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6 reasons why brands Fail?

“I have not failed. I’ve just found 10,000 ways that won’t work.” – Thomas A. Edison

 

In 1985, I was a young brand Manager with a soft drink company, when it all happened.
That was when Coca-Cola company made its biggest mistake.
It changed its century-old secret formula and made “New Coke”
They changed it because Pepsi Cola ran a campaign “Take a Pepsi challenge” where consumers were asked their preference between Coca-cola and Pepsi Cola in a blind test.

The result showed that majority of consumers preferred the taste of Pepsi which was sweeter.

Coca-Cola company believed these claims by Pepsi and changed its flavour.

 

Suddenly, all the hell broke loose.
People hated the new Coke.

Grand Mothers cried on TV to bring back the old Coke.
There were protest marches, the whole nation started mourning the death of original Coke.
Coca-Cola never realised that how deeply rooted the relationship with the brand was.(not the product)

The Coke Management was forced to bring back the old Coke as “Coke Classic”
Kelloggs had 2.0 % market share in India but had a promise of over 20 million consumers.
How can anything go wrong?
But Kelloggs failed to realise that like all foods, breakfast is a cultural issue.
Indians eat different food at different times.
How can insipid cornflakes compete with Indian pancake (parathas) and south Indian Idli and dosa?
It was a hard and long fight for the American brand to survive.
Only deep pockets saved their honour to fight the long battle of taste with Indian consumers.

 

My first phone was Nokia.

In the early days of mobile technology, Nokia was undisputed King.
It was also the most trusted brand among Indian consumers.
I do not know if they were arrogant, over-confident or plain stupid-but they committed one basic blunder-they failed to keep up with new technology.

New Competitors did a neat ice-pick job on Nokia- Samsung, Motorola, LG, Apple, Micromax.

The new phones got you Email, music, internet at a fast speed and good quality cameras.
Nokia failed to understand that the problem was not with the phone but with the changing need of the new customer who wanted to round the clock communication.
Nokia “Connecting people” failed to connect with the new customer and paid a heavy price for it.
The company wants to re-enter Indian market in 2017.
But, there is a minor problem – it is five times more difficult to recover the lost ground.

 

As per Neilson report, 16,914 products were launched in FMCG category, since 2012.
Only 0.14 % or 23 launches were considered successful out of 80 FMCG categories including food, personal care, household care, over-the-counter products and soft drinks.

What’s going on?
Why are more than 99.9 % brands failing?


There are 6 key reasons, why brands are failing:

1. Companies believe that Research is a waste of money:

The general perception is that Gut feel is the greatest feeling.
Companies are not spending enough on market research.
Most of the Indian FMCG companies do not want to invest in research.
Most of the entrepreneurs, who come to us for launching new products, are not keen to undertake any professional consumer research.
They will not want to buy even the published data also.

 

Today, most of the products display similar attributes.

It is a sea of sameness.
How do you create a proposition, which will be refreshingly new and will appeal to your customer?

Do you actually know what is going through your potential customer’s mind?

It is a myth that conducting a research is expansive and must be avoided at any cost.
A well thought out research plan can bring in unimaginable benefits to the brand.
Consumer and trade insights due to a detailed research can help in developing a powerful marketing strategy.

Most of the successful brands develop their communication strategy on the strength of research inputs.
When research showed that at least 30 % of the Fairness cream was being used by men, the Fairness cream for “Man” was launched and which created a successful category.

 

The organisations must believe in detailed research before trying to venture out in the market, which is full of competitive brands.

This requires a complete change of mindset.
Unless this mindset will change- we shall continue to have such high failure rate.

  1. Running out of money:

 Most brands fail because they run out of money.
They are not sure of the success and they start cutting corners.
Most successful FMCG brands advertise a lot and there is some sex appeal to most of them.
Soft drinks, cosmetics, food brands manage to create a halo effect around them and new entrepreneurs want to enter such extremely competitive categories.


The net result is a failed product with the huge amount of losses.

The sad thing is that most companies do not know when to quit and cut their losses.
They take “Never give up or never quit” saying to a new level and bleed to death.

3. All new product innovations are competition driven not consumer driven:


 If Surf carried on thinking other detergents are the competition, it would innovate less.
When the HUL brand started thinking of water and its quantum of use for washing as its competition, it moved ahead.
And the “do bucket paani bacchanal hai” campaign, a marketing innovation worked wonders for the brand. 

