CB Final - Quiz article: Why Great New Products Fail - answers

Key Reasons for New Product Failures

• Lack of sufficient marketing
• Customers don't recognize the product's value
• High production costs
• Poor product quality

Consideration for New Product Launches

• Customer desires for variety
• How customers make purchasing decisions
• The competitive landscape
• Production efficiency

Customer Product Information Collection

• Surveys and in-store visits
• Reviews and advertisements
• Search and inference
• Word-of-mouth and influencer marketing

United Airlines Aircraft Purchase Example

• Illustrated the importance of impulse buying
• Highlighted the length and cost of the search process
• Showcased the role of branding in B2B sales
• Revealed the impact of digital marketing

British Shower Manufacturer's Challenge

• Faced low product quality
• Customers were unaware of potentially better showers
• Customers showed little interest in water pressure

Customer Inference Situations

• Customers are more likely to use inference when the product is widely available
• When the cost of searching is too high
• When the product is a basic necessity
• When customers trust the product's brand

Brand's Role in Customer Inference

• Brand plays a crucial role in customer inferences

Search Less Likely with Expertise

• Customers with significant expertise are less likely to search extensively
• They often rely on pre-existing knowledge
• They may prefer new innovations
• They might have limited access to information

McDonald's Parking Lot Cleanliness Cue

• McDonald's used parking lot cleanliness as a cue to infer kitchen cleanliness
• This strategy aimed to create a sense of welcome and cleanliness for customers
• Reducing advertising costs was also a goal, as customer inferences reduced the perceived need for more advertising

Subconscious Factors in Customer Inference

• Advertising is a subconscious factor influencing customer inferences
• Store location is another such factor
• Visual factors like color also represent subconscious cues for customers to infer
• Parking lot cleanliness is also a subconsciously noticed factor

Potential Drawbacks of Inference for Quality

• Potential downsides to relying on inference for product quality include reduced sales, costly implementation
• Customers might misinterpret cues, leading to decreased brand loyalty

McDonald's Parking Lot Cleanliness Inference

• Customer inference about service speed and cleanliness of the restaurant
• Customers inferred restaurant quality and food quality based on parking lot cleanliness

Companies Innovating without Customer Perception

• Companies that overlook customer perception when innovating face risks
• Customers may not understand the innovation
• Costs of manufacturing might increase significantly
• Existing competitors might take advantage of the lack of customer awareness to launch rival products.
• Delays in product launch is another possible problem

Checker Shadow Illusion

• The "Checker Shadow Illusion" example highlights customers' struggle to realize that square A and square B have the same color
• These struggles show a lack in customer understanding of subtle differences

Brand Roles in Markets Without Search

• Brand plays a key role in markets where search is not easy
• Companies should provide direct comparisons to help customers
• Brands can serve as a quality signal
• Focusing on local advertising can enhance customer awareness

Internet Impact on Product Research

• The internet has significantly reduced the cost of searching for product information
• It allows for quick and easy access to product reviews, comparisons, and detailed information

Customer Search Likelihood

• Customers are more likely to conduct thorough searches when buying high-cost or important products
• They also search if purchasing low-cost or basic items

Reasons Why Customers Ignore New Products

• Customers may ignore new products due to their unfamiliarity with the products' features
• Limited store availability can also play a role in new product failure to gather customer interest
• New product's high pricing could discourage customers from purchasing

Key Focus to Increase Product Success

• Companies should focus on helping customers recognize the product's value
• Expanding product lines
• Reducing product costs

Aqualisa Shower System Example

• Illustrates the importance of customer awareness of product improvements
• Effective advertising highlighting improvements can promote sales

High Costs Lead to Product Failure

• High costs can lead to product failure because they make product less appealing to consumers
• Innovative products should be visually appealing to consumers

Achieving Higher Sales

• Customers recognizing product greatness is likely to lead to achieve higher sales
• This can be done through good marketing strategies

Brand Diminishing in Customer Decisions

• Easily accessed product info can decrease the importance of brand
• Expensive products may also lessen the importance of brand in customer decisions

Inference about Unseen Product Features

• Customers use visible cues and brand reputation to infer about product features

Impact of Search to Inference Shift

• Shifting from search to inference makes customers more inclined to buy expensive products
• They may not recognize innovative product features when relying on inference

Questioning Customer Product Acceptance

• Companies can predict customer acceptance of a new product by checking if customers are motivated to search for a solution
• If customers are looking for a solution, then the product could be appealing to them
• Asking if the product is appealing to younger consumers can also indicate whether the product appeals to a wider audience
• Assessing whether the company will feature the product in stores is crucial, too.