Companies are constantly exploring new concepts for products.
Sometimes, those concepts are axed way before the product is mass produced, for various reasons.
Then there are times when a product hits the shelves, outraging consumers.
In a recent example, Walmart recalled Great Value’s Juneteenth ice cream, meant to celebrate the federal holiday commemorating the emancipation of enslaved African Americans in the United States. Consumers weren’t having it: literally and figuratively. The company apologized and quickly listened to consumers, pulling the product from shelves.
But this isn’t the first product mishap you’ve likely read about, and it likely won't be the last.
ASU News wanted to understand more about the strategy and review process for products that make it to market by enlisting the help of Charles (Bret) Giles, a professor of practice at Arizona State University's W. P. Carey School of Business, whose areas of expertise include branding and marketing.
Question: Sometimes companies miss the mark on new products. How does this happen when so many eyeballs have been on the product from development to marketing to release?
Answer: Most product launches fail. In fact, depending upon your source, 70 to 95% of new products fail to reach viability.
The product management and marketing process is different among companies, and some of the most significant differences stem from when consumer feedback is introduced in the process, as well as the type of feedback that is derived from those consumers.
Breaking this down, companies that involve consumers in their process late or not at all — and there are plenty that release products with absolutely no feedback from the ultimate users of the product — are more likely to face a situation where the mark is missed and a launch is unsuccessful. Conversely, those companies that involve the consumer early and often in the process are more likely to succeed, particularly when using both qualitative and quantitative research in uncovering product viability.
In other words, if a company interviews those people it intends on serving and becomes educated around what they need and want in their lives, a company can then learn if the new product actually fulfills the “job” the people are “hiring” you to do. If so, a company can then use that information to create surveys that quantitatively measure a broader group of people with statistical significance.
Q: With social media, it seems like the complaints are more amplified. How do companies decide when it’s time to recall a product because it’s controversial/offensive? What’s the threshold?
A: Generally speaking, marketers welcome amplification of a product message from consumers, as it extends any promotional work the company itself might be doing and at the same time is more credible. That means when a product is released that is seen as offensive or controversial, the exact same thing can happen in a negative way to the company.
But is it necessarily negative, or is it a way to learn, take immediate action and pledge to do better the next time? The time to recall a product that is insensitive or offensive is not based on a formula. It comes from a company acknowledging the product doesn’t align, not only with the values of its consumers, but also with the values of the company itself. It should be a very easy decision to recall a product, but just as people vary in their effectiveness of apologizing for insensitive remarks, so too do brands and companies.
If we look at Walmart and their response to the Juneteenth ice cream flavor they inappropriately introduced, it was swift, it took full responsibility and it offered immediate action. That is really all people on social media could logically expect from a company, even if those people continue to discuss it negatively in open forums. But usually, if the apology is genuine and not performative, people respond accordingly and the matter is out of the social media fray rather quickly.
Continuing on with this example, this course of action should have been an easy decision for Walmart because it completely aligns with who they are as a company. Over 21% of the Walmart workforce is Black and African American, and over one-third of its management are people of color. Years ago, they started a Center for Racial Equity and have committed $100 million in donations to address racial disparities in the United States. In 2021, the year before the ice cream gaffe, they donated $14 million of those funds to such organizations.
Basically, if a company knows what it stands for, it is easy for it to look inwardly and acknowledge its missteps when social media influencers and users call it out. The action it takes at that point, if swift, genuine, apologetic and acknowledging of its own misstep, will usually go a mile in how the brand is perceived ongoing with consumers.
Q: What kind of checks and balances exist in companies to test whether a product will be well received or be controversial? Does this process vary, and is that part of the problem?
A: Most companies complete some sort of consumer testing prior to the launch of a product or a product extension — another product within the same brand or family of products. This research could be qualitative or quantitative, or both, depending upon the significance of the product to the overall company. In most research, a company would be interested in determining product market fit; that is, how well consumers would receive a product and change their existing behavior to give it a try. If research shows the product will not be well-received for a multitude of reasons, the company might rethink the product before introduction, scrap the product altogether or continue with the launch of the product regardless of the research findings.
If the research does not ask the right questions in the first place or if the company opts to ignore findings they don’t want to hear, the checks and balances that come with consumer research are significantly nullified. While I believe most companies do some sort of research prior to product introductions, the quality and amount of that research varies considerably, which can lead to products making it through a process that really should never have been introduced in their current form.
I might add that sometimes a company does everything right but still a product that is introduced has an unexpected consequence. This is where a swift, genuine and action-oriented response by the company can really pay off.
Q: How badly will a company’s brand suffer if it releases a controversial product and then is forced to recall it?
A: Brands release products frequently that do not make it for one reason or another. One of those reasons might be because they were seen as insensitive, inappropriate or ill-aligned with the consuming public. If a brand then elects to recall the product, the fate of the brand really depends upon a number of factors. How long did it take the company to respond? Did they only take action because they were forced to by consumers? Did they apologize? Did it seem like they walked away from the experience having learned something and would make an effort to do better the next time? Did their response seem genuine and transparent? Did it come from a top executive and did employees support the company and its decision through their social media channels? Did the company take time to engage with top customers to learn from them?
There are other things to consider as well, but in the end many companies will make mistakes with brand and product introductions. The mistake is more easily forgiven and forgotten based on the response from the company. It was once said that “all PR is good PR,” and while I do not believe that to be true, I do believe that it is human nature to forgive and to move forward if you feel heard and if you feel real action will come. The role of the brand is to listen very closely and carefully when adding or launching new products, and then to respond very quickly and decisively when your expectation is not matching with the market reality.
Top photo courtesy Pixabay
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