The aim of this thesis is to come up with a typology of marketing flop areas. Therefore I will present 90 marketing failures and analyze them in regard to the obvious and less obvious reasons for the failure.1 Furthermore, the case studies will be categorized according to the marketing function in which the mistake occurred. I will then present characteristics common to the cases in each category. To ease the accessibility of the text, references will only appear in the tables integrated into the section. In the second part of this thesis, three cases will be analyzed in-depth concerning how the decisions causing the marketing mistake were made. Therefore I will provide a summary of the decision in question as well as of its objectives and consequences, to then retrace the different steps that lead to the wrong decision. For each of these cases, I will also outline how the failure could have been prevented. Finally, I will shortly summarize the most important results of my research. I will also mention which limitations I encountered while preparing this thesis, and suggest further questions that, in my mind, are relevant to research in the field of marketing flops.
Table of Contents
1. Introduction
1.1 Relevance
1.2 Scope and objectives
1.3 Methodology
1.4 Structure
2. Typology and overview of marketing flops
2.1 Product flops
2.2 Branding flops
2.3 Pricing flops
2.4 Promotion flops
2.5 Placement flops
2.6 Crisis management flops
2.7 Selected observations
3. Case studies: Reasons for flops and mistakes in decision making
3.1 Coca-Cola Company: New Coke
3.2 Maytag Corporation: Hoover UK
3.3 Source Perrier: Perrier
3.4 Selected observations
4. Conclusion
4.1 Summary
4.2 Limitations and avenues for further research
4.3 Implications
Objectives & Themes
This thesis investigates the typology of marketing failures to understand why major corporate decisions lead to disastrous outcomes rather than expected success. By analyzing 90 cases and conducting in-depth empirical studies, the research explores how flawed decision-making processes, particularly in the initial formulation stages, contribute to marketing flops, and provides insights into how these mistakes could be avoided.
- Typology of marketing flop categories (Product, Branding, Pricing, Promotion, Placement, Crisis Management).
- Application of Nutt’s (1993) formulation process theory to analyze decision-making failures.
- In-depth case analysis of Coca-Cola, Maytag/Hoover UK, and Source Perrier.
- Identification of critical "signals" and interpretation errors in corporate strategy.
- Prevention and recovery strategies for marketing mistakes.
Excerpt from the book
3.1 Coca-Cola Company: New Coke
The Coca-Cola Company used to be the uncontested leader in the US soft drink market. But Pepsi attempted to close the market share gap. After very successful years in the 1950s until the early 1970s, when Coke outsold Pepsi by a ratio to two to one, Coca-Cola watched its growth rate drop rapidly from 13% in 1976 down to 2% annually in 1979. Whereas the Coca-Cola Company dominated with a lead of 6.8% in 1975, this had diminished to only 2.9% by 1984. At that time Coca-Cola outspent Pepsi by $100 million in advertisement budget, had a clearly superior distribution system and was competitively priced.
Fueled by the “Pepsi Challenge”, blind taste tests among consumers that showed a clear preference for Pepsi and paralleled an increase in the competitor’s market share from 6% to 14%, Coca-Cola interpreted the signal of market share erosion as a matter of taste. Coke’s own taste tests came up with the same preference for Pepsi’s sweeter formula, and with the new CEO’s announcement “that nothing was sacred to the company anymore” (Hartley 1995, p. 133) and that “the sacredness of the commitment to the original Coke formula becomes tenuous” (Hartley 1995, p. 133) project Kansas began in 1982.
Because the evidence suggested that taste was the single most important buying criterion, Coca-Cola focused on improving its formula. This interpretation of the signals is the first mistake the soft drink giant made. It did not occur to them that the promotional campaign “Pepsi Generation” was very effective in capturing “the imagination of the baby boomers with its idealism and youth” (Hartley 1995, p. 131) and that the association with “youth and vitality” (Hartley 1995, p. 131) enhanced Pepsi’s brand image. The interpretation limited the range of action alternatives by setting the direction of having to create a new Coke, instead of also inquiring the possibility of repositioning the original product.
Summary of Chapters
1. Introduction: This chapter establishes the relevance of studying marketing failures and defines the research scope, objectives, and methodology.
2. Typology and overview of marketing flops: This section defines various marketing failure areas and classifies 90 historical cases to identify commonalities and characteristics.
3. Case studies: Reasons for flops and mistakes in decision making: This chapter provides an in-depth analysis of three major corporate cases using the formulation process theory to retrace how flawed decisions occurred.
4. Conclusion: This chapter summarizes the research findings, highlights the importance of understanding customer needs, and offers implications for future managerial practice and academic research.
Keywords
Marketing flops, Marketing failure, Decision making, Formulation process, Brand equity, Consumer research, Product development, Pricing strategy, Crisis management, Brand extension, Typology, Management mistakes, Service recovery, Corporate strategy, Marketing mix.
Frequently Asked Questions
What is the core focus of this thesis?
This thesis examines why major marketing failures, or "flops," occur by developing a typology of failure areas and analyzing the decision-making processes that lead to these corporate mistakes.
What are the primary fields of marketing failure discussed?
The work categorizes failures into six key areas: product, branding, pricing, promotion, placement, and crisis management.
What is the primary objective of this research?
The main goal is to determine how marketing flops can be categorized, identify why companies make wrong decisions, and explore how these mistakes could have been prevented.
Which scientific framework is used for the analysis?
The thesis utilizes Paul C. Nutt’s (1993) framework for describing organizational formulation processes to analyze the decision-making steps taken by companies.
What is covered in the main section?
The main section includes both a broad overview of 90 marketing failures and an in-depth, step-by-step analysis of three specific cases: Coca-Cola, Maytag/Hoover UK, and Source Perrier.
Which keywords best characterize this work?
Key terms include marketing flops, decision-making, brand equity, formulation processes, and customer-oriented management.
Why did Coca-Cola fail with "New Coke" despite extensive research?
Coca-Cola mistakenly interpreted taste as the sole buying criterion and failed to recognize the deep emotional ties and cultural symbolic value consumers placed on the original formula.
What caused the failure of Maytag’s promotional campaign at Hoover UK?
The promotion was too attractive relative to the company's cost structure, leading to an overwhelming, unmanageable customer response that incurred massive financial losses.
What primary lesson can be learned from the Source Perrier contamination crisis?
The case highlights that failing to be transparent with stakeholders and attempting to maintain a brand "myth" in the face of a crisis significantly destroys brand equity and trust.
- Quote paper
- Sarah Hündgen (Author), 2010, Marketing flops: Typology and cases, Munich, GRIN Verlag, https://www.hausarbeiten.de/document/176303
