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This is Why your New Products “Crash & Burn”

Last month I invited readers to share some of the problems and challenges they need to address in 2014. I offered a free consultation to one lucky winner who asked the most interesting question, which could also be of interest for me to answer for other readers.

Well, the winner is Jean-Francois (JF) who has just started working with a start-up in the tech and app areas – I feel that’s more and more of us these days, don’t you? His question was:

“I would like to commercialize a new XXX; what would be the right approach to identify the consumer need and then the market potential, considering that the company has very limited financial resources?”

This is a great question and a reminder that not every organisation has access to large market research or marketing departments and extensive budgets. In fact, in many companies these roles are being h andled by one and the same person with very few resources; is that your case? If so then you will definitely find this post of interest, but even if it isn’t, I’m sure you will still find value from the ideas shared.

As I had promised, I gave Jean-Francois a one-on-one consultancy which ended up lasting several hours, as he had planned well for our session together. He also happens to be really passionate about his innovative idea, as well as in finding solutions to all his challenges.

The product JF and his team want to launch doesn’t exist on the market today, although there are some products which are unsuccessfully trying to address the perceived customer need. The proportion of product launches which fail every year is generally “accepted” to be about 95% – although why companies continue to accept such levels is beyond me! With such odds, I think it is incredibly courageous to start a whole company based around just one new product idea, but that seems to be the norm in many areas today.

Let’s start by taking a look at some of the reasons new products fail and identify ways to reduce if not completely eliminate them for your next launch.

  1. New product Process wheelThe process itself: Innovation is by definition a creative process, but many organisations use a well-worn, restrictive and uncreative process to develop their new products. They are at best most likely to come up with renovations than true innovations. The solution is to introduce some creativity into the process, and why not include potential customers in the process too?
  2. Meeting company quotas: It is surprising that with such miserable statistics concerning the likely success rate of new products, that so many companies – and which shockingly include many of the largest CPGs around – fix quotas on the number of annual new product launches. How crazy is that?! It just encourages too many new products to be launched too early, and almost guarantees failure! I believe it would be much better to seriously limit the levels of acceptance amongst all new product ideas proposed in any year, then only the best would get through.
  3. Lack of customer underst anding: This is most likely one of, if not the most important reason for new product launch failures. And I don’t mean that you should ask the customer what he wants, he doesn’t know until you make it available to him in many industries. No, I mean starting by looking at a customer’s lifestyle and seeing how you can make it easier and more enjoyable for them. If you already have a new product idea, which was the case for JF, then consider how it would make the customer’s life easier or better. If it doesn’t, then you perhaps need to reassess its market appeal.
  4. Lack of category underst anding: This follows on from customer underst anding, in that you need to identify how the customer is currently working around or compensating for their need today. Don’t assume you are competing in a certain category until you have identified what the customer is currently doing or using. That is the way to identify your true competition.
  5. Not living up to your promises: If you promise a better, cheaper or more enjoyable experience, then customers deserve to be able to confirm this if they buy. Especially in today’s connected world, if you disappoint by not meeting customers’ expectations, your product will fail even more quickly than in the past, since early-adopters will Tweet or leave comments on Facebook, Blogs or other social media platforms for all to see.
  6. Not being sufficiently differentiated: Following on from living up to your promises, customers need a reason to change behaviours, and depending upon the category this can be costly, whether in time, money or effort. Many customers prefer to continue buying an inferior product or service than making the effort to change – think Telecom, Banking, Hotels, Air travel or Insurance as some of the most typical examples of such industries. These businesses are in a constant battle to differentiate themselves and provide a real advantage to attract new customers.
  7. Being too different: Whilst not being sufficiently differentiated can be a certain cause of failure, being too new can also meet with no success. The reason for this is that if customers are totally unfamiliar with the new product or service offering, you will need to spend considerable resources to educate them. If you are unable or not willing to invest the time and money in doing this, then you will undoubtedly fail to attract more than just a few customers who take the time to underst and what you are offering.
  8. Correct pricing is key to NPD successPricing yourself out of the market: Here I’m not just speaking of pricing your product too high; being too low can also negatively impact your likely success. Underst anding how much potential customers value your offer to essential to the success of any product. Getting it wrong can result in lost revenue or worse a promotional spiral leading to br and hell (read more about this in “Are you on the way to br and heaven or hell“)
  9. Inappropriate distribution: This can be the consequence of an incomplete underst anding of your customer and is also linked to differentiation. Whilst you can just follow near competitors into their own distribution channels, why ignore the possibility of being available where and when your customer might buy it most? By reducing the effort necessary to change their habits and buy, you can attract more potential customers to at least try your new product.
  10. Being too far ahead of the customer: There are many examples of great products that were ahead of their time. Gillette brought out 2–in–1 shampoos with conditioners included in the early 70’s, but they were a dramatic flop. Ten years later most personal care manufacturers offered these products, and were met with huge success, even if such products have gone out of fashion somewhat since then. It took Nespresso almost twenty years to become profitable and Philip Morris has needed similar levels of patience for their most infamous of br ands Marlboro, in many markets. If you can’t afford to wait for your customers to catch up with your new product idea, then you should certainly reconsider your launch decision.

