Marketing failure

Last updated

Marketing failure is when a commercial marketing effort by a business fails to accomplish anything positive, or alternately when a commercial product is either totally or mostly rejected by its potential customers.

Contents

Overview

Marketing researchers have distinguished between outcome and process failures. An outcome failure is a failure to obtain a good or service at all; a process failure is a failure to receive the good or service in an appropriate or preferable way. [1] Thus, a person who is only interested in the outcome of an activity would consider it to be an outcome failure if the core issue has not been resolved or a core need is not met. A process failure occurs, by contrast, when, although the activity is completed successfully, the customer still perceives the way in which the activity is conducted to be below an expected standard or benchmark.

Wan and Chan note that outcome and process failures are associated with different kinds of detrimental effects to the consumer. They observe that "[a]n outcome failure involves a loss of economic resources (i.e., money, time) and a process failure involves a loss of social resources (i.e., social esteem)". [2]

Examples

Edsel

Edsel is a discontinued division and brand of automobiles that was produced by the Ford Motor Company in the 1958 to 1960 model years. Deriving its name from Edsel Ford, son of company founder Henry Ford, Edsels were developed in an effort to give Ford a fourth brand to gain additional market share from Chrysler and General Motors. Established as an expansion of the Lincoln–Mercury Division to three brands, re-christened the Mercury–Edsel–Lincoln Division, Edsel shared a price range with Mercury. The division shared its bodies with both Mercury and Ford. Competing against Buick, Oldsmobile, Pontiac, Dodge, and DeSoto, Edsel was the first new brand introduced by an American automaker since the 1939 launch of Mercury and 1956 launch of Continental, which ended and merged into Lincoln after 1957. In the year leading to its release, Ford invested in an advertising campaign, marketing Edsels as the cars of the future.

A 1959 Edsel Corsair 1959 edsel (11641679176).jpg
A 1959 Edsel Corsair

While 1958 Edsels introduced multiple advanced features for the price segment, the launch of the model line became symbolic of commercial failure. [3] Introduced in a recession that catastrophically affected sales of medium-priced cars, Edsels were considered overhyped, unattractive, distinguished by a vertical grille said to resemble a horse collar, [4] and low quality. Following a loss of over $250 million$, 2.57 billion in 2023 dollars, [5] on development, manufacturing, and marketing on the model line, Ford quietly discontinued the Edsel brand before 1960. [6]

Third-Pound Burger

In the 1980s, A&W, under then-owner A. Alfred Taubman, sought to challenge McDonald's highly successful Quarter Pounder by introducing a larger, higher-quality hamburger. The campaign, called "Third is the Word," was designed to promote A&W's third-pound burger as a better value for the same price as McDonald's quarter-pound burger. Despite the promise of more meat for the same price, the campaign failed to resonate with consumers.

Taubman recounted the experience in his book, Threshold Resistance. He described how the company aggressively marketed the third-pound burger through TV and radio promotional spots, but sales remained lackluster. Confused as to why the burger was not selling, Taubman hired a market research firm to conduct a study. [7]

The A&W research firm organized focus groups to understand why A&W's third-pound burgers weren't competing well with McDonald's Quarter Pounders. The results revealed a surprising source of consumer resistance: many participants mistakenly believed that one-third of a pound was smaller than one-fourth (quarter) of a pound. Focus group participants expressed confusion over the price, asking why they should pay the same amount for a "smaller" third-pound burger.

This misunderstanding stemmed from consumers focusing on the numbers "3" and "4," leading them to conclude that one-third (1/3) was smaller than one-fourth (1/4), even though the opposite is true. [8]

A similar account was reported by The New York Times in 2014, which cited the A&W third-pound burger as one of the most vivid examples of consumer arithmetic failure. [9] In taste tests, customers actually preferred A&W's third-pound burger to McDonald's Quarter Pounder, and it was less expensive. However, consumers misunderstood the fraction, believing they were being overcharged for a smaller burger.

According to a CBC report, more than half of the people surveyed about the burger said they didn't buy it because they thought they were getting less meat for the same price as McDonald's Quarter Pounder. [10] The New York Times echoed this sentiment, noting that the larger number "4" in "¼" confused customers, making them think it was a better deal than "⅓".

See also

Concepts

General concepts
Related concepts

Examples

Related Research Articles

<span class="mw-page-title-main">Edsel</span> Automobile brand of the Ford Motor Company

Edsel is a discontinued division and brand of automobiles that was produced by the Ford Motor Company in the 1958 to 1960 model years. Deriving its name from Edsel Ford, son of company founder Henry Ford, Edsels were developed in an effort to give Ford a fourth brand to gain additional market share from Chrysler and General Motors. Established as an expansion of the Lincoln–Mercury Division to three brands, re-christened the Mercury–Edsel–Lincoln Division, Edsel shared a price range with Mercury. The division shared its bodies with both Mercury and Ford.

