MIT Sloan Says Crystal Cola Customers Harbingers of Failure
MIT Sloan recently blogged about a study two of its professors—Duncan Simester and Catherine Tucker—published in the Journal of Marketing Research, which analyzed the flops of cult products like Diet Crystal Pepsi and Coca-Cola BlāK. Despite Diet Crystal Pepsi’s post-mortem popularity on eBay, where an unopened vintage 24-pack is currently selling for $900, its real-time failure was both transparent and perplexing.
It turns out that the habits of a rare and curious breed of consumer—so-called “harbingers of failure”—are to blame. According to the article, the earlier these Harbingers adopt a product, the more accurate a prediction it serves of the product’s eventual decline. Harbingers tend to “buy things that appeal to a narrow slice of the marketplace.”
Simester elaborates: “People who like yellow nail polish are the same people who like watermelon Oreo cookies. In other words: “Product sales don’t translate to success if the wrong people are buying.”
The study encourages companies to pursue feedback from customers who were early adopters of marketplace hits, rather than the fringe consumption whims of Harbingers. At the same, companies should make an effort to understand customers’ “history of liking products that flopped.”
Simester and Tucker also believe that customers who liked flops in unrelated product segments or purchased “multiple successive units of a product that flopped” should be taken into consideration as potential “harbingers of failure.”
According to the article, the study “analyzed data sets from a prominent convenience store chain” that amounted to “127,925 customers covering 10 million transactions.” While Simester and Tucker’s insights will certainly be useful for companies secretly concocting wild new products—Durian Mountain Dew, anyone?—the duo hope their research will help more accurately predict trends of similar Harbingers within other domains. Simester offers, “There are harbingers of political failure: donors to political campaigns who systematically give to losing campaigns”
About the Author
Jonathan Pfeffer
Jonathan Pfeffer joined the Clear Admit and MetroMBA teams in 2015 after spending several years as an arts/culture writer, editor, and radio producer. In addition to his role as contributing writer at MetroMBA and contributing editor at Clear Admit, he is co-founder and lead producer of the Clear Admit MBA Admissions Podcast. He holds a BA in Film/Video, Ethnomusicology, and Media Studies from Oberlin College.
