In the world of marketing and advertising, the terms Flop and Commercial Failure are collectively and extensively used. For a common man, these two may sound and appear to be the same, but there are subtle and significant differences between the two in the business world.
Knowing the differences between them can be useful in understanding the marketing universe.
Key Takeaways
- A flop is a project that fails to make any profit, whereas commercial failure is a project that fails to meet its expected financial targets.
- A flop may harm the reputation of the production house or director, while commercial failure may have a different impact.
- Flop projects receive negative reviews from critics and audiences, while commercial failure may have other factors contributing to their lack of success.
Flop vs Commercial Failure
A “flop” is a product that fails to meet expectations or performs poorly in terms of sales or critical reception. Commercial failure is a term used in business to describe a product or service that is not profitable or does not meet sales targets.
Flop is when a product, for instance, a movie, is not appreciated by the masses and critics, but during the movie’s running, the producer or the distributor does not suffer any losses.
So, technically the movie did achieve financial success but didn’t receive appreciation from the critics.
Commercial Failure is when a product, for instance, a movie, procured a tremendous amount of appreciation and praise along with a good review but suffered hugely at the box office as the production cost, actor’s fees, the budget was huge, and the collection of the movie could not meet the budget.
Comparison Table
| Parameters of Comparison | Flop | Commercial Failure |
|---|---|---|
| Financial loss | Absolutely No | Yes |
| Critically Acclaimed | No | Yes |
| Audience Recognition | No | Yes |
| Production/ Manufacturing cost recovery | Possible | Almost Impossible |
| More used in | Movies, concerts, music videos, etc. | Marketing, product placement, etc. |
What is Flop?
As aforementioned, Flop is a term extensively used when a product performs poorly in the hands of the audience, but the product manufacturer or producer does not incur any losses from the sale of the product.
Any product, including commodities, movies, and music videos, can flop in the market but can incur good income.
For instance, if a pop singer arranges a concert with low production and people do not turn up at the show despite buying the tickets, the singer can be considered as a flop but as the singer and producer received the desired amount of income from the show, the show will not be termed as a failure.
Similarly, if a newly ventured company launches a product into the market with a minimum budget and the masses purely dislike it, but as the company didn’t put in much money into it, they won’t incur a loss, and the company will recover soon from the minor loss.
The word Flop is currently popularly used as an abbreviation to describe Failure in Launch, Operations, or Premise.
Failure in Launch signifies that even if the product is precisely designed and manufactured due to the wrong marketing strategy in PR, and social media, the product fails miserably in the market.
Similarly, Failure in Operations signifies that the product had a good launch, but the performance and reliability of the product have reduced drastically, leading to the flop of the product.
Failure in premise signifies that the product launched is currently of no use to the buyers or has good competition presently. Nevertheless, a product flopping in a market is not so detrimental to the company/ manufacturer as there is no financial loss.
What is Commercial Failure?
As mentioned above, Commercial Failure is substantially used when a product, even if receives praise and appreciation from the masses and still suffers huge financial loss due to high production costs.
Commercial Failure can impact the producer/ manufacturing company for a long-time due to the loss incurred.
For instance, a music video by a massive production house that includes the top actors and musicians is released and is considerably loved by the audience but does not bring in the desired income due to the involvement of a vast cast and their fees, high-end production cost, and it can be termed as a commercial failure.
A Commercial Failure is described as a product or company that does not reach the expectations or goals of success. This can be understood with another example of video games launched.
Back in the early 21st Century, many newly launched games collectively failed in the market, which hugely impacted the video game scene during that period.
Some video games failed miserably due to hardware failure, console hardware failure, software failure, and huge production costs. Rarely did any video game succeed back then.
Although many video games failed tragically, in the masses, they are considered cult classics and highly appreciated even now.
In the world of stock marketing, the stock marketing bubble dot-com bubble was a bubble of internet-related companies that grew drastically in the late 1990s using the internet.
But it fell to the ground by 78% in October 2002, and various websites related to them fell tragically and suffered huge losses. Almost no company can recover easily from a commercial failure.
Main Differences Between Flop and Commercial Failure
- Flop is a term used when a product fails in the masses, on the other hand, the masses need not reject a Commercially Failed product.
- A Flopped product need not suffer financially, whereas a Commercial Failure product undergoes financial loss.
- A product that Flops will not get critical and audience recognition, while a Commercial Failed product may get the recognition it deserves.
- The production company will not suffer any losses from a Flopped product and can recover easily from the loss, on the other hand, a product that is a Commercial Failure brings in huge losses, and usually, many companies fail to rise from a commercial failure.
- The audience can dislike a movie that is Flop but can be a box-office hit, on the other hand, a Commercially Failed film can be loved by the audience and still perform poorly at the box office.
References
Last Updated : 13 July, 2023
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Chara Yadav holds MBA in Finance. Her goal is to simplify finance-related topics. She has worked in finance for about 25 years. She has held multiple finance and banking classes for business schools and communities. Read more at her bio page.
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