Most companies will launch a new product when competition heats up and they need to counter their moves.
Very rarely, FMCG companies are going to consumers to find out what they want.
So most of the time, it is brand extensions or new flavours.

For example, since wellness is the new flavour of the season- every self-respecting FMCG company is racing to launch new wellness products- Britannia, Parle, Pepsi, ITC and million others.

4. Marketing “Do-it-yourself “kits:

Who said Strategy is the King? Most of the new products launched have no real strategy.
Products are launched without any background category research.

Google is responsible for more product failures than anything else on the planet. If you type “how to do a heart surgery?” on Google, you will get 68.2 million results.

New entrants believe that Google can provide them with the basic strategy to launch new products and they do not need expert advice.
This thinking rarely works as every market and consumer is different.

 

5. Where is Innovation mindset?

 
Everybody knows that only two things will drive the future-people and innovation.
But very few companies follow any structured path to develop innovation mindset

At Kellogg India, for instance, every work week is kicked off with Monday breakfast meetings where employees come together to bounce off and thrash out new ideas and possibilities after experiencing first-hand what consumers are saying about and doing with their food. 

Harpreet Singh Tibb, marketing director, Kellogg India says that you’re better off treating innovation as an always-on approach.
“The innovation mindset comes from multiple experiences and exposures to all data sources and immersing yourself in those insights.”
Such as launching & marketing a large bowl of “Simply Pongal oats”.
India is the only Kellogg market to have a growing portfolio of savoury breakfast foods.

 

  1. Cultural Blunders

 As said earlier, Kelloggs did not understand the Indian culture but regained its ground by trying new things but above all by localising its offering and message to suit the market.
Pepsi would not have seen this coming their way in the Chinese market when they promoted their campaign with the tagline ‘Come alive with the Pepsi generation’. This slogan came out as ‘Pepsi will bring your ancestors back from the dead’.

Ford’s Pinto failed to make an impact in the Brazilian market. The reason behind its flop was the name ‘Pinto’ which translated to ‘small penis or tiny male genitals’ in Brazilian Portuguese slang.

Mitsubishi ‘Pajero’ also bit the dust as the sports utility vehicle faced embarrassment in Spain over its naming convention. The word ‘Pajero’ is slang for ‘masturbator”

 

 Here is the list of winners since 2012. Remember, the total numbers of launches were 16,914.

Brand Mother Brand Company Group
Kurkure Puffcorn Kurkure Frito Lay India Salty Snacks
Fab! Parle Hide & Seek Parle Biscuits
Godrej Expert Rich Crm Godrej Expert Rich Crm Godrej Consumer Goods Hair Dyes
Skore Skore TTK- PDL Condoms
Tresemme Tresemme Hindustan Unilever Limited Shampoos
Superia Silk Superia ITC Toilet Soap
Lifebuoy Clini Care Lifebuoy Hindustan Unilever Limited Toilet Soaps
Juzt Jelly Alpenliebe Perfetti Van Melle Toffee
All Out Ultra All Out SC Johnson Mosquito Repellant
Pepsodent Triple Clean Pepsodent Hindustan Unilever Limited Toothbrush
Colgate Super Shine Colgate Toothbrush
Spicy 1 Alpenliebe Perfetti Van Melle Toffee
2 Choco Eclairs Alpenliebe Perfetti Van Melle Eclairs
Londonberry Parle Parle Prod Toffee
Benadryl  Congestion Relief) Benadryl Johnson & Johnson Cough Syrup
Parachute Deep Nourish Parachute Marico Inds. Skin Creams
Cerelac Shishu Aahar Cerelac Nestle India Baby Foods
Panasonic Special Panasonic Panasonic Battery Ind. Batteries
Streax Streax Hygienic Research Institute Fragrance
Sensodyne Sensodyne Glaxo SmithKline Tooth Brush
Pepsodent Expert Protection Pepsodent Hindustan Unilever Limited Tooth Pastes
Rin Ala Fabric Whitener Rin Hindustan Unilever Limited Blues

Source: Nielsen Study

 

Failure gives you the proper perspective on success.
If you are not failing, perhaps you are not doing anything original or remarkable.

Failure is necessary to step to become “Awesome”

 

Fail Fast, learn fast, adjust fast, succeed Fast. 


 

 

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