New products fail at an alarming rate because the “prevailing models of segmentation and brand building” are all wrong, write Clayton M. Christensen, Scott Cook and Taddy Hall in The Wall Street Journal (11/29/05). “Carving up markets by product, price point or customer type” results in “products overloaded with unwanted features” or that “are designed to improve on a product or appeal to a demographic profile — but not necessarily real customers.” No wonder, then, that “of the 30,000 new consumer products launched each year,” more than 90 percent fail. Reason is, “a simple rule has been forgotten. To build a product that people want, you need to help them do a job that they are trying to get done.”
Well, duh. Clayton, Scott and Taddy call such products “purpose brands” because they are “so tightly associated with the job they perform that they become inextricably linked to it. They say that “most of today’s successful brands,” which they identify as “Crest, Starbucks, Kleenex, eBay and Kodak … started out as purpose brands. FedEx, too. In that case the brand was built to do a job that “had existed practically forever,” and that others had failed to deliver against.” And it “was not built through advertising. It was built as people hired the service and found that it got the job done,” absolutely, positively, overnight. “Purpose brands create enormous opportunities for differentiation, premium pricing and growth,” say Clayton, Scott and Taddy.
However, they caution that “there are only two ways to extend brands without destroying them: Marketers can apply the brand to different products that address the same job. Or they can apply the brand do endorse the quality of products that do other jobs and create new purpose brands that benefit from the endorser quality of the original brand.” Marriott, for example, initially “built its hotel brand around full-service facilities that were good to hire for large meetings.” It then applied its brand equity to various other jobs: Courtyard by Marriott for “a quiet place to get work done,” Residence Inn by Marriott for "longer-term travelers," for example. Because the extensions do their jobs well, they "actually reinforce the endorse qualities of the Marriot brand" even though they don’t necessarily look and feel like the flagship brand. That, they conclude, is the best way to "reverse the death spiral of new product failure" and grow your business. ~ Tim Manners, editor