Growing pressures for consumer goods companies
Creating successful innovation in consumer products is clearly difficult. According to IRI, less than 25% of new brands in the United States earn $7.5 million in first-year sales, and less than 2% earn $50 million. Overwhelmingly, the big winners tend to be brand extensions, rather than innovative consumer products creating fundamentally new categories.
It is very hard to change engrained consumer behaviors. New brands can also struggle to fit into existing retail merchandising schemes – the Colgate Wisp single-use toothbrush, for example, was stocked initially in both oral care and confectionary. Moreover, brands have become increasingly fragmented, making it harder for new introductions to stand out. It only adds to the challenge that private label has become extremely fast at knocking off successful new products – occasionally even beating brands to achieving national roll-out.
And yet new markets are absolutely fundamental to growth in the consumer products industry. For most brands, extensions can only go so far before they devolve into a confused jumble of SKUs that drive high costs and cannibalization. New flavors and assortments are important to growth, but so too is creating the next Febreze or Red Bull.
Using proven ideation methods to develop strong products
Our team leverages deep industry knowledge as well as practical experience launching innovative new products to help our clients develop, test, and commercialize new concepts. We also excel at identifying new markets for new or existing product lines, in part by using our proven Jobs to be Done research methods to explore the unarticulated needs of diverse customer types. Companies such as Nestlé, Johnson & Johnson, and Procter & Gamble have benefitted from our approaches.
Beyond generating new ideas, which is often the easy part, New Markets helps companies to determine how their customers define success. Our work often includes using unique concept testing methods specifically designed to introduce customers to unfamiliar products and services.
Recognizing the patterns of companies that win
Finding a unique niche in the market can be a difficult task. New Markets has substantial experience finding the patterns of success and failure within individual industries and specific product categories. Through our efforts, we have identified some of the most common plays run by companies that win, including the following examples:
- Target an awkward workaround that people have settled for (Swiffer)
- Bring an established proposition to a new situation (ZzzQuil)
- Think holistically about the experience of using a product, instead of looking simply at its function (diabetes products)
- Re-orient a familiar product with a fundamentally new value proposition (Gorilla Glass)
- Address a newly relevant need (cloud storage)
- Leverage distribution advantages to dominate an emerging category (Sirius XM radio)
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