Here's a story of product management gone awry, taken from one of my more self-indulgent pleasures, coffee.
After we recently replaced our coffee machine (ahem), we also bought a new coffee grinder. Our new Krups Burr Grinder does a really good job, much better than any of our previous grinders. The grind is more consistent, and this has to be the quietest grinder I've ever heard (if that isn't an oxymoron). All in all, I love this grinder.
Not to say it doesn't have its faults, and one glaring fault is that the amount of coffee it grinds varies from time to time. It isn't hard to see why, and that 'why' looks to be a textbook case in failure of market segmentation.
The Krups grinder has a little wheel that you use to specify how many cups you'll be grinding, which sets the grind time. This calculation depends on knowing how many beans it will grind through per second. No doubt it works really well on inexpensive coffees, that is, those that come in cans, where the beans are dry on the outside and so slide steadily into the burr.
Better beans, though, or to be more precise, well-roasted beans that are fairly fresh, have oils on the outside. Those oils can make the beans a little tacky, and in this grinder (and others), this tackiness can mean that the beans hang up a bit and the burrs run idle every now and then. A timing-based measure of how much coffee it has ground thus varies, depending on how sticky the beans were that day and on accidents of bean position and so forth. Longwinded explanation, but you can hear it when it happens.
This would have been easy to solve, though no doubt it would have added cost to the grinder. Some rotating vanes or something in the bean hopper would have removed this tendency of the beans to stick, and they would have flowed more steadily into the burr. The ginder even has the vanes, and I thought from the picture that this is what they'd do, but no, they're decoration.
I can see the segmentation error that led to this. The target market for home burr grinders is a sort of mid-market-and-up coffee drinker. But they forgot this target market when deciding whether the hopper design was adequate. 90% of the beans on the general market will work fine in this grinder. But the beans this target market will use won't work as well.
Requirements definition isn't about taking the top priorities from each of a number of different people. I'm reminded of a very old Dilbert cartoon, sales asking engineering for a 23" monitor that fits in a shirt pocket. Requirements definition is about solving most or all the needs of someone - ideally a someone who has a lot of very similar friends. Define a target customer, and delight all folks like that. Take away all their objections to buying. Don't leave them with anything left to think about, or to weigh between your product and someone else's.
Or to put another way, product management is about markets, not customers.
Coming back to the grinder, I do love it. It is head and shoulders above any other grinder I've used, and the only other grinder on the market today that even tempts me costs well over $200 (and it doesn't tempt me that much).