The article is a great read about some really inept and stupid corporate mistakes. It's hysterical to read about these marketing snafus. Specifically product development mistakes.
For instance, Mr. Akst writes, of Mr. Hodock's book,
"Coca-Cola executives were traumatized in the early 1980s by "Pepsi Challenge" commercials that showed real people, in blind taste tests, repeatedly choosing Pepsi over Coke. The folks in the taste tests really did prefer Pepsi, and in response Coca-Cola decided to reformulate its flagship product. The problem, Mr. Hodock says, is that a sweeter beverage -- in this case, Pepsi -- will always win in a "sip test." But real people, in the real world, don't take just one sip. They drink perhaps 16 ounces, and that's a different story. Millions of consumers had long ago decided that they preferred a less sweet cola -- as they loudly let Coca-Cola know when their favorite drink was supplanted by a sugary replacement."
I vividly recall this particular story. It was a major business headline for months, and called Coke's entire franchise, and its management, into question. Ironically, though, it also unleashed both Coke and Pepsi to realize something about shelf facings.
When Coke brought back the original formula as "Coke Classic," retailers were obliged to assign it substantial shelf space, as well. The result was that Coke's initial blunder actually increased its shelf space at the expense of smaller bottlers' products.
Still, it's quite revealing that the Coke executives failed to distinguish the differences between sipping tests, and satisfaction with full bottles of the soft drinks.
Says about all you need to know regarding creativity and confidence in senior management ranks at Coke in that era, doesn't it? Pepsi's Roger Enrico managed to put the entire senior management of his major, larger rival off balance with one simple marketing trick.
Another great story highlighted in the review is this one,
"One of the most interesting case studies in the book concerns a failed effort in the late 1980s by Campbell Soup Co. to launch a line of frozen soup-and-sandwich products called Souper Combos. Early tests indicated that consumers liked the concept, and Campbell projected $68 million in annual sales, just about hitting the company's target for new products. But as more data became available, the forecast was cut to about $40 million. "The innovation team didn't want to hear talk about a revised forecast," Mr. Hodock reports. "It was too far off the mark from the $70 million threshold level."
Nor did anyone at Campbell seem to want to take aboard the idea that, as Mr. Hodock says, "the product was a nightmare to work with." The frozen soup took twice as long to microwave as anticipated, and the directions required consumers to repeatedly insert and remove the soup and the sandwich. Mr. Hodock observes: "It was easier to prepare a bowl of soup and a sandwich from scratch." "
This is classic product development-gone-wrong material. Corporate denial and an insistence on customer acceptance of the product, despite warning signs to the contrary.
It reminds me of two additional product development fiascos, one of which was also a Campbell's flop.The first was a staple of product development classes when I was a college and graduate school student- DuPont's legendaery Corfam. The synthetic shoe material was to revolutionize footwear and vault DuPont into another large, engineered product market, just like nylon and rayon.
But it wasn't to be. The material didn't really wear well. Even some of DuPont's own employees, recruited to test the idea, reported this. But, as with the Campbell's soup-and-sandwich example, DuPont's management refused to acknowledge the feedback. This led to an embarrassing failure of the product in the market.
The other Campbell's new product disaster was dry soups.
When I worked at the Wharton Applied Research Center as a graduate student, one of my projects involved the study of using Campbell's soup for dieting. Without going into details, this, too, flopped.
Howeve, a friend of mine who ran the overall project told me of a Campbell's initiative a few years earlier. The company had studied the dry soup market, and determined that there was room for a Campbell's product line.
Being Campbell, the packaging was, of course- a can!
That's right. Rather than a smallish, rectangular box, like Knorr or Lipton, Campbell's put their dry soup in a can.
Not unexpectedly, it, too, failed in the marketplace. The firm's management was simply too narrow-minded to consider other packaging than its standard approach.
I agree with the book's explanation for these mistakes, as Akst summarizes,
"Why do such innovation blunders occur? Mr. Hodock cites several convincing reasons: a company's me-too impulses, which can lead to me-too products that people don't need or want; the high turnover rate among marketers, who are often young MBAs with more attitude than experience; an unwillingness to give the boss bad news ("That Apple Newton you've been counting on to save the company? It doesn't work."); chummy and inattentive boards of directors; and the short-term focus of chief executives, which can lead to the hasty development of new products.
Worst of all, marketers are just human. "People fall in love with what they create," Mr. Hodock says. "All too often that love is blind . . . normally rational people become evangelical salesmen for their dreams rather than practical, objective business executives." "
Of all the reasons, though, I think the last is the most significant. It's significant because, with an effective product development process in place, it should be easily avoidable. In my marketing education, at two separate business schools, product development was taught from the perspective that companies need to successfully balance and reconcile two opposing forces: a need to generate many potentially profitable new product ideas, and a need to efficiently and effectively winnow these ideas, via routine, objective procedures. The result should be genuinely creative, profitable products which have been objectively vetted, tested, improved and molded to have a good chance of market success.
Maybe they don't teach this in business schools anymore. Or perhaps the ever-more frenetic pace of business in the past few decades has resulted in the shredding of a carefully-designed and managed new product development process.
Or perhaps too many inexperienced MBAs have gotten involved, and the process has degenerated into individual attempts to ride a new product to fame, riches and success.
Whatever the reason, it makes for very entertaining reading. And reminds us that not all new products become iPods, iPhones or Crocs.
No comments:
Post a Comment