Why FMCG Brands are Failing?

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 more than 99.9 % brands are failing?

There are 5 key reasons, why brands are failing:

1. Companies believe that Research is a waste of money:
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.
Unless this mind set will change- we shall continue to have such high failure rate.
2. 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 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 never quit” saying to 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 bachana hai” campaign, a marketing innovation worked wonders for the brand.

Most companies will launch 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 flavors.

For example, since wellness is the new flavor of the season- every self respecting FMCG company is racing to launch new wellness products- Britannia, Parle, Pepsi, ITC and one 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 or any consumer data.

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 entrance believe that Google can provide them with 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? 
Every body 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’s 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.” Or a large bowl of Simply Pongal oats. India is the only Kellogg market to have a growing portfolio of savoury breakfast foods.

Here is the list of winners since 2012. Remember, the total number 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

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