Why Products Fail

 

INC.: Yes, but only if your marketing program is effective at bringing the product to the user in the first place.

MAIDIQUE: Remember that marketing has to encompass the definition of what a product is. Marketing is not just promotion, sales, and advertising, marketing also includes product planning. When I start my course on marketing at Stanford, the first thing I say is: "Any engineer who does not see himself as a marketer is not doing his job."

INC.: Why?

MAIDIQUE: Because part of an engineer's role is to make design trade-offs, and every time an engineer makes a design trade-off, he is doing a marketing job, if not a general management job. So marketing starts with the definition of product characteristics, and often engineers unwillingly take that into their own hands without realizing the enormous impact that will have on the overall business. The tendency of technical people is to achieve technical performance for performance's sake; that leads to journal articles, but it doesn't necessarily lead to successful products. You can't go in saying, "Well, we've got s super-fast technology, and obviously speed's going to do a lot for this guy, and if he realizes this, then he'll pay us these wonderful prices for our product." You've got to go in and say, "What's your business all about? What are you doing? What do you need? What is it in the market that you'd like to see that isn't there?"

INC.: What about market surveys? Were your successful products often launched on the basis of more formal research?

MAIDIQUE: The people who learn the most about your customers through an externally conducted market survey are the people who conduct the survey. I think that market surveys are useful in two circumstances. First, if you want to get an aggregate idea of where a market is going and how big it might be. Second, if you already have an established market, say, selling cereals, and you want to know whether increasing the sugar content of your product by 2% will turn the market on or off, and whether that cost is justified within a particular market segment. So tests can be worthwhile with huge, already existing, and gradually growing markets, not with markets that are very new. The best survey for that kind of rapidly changing market is for a group of people from the company -- including the management people who are going to make the decisions -- to go out and sit down with three or four customers for a period of two or three days. You can't beat that, particularly if those customers are lead customers, customers that are doing today what the industry is going to do a few years later.

INC.: One of the most provocative points in your study is your stress on the value of failure. What is it about failure that contributes to success?

MAIDIQUE: I think that one of the best ways to learn is to fail. People who are successful often don't know why they're successful, and all of a sudden they run into a situation that's different from what they have been in, and they're surprised to find out that they've failed. People who have failed a couple of times know where the weak links are and know exactly what are the things that must be avoided. After you fail, you tend to dwell on the failures and do everything you can to compensate for them, but if you're very successful, you tend to say, "Hey, I'm just absolutely great, and I'm going to succeed no matter what." So I think failures have a way of indelibly creating in your mind traces that prevent you from failing again in the same manner. Whereas successes often encourage you to fail by decoupling you from reality, creating illusions of what reality really is.

INC.: Still, no one shoots for failure. Is there any single lesson that companies can learn that might help them launch a new product successfully?

MAIDIQUE: There is no single thing that can guarantee product success. But the things that cause product failure are several, and, thank God, they're almost all malleable; they respond to managerial practices. A new product begins either as an unfelt need or as a requirement of your customers. It starts as an idea. Then it has to be taken by your marketing or engineering staff and turned into a blueprint for action, then into a prototype, then into a product that can be manufactured and that the company can sell. For all that to happen, there's an enormous amount of communication that needs to take place among many constituencies -- customers, engineering people, manufacturing people, and marketing people -- each with different goals, backgrounds, and cultures. Integration of those different constituencies is essential because cultures typically tend to block the new, and by definition a new product requires new procedures, new organizations, and new pecking orders. It will inevitably destroy some of the status quo. So, in order to do that, you need managerial power to make those changes as easy as possible, to integrate those various cultures and make sure they communicate.

There is no one single way to accomplish all that; there is no way to take out the risk. Niccolo Machiavelli acknowledged that centuries ago in The Prince: "There is nothing more difficult to plan, more doubtful of success, nor more dangerous to manage than the creation of a new system." But you need to take those risks in order to succeed. You not only have to do the right thing, you have to do the right thing right.

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