The Hindu Business Line : Getting the recipe right

It has been said, "Those who fail to learn the lessons of history are condemned to repeat its mistakes." Nothing brought this home closer to me than a recent launch of a new range of casual/ sportswear shirts. As I am a big fan of attractive visuals in advertising campaigns, the lovely red and white checks splattered all over some national dailies (supplements, of course, to make use of the good print quality afforded by the paper) and hoardings were mouth-watering! Added to the lovely visuals was a shopping occasion close at hand, and presto, the hubby's birthday gift was decided then and there! But what followed was an example of consumer eagerness turning to disgust ... in effect, a marketer's nightmare. For the manufacturer seemed to have disregarded a basic tenet of a new product launch - get your production and distribution right before launching the advertising campaign! The red and white checks were not available in LifeStyle or in Shoppers' Stop. (So okay, these are multi-brand - let's traipse to their exclusive shop.) Surprise! Surprise! Not there either. Unless this fabulous piece of apparel was skulking in the off-price factory outlets, I didn't know where to get it, and so the poor hubby got his usual present of one book and two CDs.

Makes you think, hackneyed and outdated as it may be, but good ol' Kotler's Four Ps of the marketing mix had something behind them, after all! So to just have a good product and great advertising is not enough - you have to get the product to reach the stores on time or down the drain goes your launch - one more statistic to add to new product failures' humungous rates.

Just like this interesting `snack' product idea, Annapurna Four o' clock Tiffin - Maggi in a new avatar? Close enough - but still, in that this was rice and vegetable-based, and not refined flour, one would have thought more nutritious; nice, bright vibrant packaging, clear enough name, giving you the product benefit upfront; good distribution - it was HLL's distribution muscle at work, after all; and yet, the product bombed. Why? Well, the minute you eat the `pudding', you find out - it just doesn't taste good! After all, Maggi, for all its almost legendary super-positioning, and even greater `Two minutes' communication, scored because it had great taste to match, a fact which became evident when the taste changed sometime ago (owing to the manufacturing method) and saw a drop in sales (also contributed to by a parallel aggressive campaign by Top Ramen). But Nestle immediately realised this and went back to the old taste, with a strong mass media as well as free sampling campaign (reminiscent of the new vs Classic Coke episode, isn't it?). In this case, the first P - puddin... oops ... product was found lacking. Another international high stakes product that failed was Campbell's Intelligent Quisine (IQ), a frozen food line that would help older Americans suffering from high BP or diabetes reduce cholesterol and BP ... $55 million, seven yrs of R&D, great endorsements from the medical fraternity; many trials ... and yet it bombed due to poor taste.

Robert McMath, co-author of What Were They Thinking? Marketing Lessons I've Learnt From Over 80,000 New Product Innovations and Idiocies used to run a `New Product Showcase and Learning Center' in New York, a supermarket-like warehouse which exhibited the worst examples of product failures. (Garlic cake in a jar, microwaveable ice-cream sundaes, Vaseline Aftershave, Seven Up lip balm, banana-scented tanning lotion and yoghurt shampoo - yuck!) Over $4 billion worth of them! And corporate visitors paid hundreds of dollars per hour to figure out how to avoid their own product being placed there.

Examples of new product ideas failing abound (both internationally as well as home-grown) as Pepsi discovered some years ago when it introduced a clear cola called Crystal Pepsi. People expected colas to be dark brown in colour (have you seen the World Cup `blue' Pepsi?)

The drinks' market is a graveyard of bad ideas, sometimes absurdity taken to the point of hilarity: There was bottled water for pets: Thirsty Cat. The price: $1.49 for a quart bottle of water for pets! And then there was aerosol toothpaste, which turned out to be a bust when kids started spraying the bathroom with it. Maalox Whip, the dessert cream whip topping that controls diarrhoea. (Maalox is a well-known brand of medicine for diarrhoea.) Bomb! And how about hand-held organisers? People love them, yet millions of marketing dollars couldn't make the Apple Newton or Microsoft Pocket PC fly. Palm simply trumped the bigger guys with its superior product. Edsel for Ford - $250 million down the tube; Fedex's Zapmail - $340 million and the legendary Iridium, a mind-boggling $5 billion, were all examples of mega errors in launch.

In a very different industry, and a very different part of the world, the performances of Crocin 1000, Disprin Paracetamol and Moxif 400 during the last few years are clear cases of failures despite their belonging to reputed drug companies. SmithKline Beecham Consumer Healthcare launched Crocin 1000 tablet with 1,000 mg of paracetamol and promoted it for chronic conditions such as osteoarthritis and rheumatic arthritis. But there was no warning of side-effects. The market rejected the product in a few months from the launch.

