As we ramp up to face the economic, political and societal changes that will surely continue in 2012, many organisations are challenging their R&D and hopefully marketing departments too, to develop and launch new products and services.
With luck, these developments were already in their plans and pipeline for this year, but sometimes businesses are forced into going to market sooner than they would have liked, due to market circumstances or competitive activities.
An article in Marketing Week (read here) at the beginning of last year, mentioned that Unilever said that increased investment, as well as their “Bigger, Better, Faster” innovation initiative was the driving force behind its increased profit and sales in 2010.
As we are all only too aware, today’s customers are highly dem anding of novelty and each period of satisfaction becomes shorter and shorter, as they quickly get accustomed to the latest improvements.
In an earlier post (read here), I spoke of the research carried out by Jan-Benedict Steenkamp, a marketing professor at UNC Kenan-Flagler which showed that CPG / FMCG innovation needed to be one of the two extremes of “innovativeness” to succeed:
- either a minor improvement, or renovation, such as a new flavour, size, colour, packaging, content …
- or a radically new product that is significantly different from anything else on the market. These are of course more breakthrough and therefore more difficult to develop. Past examples have included microwave meals, Sony Walkman, Nespresso, iPhone, Ipad,
The interesting and perhaps disturbing thing about breakthrough innovation, is that timing is everything; bring it out too early and people won’t underst and or see the need; too late and competition might beat you. This is one of the reasons that IT companies quite often offer “beta versions” of their products or software before they are 100% ready and then quickly follow with a version 2 with corrected or improved functionalities.
Other br ands such as Nestlé’s Nespresso or even Gillette’s Silkience, the first shampoo with integrated conditioner, launched almost 40 years ago, were introduced ahead of the curve, before their consumers were ready for them. The companies then had to decide to either wait it out (Nespresso waited many years to become profitable) or relaunch at a later date, but then risk being pre-empted by competition, who then have the time to copy the new product.
So how can companies better underst and their consumers’ needs, desires, or even unarticulated and unknown needs, and launch just in time to benefit from them? Here are three ideas that I came up with, but I would welcome your input too:
1. Develop Future Scenarios
Most organisations today are following trends, but as competition is almost certainly following the same ones, there is no competitive advantage and little chance of benefiting from identified tendencies. It is only when the trends are turned into future scenarios that the real competitive advantage appears.
2. Identify lead countries
Most industries have markets where the consumers are more dem anding or more open to innovation in certain categories. These are great countries for both market testing, as well as for showing others what is likely to happen in the near future. Such examples include:
- fashion in France and Italy
- technology in Japan and the USA
- retailing in the USA
3. Collaborate with neighbouring industries
Several companies have formed alliances with others to either prepare first level ingredients for their own product preparation or to develop manufacturing technologies or retailing opportunities with cross-over possibilities. Examples that come to mind include:
- Sony-Ericsson: a joint venture by Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones
- The retail giant Walmart formed a joint venture with Bharti Enterprises, Inc., one of India’s leading business groups, which led to their opening business there in 2009.
- Nestlé and Coca-Cola formed a joint venture for Ice Tea (just ended)
Today’s consumers are highly dem anding of bigger, better and faster innovations, so companies must build speed and flexibility into their new product development processes and tools to answer these needs. Being better prepared is half the battle.
How are you preparing for the constant dem ands of your own customers and consumers? Please share your ideas and stories below.
For more ideas on new product and service development, please check out innovation on our website: https://www.c3centricity.com/home/vision/