What Is Product Failure? Definition and Prevention Tips

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What Is Product Failure

Introducing the Product Failure Chronicles: A Tale of Innovation Gone Astray. 

Triumphs and successes are often celebrated in the ever-evolving product development landscape and consumer demand. Still, the path to innovation starts with its fair share of failures. 

Innovation begins with the desire to bring groundbreaking ideas to life, captivating the hearts and minds of consumers worldwide. However, not every concept can withstand the test of time or meet the ever-changing needs of a demanding market. 

Let’s learn more about product failure, its causes, and how to prevent it. 

What Is Product Failure?

Product Failure definition

Product failure refers to a situation where a product does not meet the expectations or requirements of its intended users or fails to deliver its intended functionality. It occurs when a product does not perform as intended, does not satisfy customer needs, or experiences significant issues or defects that prevent it from fulfilling its purpose effectively.

Causes for Product Failure

There can be several causes for product failure, including:

Design Flaws

Poor product design or engineering can lead to functional or performance issues, making the product ineffective or unreliable.

Manufacturing Defects

Errors or issues during the manufacturing process can result in faulty or substandard products that don’t meet the required quality standards.

Lack of Market Demand

If there is insufficient market demand for a product, it may fail to generate sales and ultimately be considered a failure.

Inadequate market research

Insufficient or inaccurate market research can lead to a product that doesn’t meet the needs or preferences of the target market.

Poor Marketing and Promotion

If a product is not effectively marketed or promoted, potential customers may be unaware of its existence or benefits, resulting in low sales.

Competitive Factors

Intense competition from similar or superior products in the market can cause a product to fail, particularly if it fails to differentiate itself or provide a unique value proposition.

Pricing Issues

If a product is priced too high or low relative to its perceived value or market competition, it may fail to attract customers or generate sufficient revenue.

Lack of Product Differentiation

If a product does not offer unique features or advantages compared to existing products, customers may not see a compelling reason to choose it, leading to failure.

Poor User Experience

If a product is difficult to use, has a steep learning curve, or lacks intuitive features, it may fail to gain user adoption or satisfaction.

External Factors

External factors such as regulation changes, shifts in market trends, or unforeseen events can also contribute to product failure.

Impact of Product Failure on Businesses 

Financial Losses

Product failures can result in direct financial losses for businesses. Companies invest significant resources in developing, manufacturing, and marketing their products. If a product fails to meet all the customer expectations or malfunctions, it can decrease sales and revenue. 

Additionally, businesses may face expenses related to product recalls, repairs, or legal liabilities if the failure causes harm to customers. 

Damage to Reputation

Product failures can damage a company’s reputation, which is crucial for attracting and retaining customers. When a product fails to act as it is expected or causes harm, it erodes customer trust and confidence in the brand. 

A damaged reputation can make it difficult for the business to regain the trust of existing customers. It may deter potential customers from further engaging with the company or its products.

Loss of Customers

Product failures can lead to a loss of customers, both in the short and the long term. Dissatisfied customers will likely switch to competing products or brands, seeking alternatives that better meet their needs and expectations. 

Furthermore, disappointed customers may share their negative experiences with others, impacting the company’s customer acquisition efforts. The loss of customers affects current sales and reduces the potential for repeat business and long-term customer loyalty.

Examples of Biggest Product Failures 

New Coke

One of the biggest product failure examples is that of New Coke. The Coca-Cola Company introduced New Coke, a reformulated version of its popular soft drink. 

However, the new flavor gave a widespread public backlash and negative feedback from consumers who preferred the original taste of Coca-Cola. The company eventually brought back the original formula as Coca-Cola Classic.

Google Glass

Google Glass is a wearable smart device with an optical head-mounted display. It was introduced in 2013 with much anticipation but failed to gain mainstream popularity due to concerns about privacy, high cost, and limited functionality. 

Google halted consumer sales of Google Glass in 2015, although it has found some applications in specialized industries.

The Segway

The Segway is a self-balancing personal transporter introduced in 2001 with significant hype and anticipation. However, it failed to meet its expectations and achieve widespread adoption. 

The high price, limited practical use, and regulatory restrictions in many areas contributed to its commercial failure as a mainstream mode of transportation.

How to Prevent Product Failure

To prevent product failure and design a product that meets a real need, there are several important steps you can take:

  • Conduct thorough market research to find gaps and know the needs of your target customers.
  • Involve potential customers early in the design process. Gather feedback through surveys, focus groups, or beta testing to ensure your product meets their needs and expectations.
  • Avoid over-engineering your product. Keep the design simple and intuitive, ensuring that it’s simple to use and can meet your target market’s requirements.
  • Price your product in a way that provides value to customers while also ensuring profitability for your business.
  • Develop a comprehensive marketing plan that targets your key customer segments. Communicate your product’s unique features and benefits through various channels such as advertising, social media, content marketing, and public relations.
  • Build a skilled and motivated sales team that understands the product and its value proposition. Provide them with the required pieces of training and resources to effectively promote and sell the product.
  • Stay informed about your competitors’ products and strategies. Monitor their strengths, weaknesses, pricing, marketing efforts, and customer feedback. This information can help you find opportunities for differentiation and improvement.
  • Be aware of external factors impacting your product’s success, such as technological changes, regulations, market trends, or economic conditions. Adapt your product and strategies to stay relevant and address potential challenges or opportunities.
  • Collect and analyze customer feedback after the launch and use it to search for improvement and innovation areas.


What is the product failure rate?

The product failure rate refers to the percentage or proportion of products that fail to meet the desired performance criteria or customer expectations within a given period or under specific conditions. 

The actual failure rate can vary widely depending on various aspects such as the industry, type of product, complexity, quality control measures, and market demands. Providing an exact or universal failure rate is challenging as it differs across industries and product categories.

Why do 95% of products fail?

The statement that “95% of products fail” is often cited, but it is a widely debated and misunderstood statistic. While it may appear alarming, it is essential to clarify what “product failure” means in this context.

The claim that 95% of products fail typically refers to new consumer packaged goods (CPG) introduced in the market. However, this statistic is often misinterpreted. It does not mean that 95% of products disappear entirely from the market or are all commercial failures. 

Instead, it suggests that a significant portion of new products introduced into the market do not meet their sales targets or fail to achieve the expected level of success.

Is product failure normal?

Product failure is a normal and inherent part of the business landscape. Launching new products always carries a level of risk, and not all products can achieve the desired level of success. 

It is important to identify that failure is not necessarily a reflection of incompetence or poor business practices. Instead, you can see it as a chance for learning and improvement.

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