• Forbes, Wednesday, November 8, 2006 11 AM

Consumer-goods manufacturers should take a harder look at repositioning products for new segments, uses and occasions--particularly when innovative products seem rare, according to a new study of 480 product launches by McKinsey & Company.

When the repositioning of products in new categories was paired with incremental innovation--the use of an existing technology to enhance a current product--revenues improved as much as they did for breakthrough products.

For example, General Mills' Yoplait modified an existing yogurt item (primarily by whipping air into it) and repositioned the resulting product, dubbed Whips, as a dessert. Likewise, the company launched a vitamin-enriched yogurt drink, Nouriche, to attract health-conscious consumers. Sales of these two products grew four times faster than the yogurt category as a whole, and accounted for nearly 20% of Yoplait's total sales in 2005.

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