In the harsh world of new products, success stories are few

April 17, 1995|By Bloomberg Business News

NEW YORK -- Ever try Bunuelitos, the fried pastry that was flavored with sugar and cinnamon? So few people did, General Mills Inc. ushered it to product heaven.

Ditto its individually wrapped Fingos cereal and Ocean Spray Cranberries Inc.'s Splash Sparkling fruit juice. And if you're addicted to Hershey Food Corp.'s refrigerated pudding, you'd best stock up on what's in the pipeline. In October, the company pulled the plug on the competition-squeezed Jello clone.

Going, going gone. Last year, a record 15,006 new products surged into the marketplace, up 14 percent from 1993, according to Lynn Dornblasser, editor of New Product News. And more new products invariably means more failed products, she said.

Ms. Dornblasser rarely tracks duds, though industry lore dictates that 80 percent to 96 percent of all new products fail. "Companies often make a loud clamor when their product

arrives," she said, "but there's not a lot of trumpeting when it departs."

Domino Sugar certainly ran no ads when it gave up the ghost on lump-free liquid brown sugar, nor did Procter & Gamble Co. when Rely tampons were linked to toxic-shock syndrome, or when some women found the alpha hydroxy compound in Oil of Olay's Visible Recovery line irritating. R. J. Reynolds snuffed out Premier after just five months, because the smokeless cigarettes smelled and tasted, well, funny, and proved difficult to light.

Though products fail quietly, their numbers speak in high volumes. Campbell Soup Co. laid its over-packaged microwaveable soup and sandwich meals, Souper Combo, to rest. Bic perfume went down in flames; McDonald's McLean up in smoke. McKids, the clothing chain partnership between McDonald's Corp. and Sears, Roebuck & Co., fell victim to a dowdy image and corporate bureaucracies.

In their all-out war for shelf space, marketers let consumers' attitudes drift out of sight, said Chet Kane, president of new-product specialists Kane, Bortree & Assoc. "Companies develop products based on their growth or competitive needs and not the consumer's needs," he said.

Clear beer is destined to fail, Mr. Kane said, because research has shown beer's golden color is integral to its perception as mellow and tasty. Miller Brewing Co. reformulated its clear malt beverage Qube to compete with Adolf Coors Co.'s Zima. Pepsico Inc.'s Crystal Pepsi was too different; its ads too diffuse and the need for colorless mouthwash is still unclear, Mr. Kane said.

Even though most "cloned" products fail, companies engage in what Mr. Kane called death-wish marketing, an instinctive knee-jerk rush to market what is often a virtual imitation of a successful new entry.

Mr. Kane, who is betting heavily against clones of fruit drinks, liquid soap/moisturizers, kids' frozen entrees and baking soda toothpastes, also predicted "brewers of ice and red beers will soon discover it pays to take the time to be different."

Some products die because they don't work, aren't in sync with the times or don't meet consumer expectations, said Robert McMath, director of the Ithaca, N.Y.-based New Products Showcase & Learning Center. Pillsbury Co. buried a chilled bread dough that burst out of its package. And Campbell Soup canned Fresh Chef because fresh translated into a short shelf life.

Microwave instructions might not have saved Kraft General Food Inc.'s Chicken Applause, Mr. McMath said, but the lack of them reduced its chances. Planters Corp. withdrew its vacuum pack because a few peanut nuts tried to grind the contents like similarly packaged coffee.

Mispricing often leads to missed opportunity. No matter how tasty, consumers wouldn't spend $4 to $7 for each of General Foods Corp.'s Culinova refrigerated dinners. Clorox Co.'s single-use (pricier) detergent pouches were washouts, as were Kimberly-Clark Corp.'s Once Over pre-moistened cleaning towels.

Old favorites sometimes stay that way by muscling out newcomers. Even though Nestle SA had licensed Walt Disney cartoon characters, its squeezable jelly, peanut butter, honey and pancake syrup fizzled in test marketing because category giants kept retailers loyal with increased display allowances and fees.

New products can also die of neglect. According to a survey by new-product consultants Group EFO in Weston, Conn., 65 percent of executives said new products aren't adequately supported by their companies.

With one-in-five odds, "failure" could be a misnomer for new products that are discontinued. For some, killing off brands is just part of the marketing process, and excising them early could prevent a more costly demise.

Still, marketers can be awfully impatient at times. "New products and babies don't look good at the bottom line in the beginning," Mr. Kane said. "They take time to mature and pay back dividends."

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