How to Differentiate your Brand through Product Innovation

“Everything that can be invented has been invented.”

Charles H. Duell, Commissioner, US Patent Office,  1899

The quote above may have missed out on the airplane, radio, TV, microwave, car, computer, internet, nearly every cpg product and of course my beloved iPhone.  Maybe the sentiment of the quote was just about 100 years too early.  In the last decade, most of the great innovation has been relegated to social media and electronics.  I hope this century brings us much more than just Facebook, BBM and Twitter.  In the consumer goods area, we must be on the 197th version of “new” cherry flavoured bubble gum since 1955, we’ve now seen hundreds of “new” peach yoghurt and I hope I never see another “new” laundry soap telling us that their little blue beads get their clothes really clean.  

New products that truly solve a consumer problem in a unique way are rare.  This is the generation of marketing incrementalism.  On most brand plans I see “launch innovative new products”  sits comfortably in the #3, 4 or 5 slot on the plan, while #1 is fix the advertising and #2 is get more distribution.  

There are four key stages to innovation:  1) Invention 2) Differentiation 3) Experience and 4) Perception.  And the marketing is different at each phase.

Stage 1: Invention of the Core Product:  The challenge of a truly new product is to finding something that is truly different: a new technology, delivery, format or process.   Rarely, do we get to work on a game changing “invention”.  
Stage 1 of a new product usually focuses all of their efforts on launching and explaining why it is needed.  The product at this stage is usually just the core product, not yet perfected, higher costs and limited sales with no profits.   The advertising is about awareness and the message is simple:  you have this problem, we solve that problem.   There’s an effort to the distribution, because many customers are risk averse and afraid of new products.   Consumers are willing to pay a little more to solve the problem, they overlook all the flaws and limitations, and they think “why didn’t I think of this”.  While some consumers love the new product already, most consumers still sit at the sceptical and indifferent stage.  

Stage 2: Product Proliferation means Differentiation:  With a little bit of success in the market comes copy cats.  With more consumers buying, there becomes room for some differentiation, but mostly limited to product still:  new features and added services on top of the core product.  They might have found a way to make things cheaper, easier to use or better tasting.  Prices come down and brands offer more variety.  Distribution becomes a battle ground and getting full distribution becomes the goal.  Customers try to line up behind certain brands–looking for preferential treatment.  The advertising is about consideration and purchase, trying to stake out certain spaces, shifting from product to brand and separating your brand from others. Brands now sell the solution, not just the product.  And consumers start to choose, one brand over another.  While some consumers prefer one brand over another, most consumers are at the like it stage.

Stage 3: It’s all about the Experience:  In order to establish leadership or challenge for leadership, brands begin to talk about the experience consumers will have with their product.  It becomes no longer about the brand or product but about the consumer and how your brand fits into their life.  Brands look to use positioning strategies to separate themselves, focusing on key targets, with unique benefits–a balance of emotional and rational benefits.  Advertising brings the consumer front and centre, trying to establish a routine with your brand in it.  Brands try to move to the love it stage, some do, but most will be stuck still at the like it stage.  Those that get stuck are forced into value and focusing on price, promotions or value.  The brands that reach the love it stage can command a premium, drive share  and establish leadership in the category.

Stage 4:  Managing the Perception:  As the market matures, any share point movements become difficult gain any traction on real quality so the shift moves to perceived quality.  Strategy shifts to brand personality where tone and manner in the execution are paramount so that Consumers connect with the brand and begin to see themselves in the brand.   Brands push to become a Beloved Brand, where demand becomes desire, needs become cravings, thinking is replaced with feelings and Consumers become outspoken fans.  The brand becomes powerful, with power over distribution because consumers would switch stores before they switch brands and power over competitors who are stuck trying to establish their own point of difference.  Profits are at their highest–revenue, margins are both strong and spending is focused and efficient on maintaining the relationship.  While at the top of the mountain, with firm leadership in the category, the brand is always at risk of losing that leadership.  Challenge yourself continuously the stay at the top.  Avoid becoming complacent.

Ask Gap Clothing, Cadillac, IBM computers, Levis, Sony or Kodak who have each reached the Beloved Stage only to be replaced by new products and brands and moved back down the love curve towards Indifferent.  Most recently, Blackberry.  Only 18 months ago, people jokingly used the term “crackberry” to describe their addictions.  No longer.

The four stages can easily be matched up to the Brand Love Curve and help establish strategic focus for the brand.  At the Invention stage, consumers remain indifferent until you build awareness and explain how your product solves a problem in my life.  At the Differentiation stage, some like it, but you are now facing proliferation and attack forcing your brand to stake out a claim.  At the experience stage, you need to become part of your consumers life and balance the emotional and rational benefits that can move you to the love it stage.  And finally, you have to tightly manage the Perceptions to become that Beloved Brand for Life stage, it’s about connecting with consumers so they see themselves through your brand.   You need to establish your personality and begin to wield the power of being a Beloved Brand.

But be careful: very few brands remain at the top for very long.   

About Graham Robertson:  I’m a marketer at heart, who loves everything about brands. I love great TV ads, I love going into grocery stores on holidays and I love seeing marketers do things I wish I came up with. I’m always eager to talk with marketers about what they want to do.   My background includes CPG marketing at companies such as Johnson and Johnson, Pfizer Consumer, General Mills and Coke.  I do executive training of executives and brand managers, helping on strategy, brand planning, advertising and profitability.  I’m the President of Beloved Brands Inc and can help you find the love for your brand.

Advertisements

4 thoughts on “How to Differentiate your Brand through Product Innovation

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s