NPD SERIES ROADMAP
Part One: Necessity is the mother of innovation
Part Two: The big idea
Part Three: Building the product
Part Four: Launch (this article)

 

In the fourth and final instalment of Marketing‘s series on innovation and new product development, we take off with the launch phase. But don’t think you can breathe easy now – the new product journey has only just begun.

Long the market leader in the chocolate category, Kraft-owned Cadbury is nevertheless loath to rest on its laurels. It identified an opportunity to reinvigorate the category and play to an emerging trend – a hunger for playfulness, fun and something unexpected. Marvellous Creations, launched in April 2012, was its answer to this opportunity – a block of chocolate made up of curiously shaped pieces and out-of-the-ordinary ingredient combinations.

The product’s launch campaign comprised the usual elements of TVC, outdoor, sampling, digital and PR, as well as swift distribution, with 100% coverage achieved in all Coles and Woolworths stores 48 hours following launch, 100% in independent supermarkets within seven days and 98% in the convenience channel within four weeks.

But to help propel its new product through the clutter, Cadbury went a step further, creating an overarching campaign to tie all of its new product launches together. ‘Joyville’, a ‘magical and mythical land’ where chocolate is made, was created as a new subbrand to embody fun, excitement, surprise and delight.

Executions featuring chocolate makers on roller skates, giant cake mixers churning chocolate and purple playground roundabouts have formed the backbone of the campaign to date. Experiential has The combination of launch initiatives employed resulted in a runaway success for Cadbury. According to sales scan data, many of the Marvellous Creations variants were out of stock after just two months on shelves. The product has since achieved a 10.6% value share of total chocolate blocks and 5.9% of total bars, driving Kraft’s total chocolate share to 51.7% of the market.

For this, the final instalment in Marketing‘s innovation and NPD series, we’ll take a look at the challenges faced at the launch stage of the innovation journey.

The power of the retailers

The feeling in the market, particularly in FMCG circles, is that the growing power of retailers in Australia has elevated them to be almost as important and difficult to win over as the consumer. With the supermarkets pushing their own lines of private label goods and less likely to stock incremental innovation, brands are at the mercy of the retailers when it comes to getting products to shoppers.

Retailers won’t stock innovation for innovation’s sake anymore, says Lisa McKee, marketing manager for VIVA Towel and Cleaning Products at KimberlyClark. “It’s critically important to be able to demonstrate to retailers that your innovations will add value to their shoppers and therefore their categories… increasingly so. They’re less and less likely to range ‘me too’ innovation.”

Andrew McQuillan, vice president of innovation for Nielsen, Pacific, agrees that it seems increasingly difficult for brands to get new products ranged. “The big challenge for FMCG manufacturers is the strength of the retailers,” says McQuillan. “They’re in a very strong position, and wanting to expand private label that puts pressure on the manufacturers in terms of the space that they’ve got available.”

In order to get shelf space, brands often need to sacrifice some of their existing shelf space for the new products, McQuillan adds.

Susan Massasso, regional marketing director, Asia Pacific at Arnott’s, counts the snack food manufacturer as lucky to have strong relationships with retailers and doesn’t see a threat in them pushing private label. “There is a role for private label in the marketplace, but we’re really fortunate that we have really loved, local brands, and if we do the right thing by our brands for our consumers, they will continue to thrive,” Massasso says.

“If you’re truly growing and nurturing your brand with appropriate and relevant innovation, then the connection is between you and the consumer, and I think we can sometimes get distracted with the role of the retailer or the role of private label… ultimately, I firmly believe Woolworths, Coles and all the other independent retailers want brands to thrive as well.”

Arnott’s sees the relationship with retailers as a partnership. “To see it as a ‘them and us’ relationship I don’t think is particularly productive,” Massasso explains. “They are businesses in themselves. They have their own business needs, just as we have our business needs. So I think to see it as ‘how do we mutually benefit each other?’ is the way we look at it internally.”

Like Arnott’s, Kraft also sees the retailers as partners. Simon Talbot, corporate affairs director for the global FMCG giant, says the three key factors for getting new products ranged is having: a proven track record, a strong partnership with the retailer and a product of genuine value. “Really investing in NPD and not just line extensions – going in there with a truly new product offering that’s compelling is so critical.”

New modes of communication

Changes in consumer behaviour have ushered in a new communications model for brands to follow in order to break through and capture attention. Brands have turned to digital, and are turning to in-store theatre and experiential to generate buzz and stimulate trial.

