If NPD is to succeed, as I explained last month, your first priority is to set the bar high. Your product needs to be considered by many consumers to be better than all the alternatives in your price bracket. Good isn’t enough - you need a really excellent product. But even that alone isn’t enough. You need an equally good, and genuine, business rationale. Without one, you are unlikely to secure the support from the trade you will need for sustainable success.
What this means is a category-first rationale: the ability to demonstrate that if the product succeeds it will be good news in the long term for the health and growth of the category. But how do you show that to be true?
It’s perhaps easiest to start with what ‘category-first’ does not mean: “because we can make it”; “because we need to protect our share of space on the shelf”; “because a competitor did something similar and it is hurting us”; “because we have to be seen to be bringing some innovation to the trade.”
Whatever you say, if this is the real, unspoken rationale, buyers have a habit of reading between the lines. They have seen a lot of innovation pitches.
Fundamentals of category management, 4: Sustained launch support
So what is a genuinely good category-first rationale? It needs to demonstrate at least one of the following three things.
First, the innovation can bring new shoppers to a category. In other words, it appeals to people not currently buying the category. Take craft gin. Several new players have attracted new consumers (and younger consumers) in droves with interesting products, smart design and great provenance stories. Which spirits buyer isn’t going to be interested in brands that can offer that kind of category rejuvenation?
Second, the NPD takes the category into new consumption occasions. Take cheese. It has products designed for snacking, sandwiches, cooking and foodie indulgence. The more occasions a category fits, the bigger the category is. Cheese is a huge category because it has pervaded so many eating occasions by designing products that fit.
Third, the innovation meets developing needs and trends. Food fads and trends are moving faster than ever. Pace of response is essential. The category that can quickly offer the right ingredients (for example, turmeric) and harness the right needs and trends (veganism, clean eating) will grow faster than the category that is still thinking about it.
So if you can genuinely argue a category-first rationale and have a great product, you are set fair for success. But it still isn’t always enough. There is one last piece in the jigsaw. You will need to support the launch and establishment of the innovation to make sure it takes root for long term success.
More on that next time.
Jeremy Garlick is a partner of Insight Traction
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