Why Brands Fail

 | May 18,2010 10:46 am IST

Product and Brand failures occur on an ongoing basis to varying degrees within most product-based organizations. This is the negative aspect of the development and marketing process.

In most cases, this failure rate syndrome ends up being a numbers game.There must be some ratio of successful products to each one that ends up being a failure.

When this does not happen, the organization is likely to fail, or at least experience financial difficulties that prohibit it from meeting profitability objectives. The primary goal is to learn from product and brand failures so that future product development, design, strategy and implementation will be more successful.


Studying these Brand and Product failures allows those in the planning and implementation process to learn from the mistakes of other product and brand failures. Each product failure can be investigated from the perspective of what, if anything might have been done differently to produce and market a successful product rather than one that failed. The ability to identify key signs in the product development process can be critical. If the product/brand should make it this far, assessing risk before the product is marketed can save an organization budget, and avoid the intangible costs of exposing their failure to the market.


Defining Brand Failures

A Brand is a failure when its presence in the market leads to: - 

  • The withdrawal of the product/brand from the market for any reason; 
  • The inability of a product/brand to realize the required market share to sustain its presence in the market; 
  • The inability of a product/brand to achieve the anticipated life cycle as defined by the organization due to any reason; or, 
  • The ultimate failure of a product to achieve profitability.  


Failures are not necessarily the result of sub-standard engineering, design or marketing. Based on this critical definition, there are hundreds of bad movies that have reached â cult status and financial success while many a good movies have been box office bombs. Other premier products fail because of competitive actions. Sony Beta format was a clearly superior product to VHS, but their decision to not enable the format to be standardized negatively impacted distribution and availability, which resulted in a product failure.


The Benefits of Studying Failures

Gaining a better understanding of brand/product failures is important to help prevent future failures. Studying the history of brand/product failures may generate some insight into the reason for those failures and create a list of factors that may increase the opportunity for success, but there are no guarantees.


Common Reasons for Product/Brand Failures

In addition to a faulty concept or product design, some of the most common reasons for brand/product failures typically fall into one or more of these categories: - 

  • High level executive push of an idea that does not fit the targeted market. 
  • Over-estimated market size. 
  • Incorrectly positioned product. 
  • Ineffective promotion, including packaging message, which may have used misleading or confusing marketing message about the product, its features, or its use. 
  • Not understanding the target market segment and the branding process that would provide the most value for that segment. 
  • Incorrectly priced too high or too low. 
  • Excessive research and/or product development costs. 
  • Underestimating or not correctly understanding competitive activity or retaliatory response. 
  • Poor timing of distribution. 
  • Misleading market research that did not accurately reflect the actual consumer behavior for the targeted segment. 
  • Conducted marketing research and ignoring those findings. 
  • Key channel partners were not involved, informed, or both. 
  • Lower than anticipated margins. 
  • Thus, Brand Failure cannot just be attributed to poor product not being able to sell in the market but the reasons others than that.


Why Brands Fail

In our opinion, the factors which contribute maximum to the brand failures are: -

1 Category 

2 Timing 

3 Cultural factors