<span class="mw-page-title-main">Mercury (automobile)</span> Automobile marque of the Ford Motor Company

Mercury was a brand of medium-priced automobiles that was produced by American manufacturer Ford Motor Company between the 1939 and 2011 motor years. Created by Edsel Ford in 1938, Mercury was established to bridge the gap between the Ford and Lincoln model lines within Ford Motor Company. From 1945 until its closure, it formed half of the Lincoln-Mercury Division of the company.

<span class="mw-page-title-main">A&W Restaurants</span> American fast food chain

A&W Restaurants, Inc. is an American fast food restaurant chain distinguished by its "Burger Family" combos, draft root beer and root beer floats. A&W's origins date back to 1919 when Roy W. Allen set up a roadside drink stand to offer a new thick and creamy drink, root beer, at a parade honoring returning World War I veterans in Lodi, California. Allen's employee Frank Wright partnered with him in 1922 and they founded their first A&W restaurant in Sacramento, California in 1923. The company name was taken from the initials of their last names – Allen and Wright. The company became famous in the United States for its "frosty mugs" – the mugs were kept in a freezer and filled with A&W Root Beer just before being served to customers.

<span class="mw-page-title-main">Continental Mark II</span> Motor vehicle

The Continental Mark II is an ultra-luxury coupé that was sold by the Continental Division of Ford for the 1956 and 1957 model years. The first product line of Continental, the Mark II was developed as the worldwide flagship vehicle of Ford Motor Company. Developed as a successor for the 1939–1948 Lincoln Continental, the Mark II derived its nameplate from European manufacturing practice, denoting a second generation of the model family; Ford would later use this nomenclature for the Mark Series of flagship personal luxury cars.

The Arch Deluxe was a hamburger sold by the international fast food restaurant chain McDonald's in 1996 and marketed specifically to adults. Despite having the largest advertising and promotional budget in fast food history at the time, it was soon discontinued after failing to become popular. It is considered one of the most expensive product flops of all time.

<span class="mw-page-title-main">Lincoln Versailles</span> Motor vehicle

The Lincoln Versailles is a mid-size luxury car that was marketed by Lincoln from the 1977 to 1980 model years. The first Lincoln introduced outside of the full-size segment, the Versailles is a rebranded version of the Ford Granada and Mercury Monarch. Replacing the Mercury Grand Monarch Ghia, the model line was introduced as a competitor to the Cadillac Seville.

<span class="mw-page-title-main">Mercury Montclair</span> Motor vehicle

The Mercury Montclair is a series of full-size sedans that were manufactured and marketed over five generations by the Mercury division of Ford. The nameplate was used by the division twice, from the 1955 to the 1960 model years and from the 1964 to the 1968 model years. The model was offered as two-door and four-door hardtops, four-door pillared sedan, and a two-door convertible.

<span class="mw-page-title-main">Quarter Pounder</span> Hamburger sold by McDonalds

The Quarter Pounder is a brand of hamburger introduced in 1971 by a Fremont, California franchisee of international fast food chain McDonald's and extended nationwide in 1973. Its name refers to the beef patty having a precooked weight of approximately one quarter of a pound, originally portioned as four ounces (113.4 g) but increased to 4.25 oz (120 g) in 2015. In some countries where the pound is not customarily used as a unit of weight, the hamburger's branding instead features the word Royal.

<span class="mw-page-title-main">Mercury Meteor</span> American car

The Mercury Meteor is an automobile that was produced by Mercury from the 1961 to 1963 model years. Adopting its nameplate from the namesake Ford of Canada brand, the Meteor was introduced as the base-trim full-size Mercury sedan, while the compact Mercury Comet shared a naming convention associated with the ongoing Space Race of the early 1960s. Slotted below the Mercury Monterey, the Meteor was the Mercury counterpart of the Ford Fairlane.

Louis Cheskin was a scientific researcher, clinical psychologist, and marketing innovator. Born in the Russian Empire on February 17, 1907, he was a one-time Works Progress Administration (WPA) artistic supervisor. He died of a heart attack at Stanford University Hospital on October 10, 1981, at age 72.

<span class="mw-page-title-main">Edsel Corsair</span> Motor vehicle

The Edsel Corsair is an automobile that was produced and sold by Edsel in 1958 and 1959. For 1958, the Corsair was built on the longer, wider Edsel platform shared with Mercury. For 1959, the Corsair shared the shorter, narrower Ranger platform with Ford.

<span class="mw-page-title-main">Edsel Bermuda</span> Motor vehicle

The Edsel Bermuda is a station wagon that was produced and sold by Edsel in 1958. Like the Edsel Villager and Edsel Roundup station wagons, the Bermuda was built on a 116-inch (2,946 mm) wheelbase shared with Ford's station wagons, as well as core body stampings.

