Success is never guaranteed when it comes to new products. Even with the best resources, extensive research, and an almost infinite flow of funds, products backed by big-name brands have, at times, failed miserably. The bidnessmen bring you a list of five famous products that came up short, due to blunders ranging from inappropriate advertising to faulty devices and misplaced priorities.
1) Lululemon Yoga Pants
Canada-based Lululemon Athletica (LULU) is a self-described yoga-inspired athletic apparel company that specializes in making yoga pants. In March 2013, Lululemon had to recall its Luon black yoga pants, priced at $98, after customers complained that the pants were too sheer. For fiscal year 2013, the retailer now projects net revenues to be between $1.605 billion and $1.61 billion, down from an already lowered forecast of $1.625 billion to $1.635 billion. Diluted earnings per share are forecasted to be between $1.94 and $1.96 for the year.
Lululemon’s CEO, Chip Wilson acknowledged that there might have been problems with quality control. Unfortunately, he also went on to suggest that the pants “don’t work on all women’s bodies.” According to him: “It’s really about the rubbing through the thighs, how much pressure is there over a period of time and how they much they use it.”
The company got a lot of bad press and Wilson resigned a month after making these controversial comments. However, as suggested by Canaccord Genuity (CF) analyst Camilo Lyon, the sheer pants issue is not likely to permanently damage Lululemon's brand image, and the current quarter will probably get a sales boost from pent-up demand for the pants.
2) Apple Maps
The original launch of Apple Maps in September 2012 was a monumental failure due to numerous glitches and flaws. It was so embarrassing that the company’s CEO, Tim Cook, had to publicly apologize for the app’s shortcomings. Apple (AAPL) had removed Google Maps as its default mapping app on the iPhone after Google (GOOG) refused to give Apple access to its voice-driven, step-by-step navigation.
Google had a ten-year head start on Apple in developing its application, during which time the search engine giant was able to collect extensive mapping data. Apple’s attempt to create a better mapping solution resulted in an app that left out entire cities, had incorrect addresses and misplaced landmarks, and often gave misleading driving directions. The app had numerous bugs despite the fact that the company had spent years preparing the shift to its own mapping system. It also acquired three start-ups to help with the development of Apple Maps, and formed a partnership with TomTom, a Dutch manufacturer of navigation systems. Tim Cook fired Richard Williamson, who was responsible for supervising the app’s development.
3) New Coke
The Coca-Cola Company (KO) took a huge risk in April 1985, when it decided to change the formula of its hugely successful soft drink by introducing a reformulated beverage called New Coke. Though the drink, later renamed as Coke II, fared extremely well in blind taste tests before the launch, consumers were not pleased when it was widely released. In short, it was a major marketing failure.
Consumers had developed a strong sentimental attachment to the original Coke, and did not want the formula changed. Coca-Cola was flooded with phone calls and letters. It started getting about 1,500 calls a day on its consumer hotlines, compared with 400 a day before the taste change. In July 1985, the company announced that the old Coca-Cola would be returning to the stores as Coca-Cola Classic. The decision resulted in improved sales.
4) Clairol’s Touch of Yogurt Shampoo
Proctor & Gamble’s (PG) Clairol product division released its Look of Buttermilk shampoo in 1974, which was unsuccessful, to say the least. Clairol, however, did not get the hint and continued experimenting with other natural ingredients in its hair products. While other shampoos of the 70s contained lemon, herbs, honey and fruit, Clairol next released its Touch of Yogurt Shampoo five years after the buttermilk shampoo. Unfortunately, it too failed to attract consumers. Yogurt might be good for hair, but consumers did not see it that way, probably because they associated yogurt with something to eat, and it also raised images of messiness. It certainly did not come across as something to apply on one’s hair. Needless to say, the product failed.
5) McDonald’s Arch Deluxe
McDonald’s (MCD) Arch Deluxe is one of the most expensive product failures in history - its ad campaign was worth $150 million. The burger, released in 1996, was marketed specifically toward adults. McDonald’s commissioned Executive Chef Andrew Selvaggio to create a new line of burgers, with a more sophisticated mustard-mayonnaise sauce. The promotional campaign took an unconventional approach by creating ads that did not talk about the quality of the food, but instead showed children looking at the burger in disgust, and complaining that it did not come with a toy. Directed at an adult audience, the ad ultimately backfired since showing children’s’ disgust toward the new burger did not make it seem very appetizing. It also took away from McDonald’s family-centered, child-friendly business. Consumers were also unhappy with the high price of the burger. Ultimately, it failed to catch on, and the burger was gradually discontinued.