• by Bruce Miller , November 10, 2008

Ask the director of innovation or a brand manager at any large company and they're likely to agree that launching an entirely new brand, even in the most robust economy, is an enormously risky and costly undertaking, to say the least. The time and energy that goes into the product development process, paired with sizable capital investment costs, manufacturing, launching and marketing a new totally brand, can be a daunting proposition, even in the best of times.

 

Another crucial consideration is sobering success rate statistics, with some studies suggesting that four or more of every five products in development are doomed to failure. Not many directors of innovation or brand managers have the internal fortitude or the financial resources to expend this amount of time and effort, only to have their new brand crash and burn, especially in these quasi-recessionary times.

With shrinking budgets and the need to stay one step ahead of the competition, shareholders and CEOs are asking, "how's our new product pipeline looking?," what's an innovation team to do? One high-impact, cost-conscious thing to do is "stop agonizing and start optimizing." As I see it, the next best thing to developing a whole new brand is optimizing an existing one.

We're not talking about simply turning the flavor knob to "11" and slapping on a "New and Improved" violator. Product optimization can take many forms, including: close-in product enhancements flanker products that utilize similar production lines line extensions that leverage existing brand equity but in new forms.

The best way to optimize a product is to bring it up to date and in line with changing consumer needs and trends. Kellogg's Frosted Flakes recently accomplished such exciting changes with its introduction of Frosted Flakes Gold, which acknowledges the consumer's need for BFY (as in better-for-you) products by adding a touch of honey to whole-grain flakes.

This same trend also inspired marketers like Frito-Lay to develop brand extensions like All Natural Cheetos and Cheetos Cracker Trax. That's not to mention the plethora of "100 calorie packs" flooding the market.

Marketers also need to look at their innovation efforts from the consumer perspective. With tightened belts and reduced disposable income, consumers are far more likely to try an optimized version of a brand they know and trust as opposed to a totally new and unknown entity. These types of brand "siblings" are also more likely to translate to the incremental volume and the added revenue that companies, large and small, need to weather the current economic storm.

So what are some basic rules of thumb a company can follow to help insure product optimization success?

• Start by understanding and preserving the brand DNA. Don't try to create something the brand doesn't stand for or can't support.

• Search out unmet consumer needs your core brand may not be currently delivering on.

• Avoid the "New and Improved" route. Look to more meaningful product optimizations that will increase your brand's market share by attracting new users as opposed to just "upping" the satisfaction level of currents users.

• Cast a broad net in the concept development stage. Brand groups, including their innovation counterparts, have usually been on or around a brand so long they risk becoming myopic. Bringing in outside product development experts can greatly increase your chances for success - just be sure to choose experts with a winning track record.

• Look for final solutions that provide the maximum leverage for your existing brand's equity with minimum capital investment.

The bottom line is that full-up new product innovation and existing product optimization each have their own time and place. It just so happens that this place in time may be much more appropriate for one than the other.