Simple right? Everybody and everything should underpromise and overdeliver.
This is not about setting low expectations but rather about exceeding the expectations that you do set.
Gmail is the fastest growing email service in the world. It's still in beta. Google tries new features all the time, and if people don't like them, they kill them (the features, not the people). Popular features get allocated further development resources and will continue to be improved. By still being in beta (and hyping features based on popularity not marketing research), Google has done a great job of exceeding my expectations in regards to their Gmail service.
Vice Versa, Microsoft spent 2 years hyping Vista. They set ridiculously high expectations that they simply couldn't live up to. They also took years to launch the product, which raised expectations even more. As I said before, time kills good work.
Millions of dollars are spent every day that promote products and services that don't meet expectations.
So here is my point.
Build a great product or service. Launch in beta (or on a small scale) and get real consumer feedback - not focus group research.
If the product/service is well received, then reinvest into making the next version even better. If your product sucks, then quietly pull it out of the market. Don't waste millions of dollars to market a bad product or service. Spend that money on making a better product.
Underpromise, overdeliver.
[ratings]
All the marketing in the world wont sell a bad product twice...
I really think that theme can be applied to so many other things in life as well...