One of the reasons that many of you may be taking this course personalization is to determine the best way of developing a successful product to introduce in the marketplace. So, it may seem strange that we first focus on why new products fail before we begin to look at how they succeed. Well, the reason for taking that particular approach is to understand that in many cases, even today, more products fail than succeed when they're introduced into the marketplace. Now, the myth that's been going on around for a long time has been that 80 percent or more of new products that are introduced actually fail. Now, we've done research and determined that those statistics are changing on a daily basis based upon the approaches we're taking with developing new products. But if we look at the data of current research, this was actually provided by the Stage-Gate Corporation, is the percentage of new product projects succeed, fail, or kill changed based upon different factors that may influence the process. Kill, the rate of success is increasing and whether you're a top performing in that category, middle performer, or a bottom performer, you can see that the rate of products success succeeds those that are actually failing or being killed in the marketplace. Because we're taking a much more systematic approach to better understand how products are developing and we've been able to increase the success rate. Now, whether you're a top or middle or bottom performer may be determined by a number of different factors, but ultimately, you can get a successful product into the marketplace. And the top performers are those who are being much more systematic about evaluating both the product but more importantly, the role that customers play in the product than say, the bottom performers. Here are some of the reasons why new products fail. Now, many of you today are probably using your smartphones and you can connect to someone else with your phone and see them as you're talking to them. But would you be surprised that the first picturephone was actually developed in 1964 at the World's Fair by AT&T? Now, there are different challenges for why this phone did not succeed. But, one of the reason it failed was the lack of understanding regarding customer needs. So, the technology had been developed to actually make this possible, but customers were not ready to accept it because of how they use the phone. More importantly, it required that if you had a Picturephone, the person you calling had a Picturephone. So, it wasn't necessarily very easy to communicate with other people unless they had invested in that particular technology. So, one of the main reasons that many products fail is that we fail to understand what the underlying customer needs are and what they value to help them to determine whether or not they adopt the phone or not. But there are other reasons as well. Many of you might be familiar with Coca-Cola as a product. Coca-Cola is a product that's purchased all over the world. But some time ago, they decided based upon customer research that they wanted to introduce what was called the New Coke. The New Coke was based upon a new formalization and they had tested among customers that this new formalization was liked. But, the New Coke was not fixing a problem because everyone already accepted the classic Coke. The classic Coke was doing well in terms of customer taste, it was the company decided that a new taste was needed. They introduced them to the product into the market and it fail because it did not solve the problem that customers were having, no one had a problem with classic Coke, and at the same time, they were not providing additional value in terms of the product that was being introduced. So, fixing a non-existent problem because you're able to when there's not a market may lead to product fail. Targeting the wrong market, another Coca-Cola product. Many of you probably have not heard of it, but TaB was one of the first diet sodas introduced into the marketplace. It was actually targeted to females, but the pink can actually ended up pulling off the male market and so even though the diet Cola was one that was wanted both by the male and female market it ended up not being as successful, because they didn't include a product that actually had targeted the full market. Apple is not always successful and in terms of one of the products they introduced into the marketplace was called the Newton. Now, the Newton was one of the preceded to smartphone and it was a personal digital assistant, a PDA. It was introduced because Apple had the technology to introduce into the marketplace. And they tell customers were looking for a way of keeping notes using the PIN-based technology, but the customer did not value that particular technology enough to switch to buying the PDA's. Microsoft also has been known for products that didn't succeed. Not because it was not necessarily a good product but once the product was introduced into the product it was purely, poorly, executed in terms of convincing the customer base that BOB, this software-based product targeted for the home market was a product that would provide value to the customer. So customers were never convinced based upon how this product was introduced into the marketplace of the value of the product and the product was never really adopted. When we're developing a product, some of the key questions that companies sometimes fail to ask is, do potential customers recognize the need for the product? So have you clearly identified a need, that needs to be met, that's not currently being met or can be met better by the product of service that you're introducing. Just because we have a technology to develop a new product does not necessarily mean that that product should be introduced into the marketplace. Another question they need to ask as you're trying to decide on developing your new product of service is, how do customers currently satisfy the need? Because with any new product of service we introduce, customers have found a way to satisfy that need. If they're satisfied with that particular approach, it will be hard for you to overcome their satisfaction with the need for them to adopt the new product if they're not convinced of the value of that product. This is what we saw with the introduction of the Microsoft BOB. And then finally a key question you should ask, is the solution that you're recommending with your new product of service different from the current products of service that the customers have. New Coke versus Classic Coke. Customers didn't see the value and it wasn't substantially better than what they already had. So these are just three of the questions you need to ask as you're trying to decide the potential marketability of your particular product of service. These are just some of the questions you need to ask when you're trying to decide how to improve the success rate of your product. If we follow an approach to better understand what customer needs are and what needs that we can satisfy with that product of service we're thinking of developing, we'll be in a better position to ensure the success of it. Other factors come into play and such as what products they're currently using. But in the long run if you can convince customers that your product supersedes what they're currently using or has benefits that they're currently not provided for them in the marketplace it will be one step closer for you ensuring the success of your new product of service.