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.
