It’s estimated that around 70–90% of new products fail after being introduced to the market. Why do so many new products end in failure?
My initial, spontaneous response to this question seemed fairly obvious:
- The product doesn’t offer new or additional value for the consumer or end user, meaning it doesn’t stand out from the many similar alternatives on the market.
- There’s a weak product strategy—even if the product is truly innovative. This can include incorrect or missing positioning, lack of marketing support after launch, inappropriate distribution channels, or the wrong price.
However, after deeper reflection, I’ve noticed that in the case of established companies, these causes are more like symptoms—the outcome of something much more fundamental, rather than merely a matter of marketing. The root of the problem lies in organizational culture: how marketing is understood, the role it plays, and the overall attitude towards it (for instance, what people in sales or production say about marketing during informal coffee break chats).
Who has the greatest influence on this culture?
In my view, the answer is clear: company owners or CEOs.
What I’ve observed is that some of them perceive marketing solely as a tool for implementing their own ideas or the ideas of those they see as directly delivering tangible benefits—often the sales team. Salespeople, being in direct contact with the market, frequently suggest new product ideas based on what’s selling well. They push for similar products, hoping to boost sales and meet their individual targets. While this may bring short-term benefits—filling the sales pipeline—it seldom leads to long-term success.
This dynamic can lead to a common organizational mindset: “To grow, we need more new products!” Often, this approach is justified with statements like, “We have to be innovative.” Because it sounds logical and aligns with current trends, only a few dare to raise a hand and question this quantitative approach.
As a result, the marketing department becomes entangled in a race for as many new products as possible. Unfortunately, this creates a vicious cycle: the more new product failures there are, the greater the pressure to introduce even more new products. And nearly none of them receive the proper strategy or support crucial for success.
I’ve noticed an interesting correlation between a company’s marketing budget level and the number of new products it introduces each year. Companies that allocate a higher percentage of their revenue to marketing focus on building strong brands, which they see as the key driver of sales growth. They launch fewer new products, but support them with well-thought-out strategies and adequate resources. Conversely, companies with smaller marketing budgets often adopt a quantitative approach, emphasizing rapid new product launches as their main growth strategy. This reflects the belief that “new products are the key to sales growth” but often relies too much on quantity, rather than quality or true innovation.
The important takeaway here is this: lasting success in new product development isn’t about increasing the number of new products; it’s about building a culture in which marketing is valued as a strategic driver of growth, and decisions are made based on fact-based analysis and sound strategies, rather than opinions and short-term sales pressures.
Finally, one critical insight that’s always worth remembering:
The biggest dilemma for today’s consumers is having to choose, not dealing with empty shelves.
