We are always talking about innovation. That’s because it is so important. “New” is one of the most important words in the marketing vocabulary. In the world of cosmetics, new products typically account for 15 to 20% of a company’s sales. Admittedly it is a lower proportion in business to business companies but some pundits believe that in B2B 30% of your product line should be made up of products that are less than 5 years old.
There is so much vagueness in statements such as this. For example, what is a new product? Is it something that is tweaked or is it radically new? Most new products tend to be variations of existing ones. Sometimes it is only the packaging that is different.
If you are reading this note, we can presume that you are in marketing or market research. You will therefore have a responsibility for helping your company find new products – the fresh blood that your company needs to survive. Herein lies the problem, so many new products fail.
Forgive us for turning once again to our consumer cousins for some help here, but they do have more public data at their disposal. A couple of years ago the market research company Nielsen found that only 18 out of 8,650 new product launches in Europe were breakthrough innovations. Genuinely new products such as Nestlé’s Nespresso capsules, accounted for just 0.2% of the total. What is more, most of the 8,650 new products were in the food sector. Leading the field were sports drinks, beer and mineral water with tweaks and twists rather than transformations.
Coca-Cola is one of those companies in the drinks sector and it should know a thing or two about innovation. In fact, its failures show us how difficult it is. We all remember the failure of New Coke and the embarrassing climb down back to the classic favourite. Do you also remember Coca-Cola Life? It was launched in 2014 in a green can and the innovative feature was a natural sweetener. In the UK it never caught on and it has now been axed from the portfolio. So has Coca-Cola’s Blak, a coffee flavoured drink which was introduced in 2006 before being discontinued in 2008. If Coca-Cola finds it difficult to launch new products, it must be telling us something.
New products have to meet a need. Sometimes that need is very obvious and the new product will do well straight away. Witness the example of Scholl’s Velvet Smooth that removes rough and dry skin from your feet. (Gents, you may not understand this but ladies do worry about the velvety feel of the soles of their feet). The need to keep feet in good condition was a vacuum that Scholl recognised and filled with great success.
In contrast, Harley-Davidson, who know so much about branding premium motorcycles, made the mistake of launching an aftershave which now features famously in the Museum Of Failure which opened its doors in April of this year in Helsingborg, Sweden. We should all take a visit.