The media are always looking for new "darlings," and every now and then a sensational
new product emerges, whipping them into a frenetic state. Swiffer, the iPod, TiVo,
Crest Whitestrips, Red Bull -- all are products that had the industry gushing about
their features and benefits. Part of what drives these stories is the fact that
there are so few wildly successful new products -- especially in comparison with
the number of products launched. We're all familiar with new-product failure rates
(most are more than 90%) and yet, as marketers, when we read about these new products
and understand the innovations that brought them to market, we aspire to be the
next success story. We know we're smart enough to create breakthrough successes
and believe that "this time around, it's going to work."
Yet often it doesn't work. And because so many of us are caught up in the execution
and development of various initiatives, we don't have time to reflect on the underlying
causes that may contribute to the limited number of
truly innovative introductions.
Growing brands
To help figure out why there are so few successful, exciting new products, we partnered
with Davis Research to conduct a study of the consumer-package-goods industry. Titled
"Creativity in New Products: A Reality Check," the survey queried 128 senior marketers
representing brands from some of the world's leading CPG companies. Our goal was
to gauge the strategies they use to grow their brands, as well as identify the challenges
they face.
New products coming to market lack differentiation. This shouldn't be a surprise
to anyone; however, the degree to which this is an issue should: Only 12% of survey
respondents consider recently launched products as being differentiated. That means
nearly nine in 10 believe everyone is introducing me-too products. At the same time,
75% of survey respondents claim to operate in highly competitive categories. Is
it any wonder? If everyone is exploiting similar technology within a given category,
the market is sure to be flooded with products too similar in design, features and
benefits -- meaning the category itself is well on its way to becoming a commodity.
It's also reasonable to assume that brands operating in these categories are experiencing
price pressure. If manufacturers aren't creatively solving consumer needs, consumers
will buy the perceived "deal."
A brand's emotional equity can also be a limiting factor at the shelf. While 62%
of survey respondents say they understand that emotions have a meaningful impact
on consumers' brand and product choices, only 12% believe companies (theirs and
the competition) offer creative solutions to these needs. Combine that with reduced
media support -- or at least a fragmented brand message, given all of the new media
vehicles in use today -- and the typical brand's equity isn't prominent, nor does
it add enough differentiation to convince consumers it's better.
Feeding the enemy
In effect, by launching me-too products under dispassionate brand umbrellas, we're
making it easier for private label to become more prominent.
There are two underlying issues feeding this "exploitation" approach in developing
new products rather than encouraging "exploration" of new platforms. The revenue
and profit requirements of every brand in the portfolio are real -- there will be
no "profit holidays" -- and today's marketing manager is much more manager than
marketer.
In our study, marketers claim that the development of completely new products or
brand platforms is the strategy most important to their companies' achievement of
next year's corporate goals, signaling that the need for innovation is stronger
than ever. But many organizations aren't willing to make the financial investment
necessary in an activity that comes with no guarantees. Add the risk of no marketable
output to a timing issue (there are few CPG companies that can invest money from
this year's budget to fund an initiative that won't bear fruit until next year or
the year after) and few management teams can afford to invest in true innovation.
The survey data further indicate that, while recognizing that completely new products
or brand platforms can and should drive growth, respondents say the strategies getting
the most focus in the next three years will be development of line extensions and
mergers-and-acquisitions work -- two activities that require less internal creativity.
Once a brand has established itself in the market, proper expansion of the technology
and equity is warranted -- it's smart business. Licensing and acquiring technology
from an external partner is also a logical path to pursue. However, when organizations
recognize the need for organic growth yet continue to seek it externally, a paradox
develops. Management won't be sure which path takes priority.
Few creative skills
It's no secret that nearly every major CPG company recruits marketing personnel
from the finest universities. The graduates of these schools are confident, smart
and well-trained. Oftentimes, however, these young professionals are too analytical.
They have been trained to analyze, assess, control, decide, determine, evaluate,
influence and manage. For the most part, their abilities to ideate, innovate, create
and imagine weren't fostered or emphasized as skills important to workplace success.
So when they land in the working world, they're placed in positions that rely on
and further develop these managerial and strategic skills. Eventually, these are
the people who drive the new-product-development process and influence which products
get launched and which ones don't.
Between the organization's need to make the best use of marketing dollars and the
skill set of the person managing the business and process, innovation takes a hit
almost every time -- and so does the development of completely new products or brand
platforms.
By now, management within most CPG companies has ensured the development of and
adherence to a new-product-development process. This is typically done to keep things
under control and to facilitate the development of measurable metrics. And it's
well-known that with the proliferation of Six Sigma practices, companies have lost
their creative instincts. So how badly has this trend affected the creative input
into the development of new products?
In our study we asked marketers to assess their companies' thought processes on
a scale where one end is structured thinking (based on analysis, attention to detail
and execution) and the other end is unstructured thinking (based on creativity,
instincts and innovation). They were asked to tell us what their companies' approaches
are today, where they were three years ago and where they are expected to be three
years from now. Additionally, we asked respondents what they believed to be the
"ideal" thought style for developing new products.
Achieving balance
What we learned is that today's behavior is much more balanced than it was three
years ago and yet far from where they want it to be. In fact, 50% more respondents
believe their companies employ a more balanced approach today than they did in 2004
(54% vs. 36%). Yet, a full 84% of participants say a balanced approach is "ideal,"
a far cry from where they are now.
To meet the needs of the new-product-development process, marketers should make
a concerted effort to involve creative types. The involvement of these folks shouldn't
be limited to attendance at focus groups and ideation sessions but should be included
in the project-design process as well in order to ensure the program output identifies
the biggest and best opportunities.
Every CPG company needs new products to generate organic growth. And most marketers
recognize the need for and value the involvement of "creativity" in the new-product-development
process.
So why,
then, are most new products dull and boring imitations and
duplications?
Incorporating creativity in the new-product-development process can help grow your
brand and your company and help your product become a media darling.
Barry Curewitz is managing partner of Whole-Brain Brand Expansion, a firm devoted
to new-product identification and development based in Morrisville, Pa. He has worked
on brands including Splenda, Lenox, Lubriderm and Bic.
