New products managers work so hard to create differentiated products and marketing strategies, yet we continue to see a distressing level of commoditization among US brands. The majority of consumers perceive major brands as Aquafina and Dasani, or Crest and Colgate, as interchangeable. How can so many smart managers be failing? After digesting Clancy and Krieg’s Your Gut Is Still Not Smarter Than Your Head, we came up with these four managerial decisions that, while seemingly reasonable, can ultimately crash a new product launch.
1. The wrong approach: targeting heavy category users, or non-category users.
Why is it wrong? Research shows that these particular consumer segments are unprofitable targets. Heavy category users are often price/deal-switchers, while someone with no interest in the category won’t even take a free sample when it’s offered to them.
What to do instead? Conduct responsiveness analysis and target marketing to consumers predicted to be most responsive to your brand offer. Also conduct research into usage and buying occasions to help define targets.
2. The wrong approach: basing your marketing campaign on a premise that’s very attention-getting and engaging to consumers, even if its largely unrelated to your brand promise.
Why is it wrong? You’ve probably seen plenty of ads that grabbed your attention but left you scratching your head and forgetting the brand. A piece of creative that doesn’t leave you knowing and feeling something more about the brand is, frankly, a waste of media dollars. Remember the California Raisins “I Heard It Through the Grapevine” campaign? Their $80 million expenditure generated a lot of talk, but no incremental sales. Why? Because nothing in the ad suggested why you’d want to eat more raisins. As advertising legend David Ogilvy famously stated, “If it doesn’t sell, it isn’t creative.”
What to do instead? Create marketing based on a consumer-desired benefit. Even the most image-oriented products such as fragrances deliver a benefit in making you feel a certain way, whether it be youthful, romantic, powerful, or urbane. Look at Skol beer in Brazil. In just four years, Skol rose from being the #4 ranked beer in the country to the #1 position and its market share doubled to 31%. Skol’s success is credited to its carefully researched and executed marketing strategy, built on the consumer-meaningful benefit of smoothness combined with a youthful spirit described as “fun, daring, and innovative” and presented with the tagline “The beer that goes down round.” Even the most image-oriented products such as fragrances deliver a benefit in making you feel a certain way, whether it be youthful, romantic, powerful, or urbane.
3. The wrong approach: when prioritizing product features and benefits, asking consumers to simply rate the importance of different attributes.
Why is it wrong? If you ask women how important it is to have nicely styled hair, they’ll typically say it’s not important. In the grand scheme of life, love, and world hunger, it’s not. Yet women spend hundreds of dollars coloring and styling their hair.
What to do instead? Identify consumer problems and then seek to solve those problems. Ask consumers how desirable an attribute is, what their biggest problems are, and how well their current product solves those problems or delivers the desired result. A lot more women will admit that great-looking hair is desirable and will accurately tell you where their need-gaps are.
4. The wrong approach: moving from idea to market as quickly and directly as possible – eliminating the time and money to test multiple concepts, formulations, and ad executions with consumers.
Why is it wrong? The more ideas you test, the greater the probability of hitting on a blockbuster. With advertising, it’s not that expensive to produce and test rough-form ads, relative to the size of the media expenditure, and numerous studies have shown that a stronger-than-average ad can double your awareness and sales pay-off. The same kind of pay-off applies to the testing of product concepts and formulas.
What to do instead? Don’t assume that you know which features and messages will strike the strongest chord with consumers. Test and learn. Make sure you have a narrative that resonates with your target consumer and shows them how the product fits into their life. Mountain Dew Kickstart offers a great example. Dew targeted cross-cultural Millennial males, aiming to keep them in the Dew franchise as they mature. Pepsi found that their target wanted a refreshing, sweet energy boost to get them going in the morning, but not a big jolt. Pepsi conducted multiple iterations of conjoint testing and prototyping to explore flavors, taste, type of juice, amount of juice, caffeine level, vitamin supplements, package, unit size and branding. Almost a year in the making, Kickstart became a sweet and refreshing drink with health-halo’ed ingredients like fruit juice and coconut water, added vitamins, caffeine, and fewer calories than regular juices, sodas, and energy drinks. As a result of their extensive research to ensure that they had a product that truly delivered on consumer desires, Kickstart has been hailed as one of Pepsi’s most successful new product launches in the past ten years, racking up over $120 million in retail sales in year one and nearly $300 million in year two.
Bottom line, a manager’s gut is rarely smarter than good research. Apply a scientific research approach to your innovation projects and you could be the hero of the next Mountain Dew Kickstart or Skol beer success story.