The Winner’s Circle
In the frighteningly competitive U.S. consumer market, more than three out of every four products that arrive on shelf sputter and disappear, failing to achieve sufficient appeal, interest and purchase to clear year-one hurdles.
As shoppers, we pass over 100,000 individual products on shelves, in coolers and on racks as we walk down supermarket aisles. New products (and old products) need to be stars that perform or they’ll be replaced.
As for ancient brands, the most remarkable ones such as Kraft’s Oreo brand and Kellogg’s Corn Flakes brand have been on shelves for over 100 years. Through the years, they continue to delight their loyal fans and bring in new loyalists. These megabrands often have to extend and defend their leadership, re-invigorating the assortment, packaging, positioning and extending the line beyond its own iconic "box" because they need to be victorious every quarter, every year. So Kraft and Kelloggs, Nestle, Mars, Coca Cola, Pepsico, General Mills, Unilever, Johnson & Johnson and P&G manage portfolios of brands to mitigate risk.
To give you an idea of magnitude in dollar amounts, mega-brand Oreo delivered $2B to Kraft last year (yes, they sold about 95 million packages of cookies). Of the top 10 most successful new products on the 2011 Symphony IRI Pacesetter’s List, only the first product cracked $100M in sales and the other nine had $40–70M in sales. An average new product launched in the U.S. Consumer Packaged Goods industry achieves about $9M in sales in its first two years on the market.
The Keys to the Product Development Kingdom:
- Foundation Is your new product development pipeline completely packed and humming with all sorts of ideas from simple to disruptive to divergent?
- Optimization Can you pinpoint the "One"? The concept or concepts with the greatest success potential?
- Active Benchmarking Is that new concept so intensely appealing that if you get distribution and promotion right, it will 1) grow the category, 2) find new niches and reach new audiences, or 3) take away from the competition? (Or all of the above!)
- Fit Once you have that viable concept, do you know how it fits into your existing line assortment? Will it cannibalize your other offerings or will it be incremental?
As agencies, brand leaders, innovators, insights people and other team members would all agree, the strategic objective is "we want to win at shelf". Do you have what it takes?