The Marketing Architects
Episode: Nerd Alert: Do Most New Products Really Fail?
Date: September 25, 2025
Hosts: Elena Jasper (B) and Rob Demars (A)

Episode Overview

In this episode, Elena Jasper and Rob Demars dig into the common belief that most new products fail, specifically exploring what the academic research actually shows versus marketing folklore. They review a 2021 study from Marketing Letters—"How Common is New Product Failure and When Does it Vary?"—and discuss its findings and the practical implications for marketers. The conversation covers why the failure rates aren't as catastrophic as often touted, the variables that most affect new product survival, and what this means for brands considering a product launch.

Key Discussion Points & Insights

Myth-Busting Product Failure Rates

• Common Claim: The belief that "80–95% of new products fail" is widely accepted in marketing circles.
  • [01:18] Rob: "90%. That'd be my guess. 90%, maybe higher."
• Reality from Research:
  • The actual failure rate is much lower than the myth.
  • Definition: Failure = Permanent cessation of sales.
  • One in four new products fail within the first year (~25%).
  • By year two, ~40% have failed.
  • For new product lines or sub-brands:
    • 18% failed in year one.
    • About a third failed by year two.
  • [01:22] Elena: "We've got our headline. Yes, a lot of new products fail, but the rates are about half as bad as the common myth suggests."

Factors Driving Failure Rates

1. Category Size

   • Big, high-revenue categories (cold cereal, salty snacks, soda) see higher failure rates due to fierce competition.
   • [03:18] Elena: "By year two, about 45% of the new products in large categories had failed."

2. Category Growth

   • Counterintuitively, products launched in fast-growing categories fail more often (~45% after two years) than those in stable or shrinking categories (~40% after two years).
   • [04:05] Elena: "Products that launched into growing categories actually had higher failure rates... That shocked me."

3. Brand Size

   • Small brands face a tougher climb: nearly half of their new products fail within two years.
   • Large brands: About 40% fail after two years.
   • Resources, distribution, and parent brand support matter.
   • [04:34] Elena: "Big brands have more resources, better distribution, and that stronger parent brand recognition to give new launches a fighting chance."

4. Brand Trajectory

   • Brands already growing in market share have the lowest failure rates on new launches (~26% in two years).
   • Stable brands: 40% failure.
   • Declining brands: 35% failure.
   • [04:49] Elena: "The momentum of how your current brand is doing matters."

5. Channel & Retail Hurdles

   • The study focuses on CPG (consumer packaged goods) and retail launches, not tech or B2B.
   • Getting on shelves at major retailers means passing tough stage gates, possibly filtering out weaker launches beforehand.
   • [06:38] Rob: "CPG brands ... they've got a lot of due diligence they have to go through just to get on Walmart's shelf."

Why Don't More New Products Succeed?

• Marketers may underestimate the brutal competition and barriers in established, large categories.
• Momentum and resources already possessed by larger, successful brands act as critical buffers for new launches.
• Distribution, visibility, and the ability to back new products with marketing muscle are crucial.

Notable Quotes & Memorable Moments

• [01:22] Elena: "We've got our headline. Yes, a lot of new products fail, but the rates are about half as bad as the common myth suggests."
• [04:05] Elena: "Products that launched into growing categories actually had higher failure rates... That shocked me."
• [04:34] Elena: "Big brands have more resources, better distribution, and that stronger parent brand recognition to give new launches a fighting chance."
• [07:20] Elena: "Success doesn't just come from the product itself. It comes from ensuring it's easy to find and backed with enough marketing and distribution muscle to build both mental and physical availability."
• [08:08] Elena (on RobGPT analogy): "New products are like new species entering an ecosystem: in dense, competitive jungles—the big categories—only the toughest adaptations survive."
• [08:18] Rob: "Such a tricky formula, right? If it was easy, everyone would launch new products every day. But...it's always a gamble, and you try to put the odds in your favor."

Practical Takeaways for Marketers

• Failure is Common but Not Catastrophic: Actual data shows failure rates are much lower than marketing legends suggest—about 40% in the first two years for CPG launches, not 80–95%.
• Context is Key: Launching in hot, fast-growing or large categories increases risk; don't be seduced by category sizzle alone.
• Strength in Size: Larger, healthier brands have substantial advantages thanks to greater resources, built-in distribution, and established trust.
• Momentum Matters: New launches do best when the parent brand is already succeeding and growing.
• Execution Beyond the Product: Success depends on making products easy to find and supporting them with robust marketing and distribution strategies.

Timestamps for Major Segments

• [00:46] Introduction of the research study and breakdown of the 'failure rate myth'
• [01:18–02:53] Debunking the 80–90% failure myth with real data from new product launches
• [03:18–05:01] Factors affecting failure: Category size, growth, and brand size
• [05:43–06:26] Channel considerations: CPG focus and the barriers of retail launches
• [07:20–08:08] Practical conclusions and the RobGPT "ecosystem" analogy
• [08:18–08:30] Reflections and real-world examples

Tone & Style

The discussion is friendly, nerdy, sometimes self-deprecating, and rooted in both data and relatable real-world marketing logic. The hosts combine academic rigor with accessible explanations and some lighthearted banter ("People's Republic of Nerdistan").

Summary prepared for future listeners and marketers who want to see through the myths, understand what research really says about new product launches, and get actionable insight for making smarter, better-informed innovation bets.