What percentage of new products fail and why?

by | May 3, 2017 | MarketSmart Newsletters

What percentage of new products fail and why

I found these answers to “how many new products fail?” using a quick Google search:

  • According to Harvard Business School professor Clayton Christensen, each year more than 30,000 new consumer products are launched and 80% of them fail.
  • 30,000 new consumer products are launched annually, 95% of them fail
  • The failure rate for new products launched in the grocery sector is 70 to 80 percent, according to Inez Blackburn of the University of Toronto.
  • Ask anyone what percentage of new products fail. The usual answer is somewhere between 70-90 percent.
  • It’s a bit scary to hear the Nielsen statistic that more than 85% of new CPG products fail.
  • 95% of new products introduced each year fail.
  • Up to 80% of new product launches in the consumer packaged goods (CPG) industry fail.

Based on the above findings, I think it’s safe to settle on about 80%.

The next obvious question is what causes 80% of all new products to fail. A Harvard Business Review article written by Joan Schnieder and Julie Hall states, “The biggest problem we’ve encountered is lack of preparation: Companies are so focused on designing and manufacturing new products that they postpone the hard work of getting ready to market them until too late in the game.”

I find that both surprising and hopeful. Surprising, because I would have guessed the main reason for failure was that people just didn’t want the product. Hopeful, because if marketing is the problem, it can be fixed.

Let’s look at fixing marketing through the lens of the four Ps of the marketing mix as they relate to preparing a product for launch: Product, Price, Place and Promotion. Product doesn’t seem to be an issue. It looks like companies spend plenty of time on research and development. Pricing takes no time “time to prepare” so that’s not an issue. That leaves Place (distribution) and Promotion.

Now let’s consider the push and pull strategies. The pull strategy is particularly useful for new products because it affects both distribution and promotion.

The push strategy is about providing incentives to distributors who can get your product in front of consumers. For instance, a retail store might be interested in buying an entire pallet of a new brand of tortilla chips if they are given a free bass boat in which to display them. Consumer awareness is created at the point of purchase. The problem is that push strategy tactics do little to educate consumers about the product. Stacking a product pyramid in the middle of an aisle may get the customers’ attention, but it does little to build their understanding of what the product can do for them. It can work for simple products such as tortilla chips but not for products whose benefits need to be explained. Which is yours?

The pull strategy, on the other hand, creates demand directly with consumers so they go to the store and ask for the product, thus pulling your new product into the distribution channel. We inadvertently did this when we were helping launch Breathe Right nasal strips, a product that needed to be explained. Breathe Right had limited geographical distribution and we were arranging media coverage only in those areas. One of the stories we arranged happened to get picked up in a few states where they didn’t have distribution. You can guess what happened. Consumers began going into stores such as Target and asking for the product. Naturally, Target was quick to react and the product was pulled through the distribution channel.

Retailers are keenly aware they need to stock a product when customers began asking for it. We’ve had many clients sign large contracts for us to arrange media coverage, just so they could show those contracts to retailers like Walmart and Target as they pitched them on carrying their new product. I’m not in those meetings so I don’t know the affect it has, but I know that’s what they are doing.

If you could just push a marketing button for your new product launch, the best thing that could happen is that every consumer suddenly became educated about the product. Most CEOs believe that if everyone just knew about their new product, they would buy.

Educating your market all at once is unrealistic but you’ll need to start somewhere. It makes sense to use promotional mix channels such as media coverage where you have the time and space to tell a persuasive story, first to the early adopters and then the early majority. Once you’ve won over the early majority, you’ve got some serious brand traction.

Media stories are a great way to reach and teach the masses. That’s because product publicity is relatively low cost compared to other mass promotion techniques. And while a product is new, it’s especially newsworthy.

Nothing creates more excitement than media buzz, both with customers and within a company. Everyone loves good media coverage. And today, social media channels can extend the life of your coverage every which way to Sunday.

Here’s a simple way to write a marketing plan for your new product. I think you’ll find publicity will play an important role. First, figure out who your market is (submarkets if you have them). Then for each one, write down the main reason people buy and also why they should buy your product rather than the competition. Next consider your promotional mix: what blend of Publicity, Ads, Website, Social Media and Personal Selling will give you the most bang for your buck. Finally, schedule your primary value points (the reason your market(s) should buy from you) and which channel you’ll use, on a 12-month calendar. Notice you aren’t dealing with how you will creatively produce your promotions. You are just developing a one-year marketing plan that cycles through your main messages using the most cost-effective promotional mix channels. The creative work can be done as the plan is executed.

Your aha moment will come when your realize how little budget you have compared to all the reaching and teaching that needs to be done. You’ll just have to keep scaling back until your plan fits your budget.  

I’ve described this process in a book I’ve written, “The CEO’s Guide to Marketing; the book every marketer should read before their boss does”. It’s being printed right now but I can give you access to a PDF if you would like.

There are two reasons you should get in touch with us. First, no one arranges more product news stories than we do. We’ve been persuading reporters and producers (both traditional and online media) to do stories about our clients’ products for 30 years. We’ll know how to get your new product the attention it will need.

Second, we’ll give you immediate access to my new book. I’ll let you look at a free PDF version until the printed version is out. 

Many of our 90-plus clients have been with us for years, some for decades. There is only one reason clients come to an agency and that’s to increase their sales. You should call and strike up a conversation with us. Give Becky Quesnel a call at 952-697-5269. She is our office manager and can put you in touch with the right person.


Written by Lonny Kocina

Written by Lonny Kocina

Lonny Kocina is the CEO and Founder of Media Relations Agency which has been in business for nearly 35 years. During that time, Kocina also founded and sold two other businesses: Mid America Events and Expos, and Checkerboard Internet Services. Prior to that, Lonny worked as a marketing director for Investment Rarities Inc., a company with sales over 4 billion dollars. Kocina has also been a long time member of Vistage International which is a CEO peer mentoring organization. He was also a volunteer marketing mentor for Junior Achievement and the Carlson School of Business. For fun he has taught Principles of Marketing at the college level, and his recent book, the “CEO’s Guide to Marketing” is an Axiom Business Book silver medal winner as well as an Amazon bestseller. Lonny likes to kid that his third grade teacher may have summed him up best with a note sent home on his report card. “Lonny is a daydreamer and he’s getting worse each day. He complains of a stomach ache a lot and I don’t think he likes school much either.”


What We Do

  • Publicity

  • Website

  • Advertising

  • Social Media

  • Creative

Contact Us

If you want your product to become famous.

Recent Posts

3 reasons to choose an experienced PR company

You wouldn’t trust a roofing company to design and build your home. While they may know their way around shingles, they probably have little-to-no experience in the other crucial home construction elements. Likewise, why trust an inexperienced agency to build and...

Product marketing checklist

For just about any product marketing campaign, it makes sense to collaborate with a marketing agency that’s a one-stop shop. That’s the easiest way to ensure all tasks are covered and accomplished. You’re also not losing money and momentum by hiring different agencies...


Pin It on Pinterest