<span class="mw-page-title-main">Edsel Ranger</span> Motor vehicle

The Edsel Ranger is an automobile that was produced and sold by the newly formed Edsel Division of Ford for the 1958–1960 model years. It was built on the shorter, narrower Edsel platform, shared with Ford and Edsel Pacer models.

<span class="mw-page-title-main">Brewster & Co.</span> Defunct American motor vehicle body manufacturer

Brewster & Company was an American custom carriage and motorcar coachbuilder. James Brewster established the company in 1810 which operated for approximately 130 years. Brewster got its start in New Haven, Connecticut, and quickly gained a reputation for producing the best carriages in the country. In 1827, he set his shop at 52 Broad Street in New York City.

<span class="mw-page-title-main">Mercury Eight</span> Motor vehicle

The Mercury Eight is an automobile that was produced by the American manufacturer Ford Motor Company under their now defunct division Mercury between 1939 and 1951. The debut model line of the Mercury division, Ford positioned the full-size Mercury Eight between the Ford Deluxe model lines and the Lincoln. In total, Ford assembled three generations of the Eight.

<span class="mw-page-title-main">Lincoln-Zephyr</span> Car model

The Lincoln-Zephyr is a line of luxury cars that was produced by the Lincoln division of Ford from 1936 until 1942. Bridging the gap between the Ford V8 DeLuxe and the Lincoln Model K, it expanded Lincoln to a second model line, competing against the Chrysler Airflow, LaSalle, and the Packard One-Twenty.

<span class="mw-page-title-main">Lincoln L series</span> Motor vehicle

The Lincoln L series is the first automobile that was produced by the Lincoln Motor Company. Introduced in 1920, the L series would continue to be produced after the bankruptcy of Lincoln in 1922 and its purchase by Ford Motor Company.

<span class="mw-page-title-main">Mercury Marauder</span> Motor vehicle

The Mercury Marauder is an automobile nameplate that was used for three distinct full-size cars produced by the Mercury division of Ford Motor Company. Deriving its name from the most powerful engines available to the Mercury line, the Marauder was marketed as the highest-performance version of the full-size product range.

Joseph E. Cappy is an American business executive who was the final president and chief executive officer of American Motors Corporation and the first president and CEO of the Dollar Thrifty Automotive Group.

The third-pound burger is a hamburger made with a patty that weighs one-third of a pound before cooking. It is larger than the more common quarter-pound burger typically sold by fast-food chains. The third-pound burger gained notable attention in the 1980s due to an ill-fated marketing campaign by A&W Restaurants in the United States, which has since become a case study in consumer behavior and market communication.

References

  1. Smith, Amy K.; Bolton, Ruth N.; Wagner, Janet (August 1999). "A Model of Customer Satisfaction with Service Encounters Involving Failure and Recovery". Journal of Marketing Research . 36 (3): 356–372 at 358. doi:10.1177/002224379903600305. ISSN   0022-2437. S2CID   220628355.
  2. Wan, Lisa; Chan, Elisa (20 March 2019). "Failure is Not Fatal: Actionable Insights on Service Failure and Recovery for the Hospitality Industry". Boston Hospitality Review. 7 (1). ISSN   2326-0351.
  3. Dicke, Tom (2010). "The Edsel: Forty years as a symbol of failure". Journal of Popular Culture. 43 (3): 486–502. doi:10.1111/j.1540-5931.2010.00754.x.
  4. "Replicated Prototype - 1960 Edsel Corsair". hemmings.com. Hemmings. Retrieved 28 October 2023.
  5. 1634–1699: McCusker, J. J. (1997). How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States: Addenda et Corrigenda (PDF). American Antiquarian Society. 1700–1799: McCusker, J. J. (1992). How Much Is That in Real Money? A Historical Price Index for Use as a Deflator of Money Values in the Economy of the United States (PDF). American Antiquarian Society. 1800–present: Federal Reserve Bank of Minneapolis. "Consumer Price Index (estimate) 1800–" . Retrieved February 29, 2024.
  6. Carlson, Peter (2007-09-04). "The Flop Heard Round the World". The Washington Post . Archived from the original on 2019-03-06.
  7. A. Alfred Taubman, Threshold Resistance.
  8. Matt Novak. "What's Bigger: 1/3 Pound Burgers or 1/4 Pound Burgers?" Gizmodo, 25 July 2014. Gizmodo
  9. Elizabeth Green. "Why Do Americans Stink at Math?" The New York Times, 23 July 2014. The New York Times
  10. CBC Radio. "How Failing at Fractions Saved the Quarter Pounder." CBC Radio, 8 August 2021. CBC Radio