In the case of Disprin, Reckitt wanted to retain the brand name and so launched Disprin Plus with paracetamol as the only ingredient (as aspirin was making it uneconomical) When the Karnataka Drug Controller objected, Reckitt renamed the product Disprin Paracetamol. The brand confused the trade and consumers thoroughly and bombed. The failure of Moxif 400 of Torrent was mainly on account of its high price with no clear therapeutic advantages over other available drugs.

Cadbury India, which made a foray into the sugar confectionery segment with the launch of Googly in 1997 and followed it up with products such as Gollum, Byte and Frutus, has had limited success in the category. Nestle India also had limited success with its foray into sugar confectionery, under the Allen's banner. Perfetti India's caramelised candy, Alpenliebe, is one of the few exceptions that has made it big over the recently.

In the personal care segment too, there are many stories of brands that did not work in the marketplace. Even CavinKare, a company known always for innovations or firsts in the market had bombs in Kanya, an anti-lice powder, and Minerva, a mineral water brand. Kanya failed because consumers needed time to adjust to the product. Minerva possibly did not take off due to supply chain issues. In addition, extensions of their now-famous Chik brand, Chik toilet soap and Chik Kali Mehendi, did not cut ice with the consumers.

A look at some oft-cited statistics state that seven out of 10 products fail during their first 18 months-two years of launch. In the past 10 years, the success rate has improved to four or five failures out of 10. Another survey shows that only one brand out of the total brands launched during the past 10 years could make it to the Top 50 in India. Actually, in today's environment, new products are not introduced in the proper perspective. It appears that companies have adopted a shooting-in-the-dark policy. This has led to the failure of many products.

The important point which many marketers fail to realise is that new products bomb not merely because the idea wasn't good and/ the product wasn't good but also because, very often, they goof in execution (as the shirt I didn't buy shows). Sometimes just giving the product a name that doesn't resonate with consumers can be the beginning of the end. So there is not one secret for success but there are hundreds of different reasons why products fail.

The clearest reasons for products not taking off are the concept or the category not evolving: people do not understand and accept the category, leading to disasters; sometimes it is even the sheer timing of launch. Obviously, the onus is on the marketer to therefore make the category figure more imperatively in the consumers' consideration set. So while a Maggi did just that, a Covo (a very old Lipton Chocolate spread ) could not (and yet the same company later launched the Kissan Chocokick spread, which is doing better).

In some cases, this could be because there was inadequate market analysis, insufficient market research, misjudged marketing conditions, or that they simply offer no price or performance advantage. Ultimately, a product has to have a consumer benefit rationale or a marketing justification.

Another problem is inadequate follow-through. Most companies in the FMCG sector end their product launches by stocking the retailers. However, repeat orders, which are the true determinant of a product's success, may not flow due to several reasons: consumers did not see the product/ they didn't try it/ they did not like it/ liked it but the product was not available when they went for a repeat purchase. (All failures of execution - to do with display in the first instance/ poor advertising or information dissemination in the second/ bad pudding in the third and my shirt syndrome - poor distribution last). So a big reason for new product failure is almost certainly the failure to implement appropriate launch strategies. It is not enough to know that a product has a chance of succeeding. It's also essential to know what needs to be done to maximise its chances of success.

What has been proven empirically is:

The sheer weight of marketing muscle increases the probability of new product success

Blind optimism, a lack of common sense, insufficient resources, inadequate research, and the response of rivals all play a role in the death of new products

For low-priced consumer products, if repeat purchase patterns are low after three months, the product will most likely be a poor performer

There are two options for launch of a new brand: either develop a new concept over time, thus involving big commitments of money, time and conviction; or introduce a new concept when the timing is right. The later approach would be successful if there is adequate and ongoing research in understanding the behaviour of consumers. Major established marketers created completely new brand names because their new products involved completely novel concepts. P&G's Swiffer and Dryel are examples of new product concepts with new brand names. These marketers made substantial investments in marketing, advertising and promotional programmes. They appreciated the need to fully fund new product launches in order to cultivate new product usage habits. The most important objective of a new product introduction is to drive the formation of usage habits so consumers will make repeat purchases without major promotional incentives. Having said that, we have enough examples of great new product ideas doing well on the basis of just distribution and no advertising ( STD/ PCO booths being one) but fewer of the reverse case.

Which brings us back to the point we started with in the beginning. The bottomline is that most new product failures are due to marketing mistakes. What our marketers should have the ability to avoid is mistakes made in making the pudding ... or in making it when the audience is not hungry ... or not having the pudding ready when the customer is hungry ... or ... or ...

(The author is a Bangalore-based marketing consultant.)

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