Top 10 Reasons for New Product Failure

This article presents reasons why only 10-20% of new products and services succeed.

This article presents reasons why only 10-20% of new products and services succeed.

Marketers know that they’ve got to keep a steady stream of new products and/or services flowing—if for no other reason than to keep up with the competition. As circumstances, needs, wants, and trends change, no one wants to get left behind. At the same time though, marketers also know that innovation these days is pretty risky business.

In Winning at New Products, author Robert Cooper estimates that about half of all resources allocated to “product development and commercialization” in the U.S. goes to products that a firm cancels or produce an inadequate financial return. In packaged goods, for instance, IRI calculated that less than a quarter of the new products introduced in 2008 broke the $7.5 million in sales mark their first year of availability and less than one-half of 1% earned more than $100 million in sales. Though estimates of new product and service failure rates vary widely by company, category, industry, and reporting agency, the best-case-scenario chances of introducing a successful new product or service don’t get much better than 50-50.

Through our own work with companies across different industries, we found about 10%-20% of new products and services succeed, which by our definition means they remain in the market generating profits for the company three years after introduction.

Why has success proven so elusive to so many?

Here’s our top 10 list of reasons new products and services fail:

  1. Marketers assess the marketing climate inadequately.
  2. The wrong group was targeted.
  3. A weak positioning strategy was used.
  4. A less-than-optimal "configuration" of attributes and benefits was selected.
  5. A questionable pricing strategy was implemented.
  6. The ad campaign generated an insufficient level of awareness.
  7. Cannibalization depressed corporate profits.
  8. Over-optimism about the marketing plan led to a unrealistic forecast.
  9. Poor implementation of the marketing plan in the real world.
  10. The new product was pronounced dead and buried too soon.

For more on what you can do to avoid these common pitfalls and make innovation a more profitable exercise, take a look at Innovation Needn't Be Such a Scary Proposition For Marketers.

-January 2010

This content was provided by Copernicus Marketing Consulting and Research. Visit their website at

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