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Why So Many Flops?


Readers Report

WHY SO MANY FLOPS?

Your story on "Flops" (Cover Story, Aug. 16) was helpful in explaining why certain products fail despite millions spent in research and development.

What's more surprising is that, in some cases, the research couldn't possibly have supported the product. The best example you gave was the RCA videodisc player that didn't record. For almost two years prior to its release, video- and audio-industry research separate from RCA's showed no interest from consumers for that very reason.

Stephen Meyer

Studio City, Calif.

It is not only consumer-goods companies that introduce products that fail. Business-to-business marketers do it all the time. In industries from investment products to machine tools, companies end up with lemons because they don't do their homework. In the 1990s and beyond, only companies that do enough

research--and listen to the results--will survive.

Deborah C. Sawyer

Buffalo, N.Y.

Your article paints a picture that your figures don't support. Based on the text, I would assume that new-product development was stagnant or worse. Your figures point out that 12 out of 13 new products don't make it out the door, yet only 46% of the new-product development budget goes to failures. That looks to me as if businesses are cutting their losses early and identifying successes.

Long-term success is another difficult item to measure. Counting how many products are still on the shelves five years after development gives a warped picture. Very little office equipment sold five years ago is still available, for instance. And consumer fashions and fad products will not last at all--but

they can still generate a tidy sum for those businesses.

I see the story differently: Businesses are less inclined to expand into new markets or manage very diverse conglomerates. They also are more focused on shorter-term returns. So they're taking fewer risks and staying closer to their core businesses, with products they know how to roll out faster. That's an important story. But it's not saying that new-product development is in trouble, nor that eliminating failures is a formula of 14 items culled from 10 successes and 10 failures.

David J. Alsberg

Astoria, N.Y.

Ican't agree with the six-step program in "Here's why--and how to do better." I think your way leads right into marketing disasters. The most dangerous point is "asking the customer." That creates only me-too products because the customer is not creative. No real marketing breakthrough has been built on marketing research.

The key is being first. All successful marketers have their firsts: Apple (PC), Amiga (multimedia), Hewlett-Packard (laser printer), BMW (ultimate driving machine), Voyager (minivan).

Michael Brandtner

Rohrbach, Austria

You touched on the concept of speeding products to market. Considering that new products account for nearly 30% of profits for many companies, a company that doesn't speed new offerings to market faces decline a short way down the road.

I would suggest that companies traditionally put too much at stake by

focusing on the development of only

a few new products. Companies would be better off speeding a large number of products--or variations of one product--to the shelves in the shortest amount of time. The focus should not be on reducing new-product failures. It should be on increasing new-product successes.

The company must be willing to let products fail. These failures secure shelf space and confuse the competition while maximizing consumer choices. The company must also be willing to sacrifice its current product line before competition kills it.

Until a company is ready to alter its mindset, it will be burdened with costly development and testing processes and a large number of flops.

Victor Sandy

Sterling Heights, Mich.


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