In a blog article in which we discussed the reasons the reasons why sustainable consumer product launches are extremely rare. We highlighted two aspects that will help a company distinguish itself from competitors when it comes to introducing new products:
1. Unique attributes of the product (difficult for competitors to duplicate) in terms of packaging, technology or customer experience design.
2. Differentiated capabilities that bring consistency in your company, and an alignment between your company’s strategy and your product portfolio.
What is the best way to make this incredibly difficult blend be created? Kraft is a major player in the beverage and food industry, provides an instance. Up until 2010, the company’s launch strategy was poorly. Kraft was known for investing in small-scale ideas that failed to draw customers in the way they expected. In the words of Kraft Foods head of innovation Barry Calpino explained it at an appearance at the Consumer Analyst Group of New York conference in February 2013, the company earned an image of ineffective execution and absence of concept.
“Innovation changed into our greatest weakness,” Calpino said, “to one of our greatest strength.” Kraft accomplished this by undergoing a radical change in the selection of products it supports, looking for breakthroughs that would be challenging to replicate. The initial step was a thorough examination by the top management of the company’s method of implementing innovative concepts. The firm also hired a talented innovator who was adamant about the job. Management including the CEO participated in quarterly meetings concerning new products. They were often brutally honest (in one discussion the team acknowledged that their findings were among the worst of “every study, no matter the way”).
Kraft’s leadership also emphasized coherence, connecting their innovations to their business strategies. They increased their products’ launch strategies that utilized Kraft’s strengths. This meant that they launched smaller, more powerful and better products than they had previously, and which were developed over longer durations with more efficient execution. The team members collaborated with their colleagues from supply chain and marketing. They made a significant investment in reaching out to consumers through traditional home testing and also through partnerships with psychologists as well as anthropologists, chefs, and psychologists. (One collaboration was with SodaStream which we talked about in the previous blog article.) In addition, the company’s culture was transformed from one of isolation that were largely uninterested in the other in favor of a more intense cross-functional collaboration, and a strong sense of dedication.
The efficiency of this method was quickly evident with the introduction of platforms like Philadelphia Cooking Creme, Oscar Mayer Selects as well as Velveeta Cheesy Skillets. One of Kraft’s most popular launch was Mio liquid flavor. It was a unique, portable pod that contained mixtures for 24 servings of water flavored. The launch was heavily influenced by customer feedback and incorporated specific product characteristics that were unique to the brand. Mio featured flavors that were specifically tailored to consumers’ preferences. It is lighter than canned drinks but more efficient than powders. Mio was popular among young people who were keen on health and fitness It was also distinguished by its distinctive, spill-proof packaging that was designed to fit comfortably into bags without creating a mess.
Kraft combined these distinctive features with a suited-for-purpose set of distinctive capabilities that create consistency. The company’s market research team, aware of the preferences of the targeted audience and coordinated branding as well as social media platforms to promote the idea of “your drink Your way, your way.” An Youtube campaign with the Second City’s Sassy Gay Friend (whose online dancing was an internet sensation) contributed to the rise of Mio’s popularity. Kraft offered 10,000 free sample bottles via Facebook. Within one year, the sales of Mio exceeded $100 million and it was awarded accolades by Nielsen in addition to Walmart. To fulfill its innovative goal, Kraft created not just an entirely new product but also an infrastructure from which to develop. Since since then, Kraft has introduced Mio Fit and Mio Energy, which are flavors that contain electrolytes, B vitamins, caffeine and more. They are making use of the Mio platform for its sister brand names Crystal Light and Kool-Aid.
Establishing that type of advantage – unique features of the product, backed by a unique set of capabilities to help keep the company up — is more difficult than it appears at first. In essence, it’s about placing the biggest bet on only a handful of capabilities, and letting go of any other tasks which don’t contribute to the commitment. You must know the features that make your product distinct, and develop distinctive capabilities that will help to strengthen the uniqueness of your product.
We suggest this four-step plan to build a high-quality product that is backed by a solid capabilities system.
1. Define how your company’s or division’s approach to innovation fits to the overall plan of action. For instance whether your business is an elite or value player, or a technological innovator or a quick follower?
2. Find out the needs of the consumers you’ve decided to reach and determine the best way to fulfill these needs.
3. Develop a collection of distinctive innovations that can sustain the new products. For instance, are you winning by gaining access to your customer through innovative market research? Do you have the ability to outdo your competitors with distribution due to your exceptional front-of-store expertise? Are you planning to employ claims-based research in order to out-market newcomers? If the capabilities you are using are standard and general then your competitors could easily duplicate them. If they’re too complicated and specialized, they could ruin your margin. Look for capabilities that complement each other to ensure that they complement each other and get the most value from the investment you make in them.
If your business is a quick follower such as, for example it will require strong market knowledge and the ability to respond rapidly. You’ll need a flexible supply chain as well as the capacity to change with speed to market trends. You shouldn’t develop a low-cost manufacturing capacity that would reduce the quality of your product and negate your distinctive advantages. However If your innovation strategy is based on value then you’ll need to place efficiency and price first in your business.
4. Keep in mind that not every product is going to be hugely profitable. Try to fail quickly, cheaply and establish an environment that encourages thoughtful taking risks.
Innovations of this kind are an attitude shift that requires a bit of adjustment. However, a growing number companies are making this method work. Starting from the old-line companies such as 3M as well as IBM to relatively new entrepreneurs such as Pixar and Keurig they have demonstrated that the concept can work If you are able to deliberately blend distinct product characteristics with a distinctive capabilities, you will be able to beat your competition and generate better results.
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