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    BRAND Direct Mail Blog

    Innovation Never Stops 

    Monday, November 21, 2011

    Innovate when times are tough?

    So the economy is not so great.  The overall business climate is sour and even your particular category is not showing growth.  It may be a business manager’s first reaction to curl up in a ball and get into a defensive mode.  Focus only on the essentials, shift money away from marketing and worry about remaining afloat by doing the bare minimum. This is a crucial mistake that has cost many businesses big time since the recession first hit in 2008.

    However that is not the tactic of the market leaders in the $74 billion soft drink industry. The category has shown no growth for 2005 to 2010 ( -6%) due to more Americans shifting to healthier options like juice and bottled water.

    But hail the marketers from Pepsi, Dr. Pepper and Gatorade who continue to harvest new ideas, products, services in 2011 to increase sales and market share.

    Take Diet Pepsi for example. Diet Pepsi spent $53 million on measured media in 2006. But for the years 2007-2010 they spent only $500,000 combined! Thus the brand became stagnant and sales declined further than the overall negative category trend. How has Diet Pepsi been innovative this year one might ask? They have unveiled a major new marketing campaign focused on a new concept – the skinny can. The new product will be marketed as an innovative new design with an appeal to psychographic needs.  Behold the obvious connection of the skinny can for a diet beverage and the need to help the consumer maintain a skinny physical appearance. And the campaign will be released during fashion week with the phrase “getting the skinny ,” as in getting the latest scoop on fashion and culture trends.

    However re-packing an existing product may not be enough. While rolling out a brand new product or service in a down economic climate may be a risk – it is a risk that is usually worth taking. Businesses on every level must avoid becoming stagnant. Another soft drink giant – Dr. Pepper released its newest product this year - Dr. Pepper 10. Dr. Pepper 10 is the first soda to have a reduced calorie option (different from the standard “diet” soda) – other than the two biggest names in regular cola – Coke,  which has Coke Zero, and Pepsi, which has Pepsi Max. Both Coke Zero and Pepsi Max have become successful brands.

    The soft drink was developed after the company's research found that men shy away from diet drinks that aren't perceived as "manly" enough. If other soda brands (maybe Mountain Dew10 or Mug Root Beer10) released similar products before Dr. Pepper they would have had much more difficulty establishing a consumer base. Since Dr. Pepper is the innovator in the category of non traditional “diet” soda, they may gain larger base of consumers.  All because they took the risk of innovation.

    Gatorade, owned by PepsiCo, launched The G Series during the 2011 Super Bowl. Gatorade is a multi billion dollar brand and obviously careful consideration has to be taken before messing with the mother load, the original formula. The launch of a three stage hydration system consists of Gatorade Prime 01, Gatorade Perform 02 and Gatorade Recover 03. The launch was preceded by scientific hydration research, a study of sports performance nutrition, thousands of in-use tests with athletes, consultation with an athlete advisory group and extensive consumer testing.

    Despite the downturn, all of these companies invested in their brands, kept an ear to the consumer and committed resources to stay on top.

    Think about what you can do with new ideas & trends. Try new combinations of your products and services and don’t be afraid to take a calculated risk - after you’ve done your research and testing.

    Pepsi and "G" Gatorade are  trademarks of Pepsico.

    Posted by Paul Gibbins Comments (0) Trackbacks (0) Permalink

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