Josh Gaudry, marketing manager in Lion’s innovation division is seeing a shift in how the food and beverage giant’s brands go to market. “Digital is playing a much bigger role than it ever has, and trying to get our heads around how consumers interact with digital is a really important part.” It’s a tool being used to play to the consumer’s appetite for discovery. “If you allow consumers to discover it for themselves and have a really strong digital plan, which allows them to discover it, they actually do all the heavy lifting for you.”

Integration is the key for Kraft. “You have to know how to pull the levers of advertising, PR and in-store, and work out that particular brands have different paybacks, according to those three or four different communication mediums,” Talbot adds. There has also been a shift to digital for Kraft, but it still sees a lot of value in traditional TVCs, print and outdoor. It’s about identifying the correct placement of your target cohort, Talbot says.

Just because digital is growing doesn’t mean that traditional spend is on the decline. Kimberly-Clark’s McKee points to a lack of traditional media support as one of the key causes of failure. “To get clever product from the shelf can be achieved; however, if you don’t have relevant and meaningful communication to drive their success, it’s very difficult to get people traction.”

The theatre of retail

At Kraft, Talbot’s finding more and more that in-store execution is critically important. “The balance is shifting between above the line and in-store execution.

Mums’ eyes are increasingly more difficult to capture, so we are emphasising in-store theatre. You might get to them at home, but when they walk into that store, my God, they need to be able to see our product or spot it as early as possible.”

Talbot advises early collaboration with retailers to execute consistently across stores. Typically, Kraft executes across the entire nation within 48 hours for new product roll-outs. It also times in-store initiatives around seasonality.

Once into market, the product has to be nurtured and constantly monitored to ascertain how it’s being received. Scrutiny of sale volume, numbers, costs and margins is required to make sure they’re holding up, says Dr Scott J Edgett, co-founder of Stage-Gate. And tracking of individual customer behaviour is required to see if the product is being adopted after trial.

“We get people to try stuff through advertising and marketing, but encouraging repeat purchase is the real key to a successful launch,” Edgett says.

Historically, Kraft would get to gate five of its StageGate process, launch, get the numbers, give itself a pat on the back and get started on next year’s plans, Talbot reveals. “Only just now are we making [postlaunch] a systematic process in the staging gate. It’s gate six now… it’s what works, what didn’t work, what could we learn from it before we can consider a new creative, a new launch, a new product development, is there something we did or didn’t do correctly?” The same philosophy applies to the creative as well – was there enough time on air, was it sticky enough, was it placed in the correct locations, do we trial it and post it again? Being more reflective and doing that in a systematic way is actually critical,” Talbot adds.

McKee believes there’s no use launching an innovation unless you continue to ensure that innovation is meaningful and meets current needs.

“The pipeline is very important,” she says, referring to an ongoing plan to continually improve and develop a product to make sure it stays relevant.

“It’s continually investing in research, it’s continually listening to comments that come through from your people advisory service, and it’s continuing to look to people needs and how you can either bring new products to market or redesign an existing product to better meet that need.”

The launch phase, a stage on which most organisations have a strong grip, is the culmination of many months of work and often blood, sweat and tears. There are a number of challenges brands have to contend with, such as the power of retailers and new modes of communication. With some in-store theatre and a nimble, iterative approach, the new product can break into consumer consciousness and continue to evolve to maintain ultimate relevance in a fast changing world.

 

Over the course of the past four issues, Marketing has taken you on a journey through the innovation and new product development process, looking at the state of the practice, emerging trends and the challenges faced at the three key stages – ideation, development and launch. Each of these three phases is as important as the other, and for each there is no right or wrong way other than ensuring a structured and disciplined approach.

With a culture that supports innovation and a mentality of agility, open-mindedness and creativity, navigating the road to success and breaking through with truly innovative new products is an achievable goal.

 

CASE STUDY: VIVA SHOWER FAST WIPES – LAUNCH

Kimberly-Clark’s VIVA Shower Fast Wipes, the innovation journey we have followed throughout this NPD series, was launched with a significant media package. It comprised TV, online, magazine advertising, social media, experiential, in-store sampling and in-store demonstrations. As a new form of cleaning product, Kimberly-Clark ensured it was comprehensive in terms of frequency of exposure to consumers and drove awareness to trial. The in-store demonstrations and extensive sampling activity was undertaken to educate and get consumers trying for themselves. Social media was key also to generate ‘talkability’ and testimonials from consumers.

Very strong uplift aligned with TV activity was found, and this culminated in driving the brand’s performance and hitting the number one bathroom cleaning product within a few months of launch.

Since launching in January 2011, more than one million packs of VIVA Shower Fast Wipes have been sold, generating over $1 million in retail sales value and a 6.5% share of the bathroom cleaning segment.