Moral Hazard – It's Not Just For Insurance Anymore

It's an overlooked driver of new product introduction failures

Somewhere between 50% and 90% of new consumer products launches fail, depending on the methodology. Regardless of the weighting given to revenue and profit targets, growth, and other determinants to arrive at the number, the rate of new product introduction failure in consumer products is unacceptably high.

It's not hard to find notable examples of new product introduction failures: Pepsi's Frito-Lay Lemonade Kellogg's Jolly Rancher Pop-Tarts; Pepsi's Tropicana Essential Pro-Biotics; and Kraft Heinz's Frosted Salad Dressing. Perhaps some of these products weren't designed to last forever, but they involve costly changes to formulas and features that go into new product development (NPD) launches, and downstream activities like packaging, marketing, and sell-in. Line extensions, while less expensive, also involve costs in these areas. When sales fall short, there are rightly questions about why, and