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December 22, 2015

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Doomed-to-fail products may appeal to one type of buyer

Dec. 22, 2015
Courtesy of MIT
and World Science staff

Di­et Crys­tal Pepsi. Frito Lay Lem­on­ade. Water­melon Oreos. Through the years, the shelves of stores have been filled with prod­ucts that turned out to be flops, fail­ures, duds, and losers.

But some peo­ple are drawn to these prod­ucts again and again, a study finds—so much so that their buy­ing ac­ti­vity may sig­nal that a prod­uct is doomed.

The same group of con­sumers has an out­sized ten­den­cy to pur­chase all kinds of failed prod­ucts, ac­cord­ing to the pub­lished study by two Mas­sa­chu­setts In­sti­tute of Tech­nol­o­gy pro­fes­sors. The study calls these peo­ple “harbingers of fail­ure” and sug­gests they pro­vide a new win­dow in­to con­sum­er be­hav­ior.

“They keep on buy­ing prod­ucts that are [lat­er] tak­en from the shelves,” said Cath­er­ine Tuck­er, a pro­fes­sor of mar­ket­ing at the uni­vers­ity and a co-author.

These star-crossed con­sumers sniff out flop-worthy prod­ucts of all kinds, she added. It’s “a cross-category ef­fec­t,” she ex­plained. “If you’re the kind of per­son who bought some­thing that really did­n’t res­o­nate with the mar­ket, say, coffee-flavored Co­ca-Co­la, then that al­so means you’re more likely to buy a type of tooth­paste or laun­dry de­ter­gent that fails to res­o­nate with the mar­ket.”

And while strong in­i­tial sales of prod­ucts nor­mally seem like a good thing, the re­search in­di­cates it’s not al­ways so—not if it’s the harbingers of fail­ure who are snap­ping up the items.

“It’s not just how many peo­ple are buy­ing them, it’s how many of the right peo­ple are buy­ing them and how many of the wrong peo­ple aren’t buy­ing them,” said Dun­can Simester, an­oth­er co-author of the stu­dy, and al­so a mar­ket­ing pro­fes­sor.

“Usually when you’re do­ing mar­ket re­search, the com­mon wis­dom is that peo­ple lik­ing your prod­uct is a good thing,” Tuck­er adds. “But what we’ve done in this re­search is iden­ti­fy a group of peo­ple who you really want to [have] hate your prod­uct. And that changes the par­a­digm of mar­ket re­search.”

The study drew on two large da­ta sets from a large chain of con­ven­ience stores that reaches across the U.S. All told, the re­search­ers ended up ex­am­in­ing 77,744 cus­tomers who pur­chased 8,809 new prod­ucts be­tween 2003 and 2005, and then track­ing the da­ta long­er to see how well those prod­ucts fared. They de­fined a failed prod­uct as one pulled from stores less than three years af­ter its in­tro­duc­tion; only about 40 per­cent of the new prod­ucts sur­vived that long.

The re­search­ers stud­ied con­sumers whose pur­chases flop at least 50 per­cent of the time, and saw pro­nounced ef­fects when these harbingers of fail­ure buy prod­ucts. When the per­centage of to­tal sales of a prod­uct ac­counted for by these con­sumers in­creases from 25 to 50 per­cent, the prob­a­bil­ity of suc­cess for that prod­uct de­creases by 31 per­cent. And when the harbingers buy a prod­uct at least three times, it’s really bad news: The prob­a­bil­ity of suc­cess for that prod­uct drops 56 per­cent.

But why do these peo­ple buy the doomed prod­ucts?

“You could think of it as pref­er­ence for risk,” Simester said. “Peo­ple who are more will­ing to take a risk on an un­usu­al prod­uct are more will­ing to take a risk in mul­ti­ple cat­e­gories.”

The re­search­ers al­so ex­am­ined and ruled out oth­er pos­si­ble ex­plana­t­ions of the phe­nom­e­non. For in­stance: The harbingers are not ev­i­dently any more tired or dis­tract­ed than an­yone else when choos­ing prod­ucts.

“It’s not the case that these peo­ple are buy­ing goods at 2 in the morn­ing, or some­thing like that,” Tuck­er said. “They’re not in­at­ten­tive. Sys­tem­at­ic­ally, they are able to iden­ti­fy these really ter­ri­ble prod­ucts that fail to res­o­nate with the main­stream.”

Some of the au­thors say they them­selves have pur­chased doomed prod­ucts. Tuck­er, for ex­am­ple, used to drink Crys­tal Pepsi. “This pa­per may be slightly au­to­bio­graph­i­cal,” she said.


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Diet Crystal Pepsi. Frito Lay Lemonade. Watermelon-flavored Oreos. Through the years, the shelves of stores have been filled with products that turned out to be flops, failures, duds, and losers. But some people are drawn to these products again and again, a study finds—so much so that their buying activity may signal that a product is doomed. The same group of consumers has an outsized tendency to purchase all kinds of failed products, flop after flop, according to the published study by two Massachusetts Institute of Technology professors. The study calls these people “harbingers of failure” and suggests they provide a new window into consumer behavior. “They keep on buying products that are [later] taken from the shelves,” said Catherine Tucker, a professor of marketing at the university and a co-author. These star-crossed consumers sniff out flop-worthy products of all kinds, she added. It’s “a cross-category effect,” she explained. “If you’re the kind of person who bought something that really didn’t resonate with the market, say, coffee-flavored Coca-Cola, then that also means you’re more likely to buy a type of toothpaste or laundry detergent that fails to resonate with the market.” And while strong initial sales of products normally seem like a good thing, the research indicates it’s not always so—not if it’s the harbingers of failure who are snapping up the items. “It’s not just how many people are buying them, it’s how many of the right people are buying them and how many of the wrong people aren’t buying them,” said Duncan Simester, another co-author of the study, and also a marketing professor. “Usually when you’re doing market research, the common wisdom is that people liking your product is a good thing,” Tucker adds. “But what we’ve done in this research is identify a group of people who you really want to [have] hate your product. And that changes the paradigm of market research.” The study drew on two large data sets from a large chain of convenience stores that reaches across the U.S. One data set consists of weekly aggregate transactions from 111 store branches, from 2003 to 2009. The other data set consists of individual-level transaction data from November 2003 to November 2005. All told, the researchers ended up examining 77,744 customers who purchased 8,809 new products between 2003 and 2005, and then tracking the data longer to see how well those products fared. They defined a failed product as one pulled from stores less than three years after its introduction; only about 40 percent of the new products survived that long. The researchers studied consumers whose purchases flop at least 50 percent of the time, and saw pronounced effects when these harbingers of failure buy products. When the percentage of total sales of a product accounted for by these consumers increases from 25 to 50 percent, the probability of success for that product decreases by 31 percent. And when the harbingers buy a product at least three times, it’s really bad news: The probability of success for that product drops 56 percent. But why do these people buy the doomed products? “You could think of it as preference for risk,” Simester said. “People who are more willing to take a risk on an unusual product are more willing to take a risk in multiple categories.” The researchers also examined and ruled out other possible explanations of the phenomenon. For instance: The harbingers are not evidently any more tired or distracted than anyone else when choosing products. “It’s not the case that these people are buying goods at 2 in the morning, or something like that,” Tucker said. “They’re not inattentive. Systematically, they are able to identify these really terrible products that fail to resonate with the mainstream.” Some of the authors say they themselves have purchased doomed products. Tucker, for example, used to drink Crystal Pepsi. “This paper may be slightly autobiographical,” she said.