Goals Y Y Y N No Regard for mix Appropriateness Y Y Y N No concern over types of NPD projects being developed Y N Y Y No Prioritization of NPD products N N Y N No process undertaking protfolio mnagement N Y Y Y Research Customer involved in NPD process Y N Y N Little market Research N Y Y Y No real evaluation of testing Y Y Y Y No market study N Y Y Y Process Criteria for evaluating NPD undefined N Y Y Y Limited doccumentation regarding NPD N N Y N Minimal Testing Y Y Y Y No NPD process exists N N Y N No discipline in using company's NPD process N N Y Y Project not reviewed at completion N Y Y Y NPD circumvented management's approval N Y N N
- 35. Thanks for paying attention