These are ten of the most common reasons for new product launch failure. Which do you think is most prevalent in your own company? What are you going to change to increase the success of your own new products? Is it some other reason altogether, that I’ve missed? Let me know and share your thoughts below. 

Coming back to JF, most of our time together was spent discussing ways to collect information on many of the above points. As he has little budget for extensive market research, it was important for him to find other ways of gathering the much needed information and not to just bypass that stage; perhaps many people don’t bother to search out the information they need to truly assess the likely success of their new product, which would explain the high failure rate mentioned above.

By the end of my session with JF, he had a clear plan of action and I have since heard that he is progressing incredibly fast, so watch this space for an announcement concerning the launch of his new device.

I will be sharing the tips I gave him in a future blog post, but in the meantime feel free to continue sending me your own questions; I’m always ready to have a short Skype or phone call to assist you with your own marketing and innovation challenges.

C³Centricity uses images from  DreamstimeKozzi  and Microsoft

Successful Innovation comes from answering Desires not Needs

What is the difference between a need and a desire? Emotion, that’s what. A need is something for which someone has a necessity; a desire is something they want or crave, whether they know it or not.

There are the three main types of products or services that companies offer; it is important that you underst and the difference between them as well as what you are offering or planning to innovate, if you are to be successful.

Some organisations speak about articulated, unarticulated and unimagined needs, but they miss the power of emotions if they are considering all three as simply needs to be addressed. Unless there is an emotional connection between what you are selling and what your customer perceives he is buying, you are likely to remain at the level of a commodity, or at best are restricted in the price you can charge. Only emotional connection brings passion into the equation, when customers desire or crave your product or service and are willing to pay (almost) anything to have it.

Examples of Great Emotional Connection

Think about Apple as a great example of a company that brings passion into their products, so that potential customers pre-order or spend the night queuing in front of the shop in order to have the privilege to give Apple their money in exchange for the latest gadget.

Now I love Apple as much as most people, but are their products really worth more than their competitors? Was the iPod really that much better for listening to music on the go? Probably not, but it is their customers’ desire to be a part of the Apple “family” that makes them crave their products.

Another example is Marlboro cigarettes. Do they really taste better than other br ands? Maybe, but it is not the taste (alone) that makes smokers remain loyal to the br and; rather a feeling of community and adherence to a desired image.

And speaking of taste, what about colas? The now famous brain imaging study run by Baylor College of Medicine – you can read more about it here – showed that consumers thought Pepsi tasted better that Coke, but there was something very different happening in the brain when consumers thought they were drinking Coke or Pepsi. It was what the consumers were thinking that made the difference, a result of br anding.

So what can you do to make your customers think differently about your br and, so that they remain loyal to it, desire it and even crave your product or service? Bring in and stimulate their emotions; here are four ideas on how this can be done:

#1. Make them feel special, different, privileged

This can be achieved through:

  • higher prices – many premium and luxury products are priced more on image than on cost and their customers are happy to pay more for the associated image that has been created
  • membership to a br and club with special privileges – Nespresso is a great example of this; their clients get to order online and even get asked their opinion or to choose new flavours
  • personalised offers – unlike clubs, these are offered to a wider group of purchasers (on a mailing list for example) but the wording of communication and the offers proposed are personalised to each target group, so they are perceived as more personal

#2. Stimulate more of your customers’ senses

So that competitive products are disappointing in comparison. As Nigel Hollis, Chief Global Analyst at Millward Brown, mentioned in his blog post Sensory br anding and sensible questions, “The research conducted for BRANDSense confirms that memories of the sensory br and experience do have an important role to play in encouraging br and loyalty. The stronger, more positive and differentiating, people’s sensory memories are of a br and, the more likely they will be to consider it for repeat purchase”. For example:

  • add sound and texture to a food through a hard coating, as many ice-creams offer today
  • provide extra sensations in the mouth through additional ingredients; c andy and chewing-gum often offer these as new sensations
  • surprise through special perfumes for household products; remember the popularity of “green apple” a few years back?
  • astonish with unusual colours for personal care products; have you tried the range of Pantene colours, the shampoo I mean!
  • amaze through special textures of creams or clothing; luxury face products are often claimed to have a richer, creamier or more “melting” texture.

