Saturday, April 20, 2024

More to success than a good product

In addition to a product being good, many other strategies have to be in place for it to swim.

This is attested to by Thais Gill, Director of Nielsen Innovation Practice, who has tested the viability of around 200 new products and concepts for FMCG clients across a range of categories at the organisation.

From this experience she’s learned that a good product is only half the battle in achieving innovation success, with a number of other strategies bearing on success in innovation, and that not every new product needs to be completely unique to have a positive impact on their category.

A well-defined strategic approach to marketing, distribution and targeting is just as crucial, as well as a clear understanding of where the launch or activation profile of a product fits, says Ms Gill.

Existing products need to be ‘good for me’ and ‘good for we’

Make it ‘good for me’ (health concerns) and ‘good for we’ (environmental concerns) are two key areas where we have seen successful innovation within existing brand portfolios, says Ms Gill.

She says there are many examples of where manufacturers have made product or packaging adjustments or extensions to their existing brands that tap into consumers’ growing concerns around sustainability and the environment.

Key reasons why products fail 

Global BASES metrics have shown that 85 per cent of new product launches fail. According to Nielsen’s 2018 ‘How to Launch more Incremental Innovations Report’ there are three major reasons why innovations often fail to deliver incremental growth: lack of action standards for incrementality; underestimating cannibalisation from line extensions; and failure to account for marketing support trade-offs.

Ms Gill says that while it’s true that not all new product launches are designed to be truly unique or incremental, it’s still risky to overlook their cannibalisation potential.

“Some cannibalisation and marketing plan reallocation is expected when launching line extensions, but the key to incremental volume is to minimise the effects so that growth can be achieved,” she said.

“For these reasons, brands should understand the incrementality potential of their new product launches early in the innovation process. This is true even for ‘small’ innovations such as new flavors, varieties and package sizes, which are frequently overlooked for incrementality assessment because marketers underestimate their potential to impact the parent brand negatively.”

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