Great Marketing Disasters 3: Sinclair C5

In the mid-1980’s, Sir Clive Sinclair could apparently do no wrong. He was lauded for his inventive genius and his entrepreneurial zeal.  He was seen in pretty much the same light as Sir James Dyson is today.  Then, it all went wrong.

Sinclair is without a doubt a genius electronic engineer.  He was amongst the first to place both pocket calculators and digital watches on the market.  His biggest success came in the home computer market when he designed the ZX Spectrum.

The Spectrum was not the best home computer on the market in 1984; both the Commodore 64 and the BBC Micro were of stronger construction and had larger memory capacity; but it was relatively cheap and had the advantage that there were a wide range of games available for its young customer base.  The Spectrum sold like hot cakes and Sinclair Research became a major UK design firm.

Riding high on the success of the Spectrum, Sinclair announced that he was now going to develop the first mass production electric vehicle.  This was going to be the green answer to the world’s mass transportation crisis.  The Sinclair C5 was launched.

Sinclair Research invested heavily on the design of the C5.  It’s body was designed by Lotus and Sinclair designed an innovative battery to power the vehicles electric motor.  A contract to manufacture the C5 was agreed with Hoover who would assemble the vehicle at their mid-Wales factory.

Sinclair chose Hoover; a company more usually associated with vacuum cleaners and other domestic white goods; to manufacture the C5 on the basis of their expertise with fitting electric motors.  Many commentators wondered why a company with no experience in the construction of vehicles was chosen to manufacture the C5 over an established car brand like Lotus.

The C5 was a disaster from day one.  Less than a third of the manufactured vehicles were ever sold.  Sinclair lost millions and production ceased after less than six months.  The launch has been described as the worst innovation disaster ever.

It was obvious that there was significant consumer resistance to the C5 concept.  The vehicle was a cross between a recumbent tricycle and a child’s pedal car.  It sat close to the road surface where the driver’s head was at approximately the same level as a car exhaust pipe.  It had little in the way of storage capacity and the ‘cab’ was open to all weathers (a rain cape could be purchased as an optional extra.  Worst of all the C5 lacked power.  It’s electric motor couldn’t cope with the slightest inclines and ‘drivers’ would have to pedal the C5 up hills.  The lack of power came partly from the C5 being rushed to market to make the most of a loophole in the UK’s road traffic laws with respect to electric vehicles.  This haste meant that the C5 was launched without Sinclair’s new battery and heavier, lower capacity batteries had to be used instead.

Given all these failings, the public saw the C5 as downright dangerous, uncomfortable and not matching the promises made by Sinclair.

Sinclair may have been a genius engineer, but he was a hopeless marketer.  In developing the C5 he committed several cardinal errors.

In a previous blog entry we saw how General Motors ignored their market research. Sinclair Research didn’t ignore market research, they didn’t do any.  Clive Sinclair had been interested in developing electric vehicles for years.  He was obsessed and rather than carrying out market research to discover the public’s opinions as to the product’s design, he pressed ahead with full-scale production based solely on his own preconceptions.  If market research had been carried out Sinclair would have been aware of the public’s misgivings as to the C5’s safety and would have been able to address them.  Admittedly, that may have resulted in a complete redesign of the trike.

Sinclair made no attempt to segment the market for the C5 and to offer variations for different customer groups.  the C5 was a one size suits all offer.  Instead of identifying the strongest customer groups for the electric vehicle, such as teenagers unable to drive a proper car, it was presented as the solution to all public transport problems.  The public took one look at the C5 and almost immediately decided that it did not solve their problems.

Finally, Sinclair did not listen  to professional advice.  Professor Malcolm Macdonald, then a senior marketing researcher at Oxford University was concerned about the C5 concept and the fact it was being touted as the solution to mass transportation of people.  He saw this concept as overly ambitious.  He wrote to Sinclair advising that the initial launch of the C5 should be smaller and targeted at specific potential customers.  Professor Macdonald cited as an example theme parks and large holiday resorts where the C5 could be used by residents.  Macdonald also suggested large retail parks and factories as suitable locations for the C5’s use.  Although this was not road transport it would get consumers used to the C5 concept and a consumer market could be built from that base.

Professor Macdonald’s advice about holiday resorts had a lasting resonance. A Spanish businessman bought the unsold stock of C5’s.  He then sold them to holiday resorts for use by residents and made a significant profit.

So what is to be learnt from The Sinclair C5.

  1.  Do consumer research to test your concept and do not press ahead solely on your own views about your product.
  2. Segment your market and identify the most attractive customer groups for your product.  Market to those groups and not the market as a whole
  3. Take the advice of marketing professionals and prepare a detailed marketing plan.  This should begin at the product development stage.  You find suitable customer groups and design a product to meet their needs.  It is far harder to design a product and then try to find a customer base for that product.
  4. If possible, test market your product, either on a particular market segment or geographic area.  if the product fails, any losses then incurred will be significantly smaller
  5. Don’t rush to market.  Dot the i’s and cross all the t’s before you make your product available to the public.

Sir Clive Sinclair is still around and still innovating.  The last product he developed was an ultra-light folding bicycle with skateboard wheels.  However, his career has never hit the heights of the ZX Spectrum and his reputation has been eternally damaged by the failure of the C5.