Here’s a great list of some big new product failures and some reasons why they failed.
Ultimately, the reasons boil down to one thing — these companies made products that too few customers wanted and they figured that out fast because they didn’t sell.
There’s nothing wrong with that. Trying new things is good. The stuff we use today was a result of someone trying something new at some point in the past. They just happened to be right. And that happens much less that many of us ever realize.
While being wrong is okay, it’s much better to be wrong on a small scale. These companies could have avoided a huge expense if they would have launched these things on smaller scales to get a better sense of how real customers behave when faced with the actual purchase decision.
New Coke is one of my favorite examples. It fared better than Coke and Pepsi in taste tests, but what became obvious after its roll out is that most people do not buy their soda based on taste tests. They may buy based on what they know and what they like from past experience. There may be a number of other reasons why they buy what they buy, so Coke’s managers mistakenly believed that a head-to-head taste comparison was a valid predictor of sales results, when it wasn’t.
I’ve seen this happen a number of times up close. Business managers become enamored with the rationale for a new product. They lose the discipline to try it on a small scale first. They get some added pressure from competitors or industry changes. They get the idea that delivering something big now will be good for their career. And it would be, if they were able to do so. They forget, or stop caring, that the odds are against them and they roll it out big.