Case Study: 3 Product Launch Failures and What You Can Learn From Them

Product Launch Failures


The best way to learn is to look at what didn’t work for others. No matter whether it’s a big brand or just a small business like yours, if their product creation and marketing strategy failed, you should take the time to discover what went wrong so you can sidestep the pitfall when it presents itself in your path. Knowing what not to do helps keep you on the path to product launch success so here are 3 case studies to get to grips with…


#1 Product Launch Failure: Sony Betamax


This one is all about a company, Sony, who decided that it would try and shut out the competition by not making its world beating video recording system available to them to use in their machines. It was in the 1970s and Sony had developed ‘Betamax’ which allowed people could record stuff off their TVs and get great sound and picture quality. The mistake they made was that they thought they could steal a march on their competitors by forcing them to develop systems of their own… which is just what they did. Only the strategy backfired. The new VHS system they invented became the industry standard. Everyone apart from Sony used it. That means recordings could be played on any manufacturer’s machine. By 1988, Sony was hosed and had to kill their superior product in favor of the one that was inferior but universally available.


Google is working the same trick with its Android smart phone software. Mobile phone manufacturers everywhere are using it. This may leave Apple in a sticky situation. Will they be forced out of the market like Sony were? Well, the jury is still out but my guess is that they won’t. Apple’s fundamental offering is based on a lot more than a smart phone… They have the App store, Itunes and the ability to innovate faster and more effectively than anyone else. Their operating system is integrated into a range of different platforms from phones to tablets to laptops and computers… Apple TV is coming too. It’s this cross platform usability that no-one else does as well that will maintain their market leadership.


Key Takeaway: Before you go down the ‘proprietary software’ route make sure that you have built a really strong offer to back it up. That means that your product has to re-invent the current solution to such an extent that you create a whole new market. One that makes your competitor’s products as close to obsolete as make no difference.


#2 Product Launch Failure: Segway


Innovating  for the sake of innovation. Because you can. Because your engineering skills allow you to. Because you have a vision of the future and your vision is 20/20 crystal clear is all very well but if you don’t apply that vision to a crying need in your market you are doomed to have an underwhelming product launch.  That’s what happened to Dean Kamen in 2002.


That’s when he launched his two wheeled self-balancing personal transport device. The Segway was supposed to solve all your commuting problems at a stroke. What Kamen had forgotten to do before the launch was ask his target market whether they wanted to use it. After all there was nothing quite like it on the market. It was not taking an existing solution and reinventing it. It was a completely new solution that had never existed before. Despite the pre-launch buss and the $100m invested in developing the product, it was a flop. Less than 30,000 units were sold at $5k in six years.


You may not believe in market research. Steve Jobs didn’t. But you cannot avoid having a customer centric product development strategy which addresses the real problems that people are faced with. Rethinking the solution presupposes that you know intuitively what the market wants. Apple reinvented the music industry by taking an analogue product, the Sony Walkman, and digitizing it so it became the Ipod AND then provided a library of music, Itunes, to fill the demand. It was new. It was cutting edge. It was easy to use. It was what people wanted.


Key Takeaway:  The Segway failed because its inventor was not reinventing an existing solution. He was trying to create a whole new category for which there was no proven demand. When you start your product development make sure that you are not doing so in the ‘hope’ that your target market wants to buy it. Make sure that you have absolute certainty that they do…


#3 Product Launch Failure: Netflix


In 2011, Netflix, the very successful DVD rental service, recognized that its video streaming service was the road to its future success. In an effort to move the company quickly in that direction, the Netflix CEO announced that it would unbundle the DVD service from the streaming service. Not only did the company change the pricing structure, it also announced that it would launch a separate service called Qwikster for its DVD customers. That meant customers who used both the DVD service and the streaming service would have to use two separate services for their rentals. The reaction from customers was swift and angry. In the third quarter of 2011 alone, Netflix had a loss of about one million subscribers — 4 percent of its subscriber base in just three months. Its stock price also dropped dramatically. While Netflix did not retract its new pricing, the company was forced to reverse its decision to separate the two services. Qwikster was quickly quashed.


Key Takeaway:  Launching a new service that fundamentally changes how a majority of customers do business with a company can backfire.


That’s just 3 product launch marketing case studies to get you started.  The question is…  What products or services have you got that you can transform into best sellers by refocusing their core offering based on customer feedback?  When was the last time that you stepped out from behind your desk and actually spoke to your clients or customers face to face for no reason other than to find out what’s bothering them?


They are your most valuable asset. They are your fastest route to higher profits. So get on the phone or onto the shop floor and connect with your customers. You will definitely learn something which you can feed back into your product line ready for a new product launch.


If you’d like to learn more about how to plan and execute a successful product launch, don’t hesitate to contact me. Even if you have not done a launch before or even if you have and now realize that hiring a launch manager would be a smart thing to do, you may be wondering how much hiring a product launch manager will cost. The quick answer is not as much as you might expect. Our aim is to structure a win-win sort of a deal with clients. We get paid when you get paid. That is we work on a percentage of the ‘pre-return’s gross’ revenue that your product launch makes. Naturally, you have to pay a fee to get on our calendar. We can only take on 2 or 3 clients per year so our time is valuable and we must know what our schedule is well in advance. It would be unfair on our other clients if we didn’t insist on this. Find out more by booking a free consultation with me now


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Rory Ramsden