#3. Involve your customers in the innovation process

Even if your customers don’t always know or can’t express what they want, they are usually much clearer about what they don’t want. Listen to them describe their experiences with your product or service category and the pain-points they have. What do they like, dislike; what would they change? And more widely, what do they think about the category, their situation when needing or using your product or service, what feelings they have using ir?

By getting them involved from the start, you are much more likely to satisfy their rational needs and emotional desires, AND you will encourage discussion as they share their experiences with their friends, family and perhaps even wider on the web.

#4. Build excitement through communications

Many products and services are launched with a “teaser” campaign that sets and builds customers’ expectations for weeks, if not months before launch. This certainly can make your target audience excited with anticipation, but the new product must deliver on its promises.

Remember the launch of the completely redesigned BMW Series 5 in Europe about 10 years ago, which had to be quickly replaced with the older design when current owners rejected the modernisation? Or what about the more recent launch of the BMW 5 Series GT in the US, which had 5 Series Touring customers running to rival Mercedes-Benz and many current Series 7 owners downgrading to the cheaper car? As with any product or service, you must deliver what is promised and this becomes doubly important if you fire your future customers with excitement for the new launch.

These are just four ways in which you can bring more emotion into your innovations; I know there are many more, so why not share your own experiences here? We would love to hear how you have brought more emotion into your products and services.

For more on Innovation, please check out our website here: https://www.c3centricity.com/home/underst and/

If you are struggling to bring emotion into your products or communications, please contact us, we can certainly help support you through advice or a 1-Day Catalyst session. NO obligation, just a great OPPORTUNITY!

C3Centricity.com uses images from Dreamstime.com

Brands need to Cultivate Storytelling

Storytelling is a natural human behavior. In all cultures around the world, it has been used to convey learning and history, as well as to entertain children and adults alike. It has developed down through the ages for transferring knowledge long before books and now the web enabled their storage.  

Big brands and those that resonate with their customers, all have myths and stories built up about them. Do yours?

Stories of an iconic br and

When I worked for Philip Morris International, I first heard about this for the iconic Marlboro br and. At that time, it was rumored that Marlboro was financing the Ku Klux Klan in the US, because its packaging had three red rooftops or “K’s” on it. As this was certainly neither true nor desirable, the powers that be decided that we should remove one of the K’s by making the bottom of the pack solid red.

We thought that the rumours would then stop, as we saw them as negative for the br and. However, our consumers had the last say, because they then replaced the KKK rumour with one announcing that Marlboro hated blacks, Asians and Indians. This second story came about because a consumer had found the printer reference markings of coloured dots on the inside of the pack when he had dismantled it.

 

Customers tell stories about “their” brands

There are many myths about the greatest br ands around, coming from their packaging or communications in most cases. Toblerone is romoured to have the “Bear of Berne” and the Matterhorn exemplifying its Swiss origin on its pack, which also resembles the Matterhorn mountain. Camel is said to show the “Manneken Pis from Brussels” on the back leg of the camel of its pack, although I am not sure where that comment originated!

Other br ands develop stories through their communications, that are then shared and repeated by their customers. Examples of these include Columbia Outdoor wear’s “Tough Mother” campaign, Harley Davidson’s enabling “middle aged” men to become bikers at the weekend, or Dove’s campaign for real women to name just a few. All these stories emphasize the connection their customers have with these br ands, making them almost a part of their families through this emotional connection.

 

What stories are told about your brands?

What do your customers say and believe about your br ands? Rather than trying to correct them, unless of course they are clearly negative as was the case for Marlboro, continue to inflame them and more people will talk and share their proof that it is true. Someone said that there is no bad publicity; I am not sure about that, but it sure fires enthusiasm when people can share stories about their favorite br ands, and today’s ease of sharing through social media makes them arguably even more important.

One word of warning though; your br and has to live up to the story; Columbia’s wouldn’t have worked if their gear failed in the real world, nor Dove’s if they had moved to show women that looked too much like top models in their advertising.

Do you have any other stories about br ands you would like to share here? Do your own br ands have stories that customers tell each other? If not, then maybe your brand is not yet in the big league, or perhaps you will have to start a rumour of your own for them to share.

Social media is a great story-telling medium and you need to ensure that you post stories and information that are worth sharing, if you want to be considered a member of the family.

For more on br and building: https://www.c3centricity.com/home/engage/

This post is adapted from one that was first published on June 16th 2011 in C³Centricity Dimensions

C³Centricity uses images from Dreamstime.com

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