The more something gets hyped before its introduction, the bigger the potential fall if it fails to deliver.
That has been especially true in the entertainment world, where Internet buzz can create a huge sense of anticipation for a film like Snakes on a Plane that magnifies its failure when it does not live up to the hype. It happens in the sports world, too, where today's star-of-the-future can become tomorrow's where are they now (I'm looking at you Freddy Adu).
Products are not immune from this, and the desire to bring attention to a new launch can backfire when the product does not live up to the hype. This can happen to great companies that make huge missteps, and some of the worst product launches of all time belong to some of our best-loved brands.
Coca-Cola: New Coke
In 1985, Coca-Cola (NYSE:KO) decided to drop the formula it had used for nearly 100 years and replace it with what would become knows as "New Coke." The change was met with what could politely be called consumer outrage. People rejected the new formula and angrily demanded the company return to the old recipe.
Though many have theorized that the New Coke debacle was engineered by the company with the idea that the classic formula would ultimately make a triumphant return, company executives have always insisted that was not the case.
"We set out to change the dynamics of sugar colas in the United States, and we did exactly that -- albeit not in the way we had planned," then chairman and chief executive officer Roberto Goizueta said in 1995 at a special employee event honoring the 10-year anniversary of "new Coke."
As ill-advised as changing the formula seems in hindsight, it was not as reckless a decision at the time. The company's flagship product had been losing market share for 15 years, and the new formula was preferred in taste tests of nearly 200,000 consumers, according to a company-produced story. "What these tests didn't show, of course, was the bond consumers felt with their Coca-Cola -- something they didn't want anyone, including The Coca-Cola Company, tampering with," the company wrote.
When New Coke was launched, consumers began hoarding bottles and cans of the original recipe and ignoring the new product. This forced the company to bring back "Classic Coke" less than three months later. New Coke did stay on the shelves, eventually becoming Coke II before it eventually disappeared in the United States for good (though the formula is used in other parts of the world).
Microsoft: Windows 8
Sometimes it's not sales figures but public sentiment that decides whether a product launch has failed or succeeded. When Microsoft (NASDAQ:MSFT) introduced Windows 8 in October, 2012, it hoped the new operating system would change how people used their computers.
It was a good idea that was mostly well-executed, but it was widely rejected by the public for reasons that became obvious. Windows 8 dropped popular features from the OS, most notably replacing the traditional start screen and menu with an icon-based interface that was reminiscent of the launch screen on a tablet or smartphone. The thinking at the time (and I worked at Microsoft as a vendor editor on the Windows 8 News and Finance apps before and during the launch) was that computing was moving to a touch-based world.
That might eventually be true, but the timing of that change was not in line with the Windows 8 launch, leading to a product that was not well-suited for many of the people actually using it. That led to slow adoption rates, and people even sticking with Windows XP after the company stopped supporting it with security updates just to avoid Win8.
Brad Reed of BGR.com explained the failure in a 2014 opinion piece:
It's not just that the new platform is different but that it can be ridiculously unintuitive for desktop users. How do we know that Windows 8 is an unintuitive mess for desktop fans? Largely because Microsoft is going out of its way to make the platform much more friendly to desktop users who have felt alienated by the changes the company has made.
Windows 8 was launched with a huge marketing campaign, but it was obvious fairly quickly that consumers were rejecting it. The company triaged the problem by returning some popular features in the Windows 8.1 free update, and then admitted its failure with the announcement of its new OS.
By naming that product Windows 10, new CEO Satya Nadella tacitly acknowledged that 8 was such a debacle that Windows 9 would be skipped just to create symbolic distance. Windows 8 played a large part in former CEO Steve Ballmer losing his job, and had the company not changed its course with Windows 10, it could have ended one of the most profitable franchises in technology history.
McDonald's: The Arch Deluxe
McDonald's (NYSE:MCD) has had a number failed products that were contenders for this list (with the McDLT being a close second), but its biggest disaster was 1996's Arch Deluxe. An attempt to win over older customers, the sandwich was marketed as the "Burger with the Grown-up Taste." Commercials for it showed kids shunning the supposedly sophisticated burger, which was somehow supposed to make it appeal to adults.
There were two major problem with that, detailed on the Marketing91.com website:
- The trouble was that nobody goes to McDonald's for sophistication, they go for convenience. Part of this convenience is knowing exactly what to expect. Most people who walk into a McDonald's restaurant know what they are going to order before they reach the counter. They don't want to be bombarded with a million and one variations on what is essentially the same product -- a hamburger.
- The other problem with the Arch Deluxe was the fact that it was sold on taste. Everybody knows that McDonald's is never going to be awarded a Michelin star, yet everybody still comes back.
Arch Deluxe was a bad idea that was poorly executed. It also cost more (about $2.29) than the company's existing premium burger, the Big Mac (around $1.90 at the time), meaning it had to be sold to consumers hard, which McDonald's attempted to do with a $100 million ad campaign.
"The burger's failure was so monumental that McDonald's completely reversed its strategy of introducing pricier items," wrote 24/7 Wall Street. "In 1997, the company released a 55 cent Big Mac and tried other dramatic price cuts."
Like many of its other failures, Arch Deluxe simply fell off the company's menu, never to return (though a variant of it is still sold in France). It could be argued that its failure did not teach the chain much. Since the Arch Deluxe debacle, the Golden Arches has tried a number of other premium offerings including, but not limited to, the Steakhouse Sirloin Third Pound Burgers, Angus burgers, various Bacon Clubhouse sandwiches, and many more.
Daniel Kline owns shares of Microsoft. He has not had a McDonald's burger in years, and he liked Windows 8. The Motley Fool owns shares of Microsoft and has the following options: long January 2016 $37 calls on Coca-Cola, short January 2016 $43 calls on Coca-Cola, and short January 2016 $37 puts on Coca-Cola. The Motley Fool recommends Coca-Cola. Try any of our Foolish newsletter services free for 30 days.