Look Before You Leap

A Sad State Of Innovation

I began to notice that products were becoming less innovative at an alarming rate in the mid-1980s. To prove my hunch, several associates and I developed an Innovation Index to measure whether each new product shown at trade shows or launched into the marketplace actually offered consumers a meaningful difference from existing brands.

To establish a base, we assigned an Innovation Rating to every product we were aware of that was new from 1980 forward. To qualify as innovative, a product had to offer consumers a significant new or added benefit in one of the following five areas: formulation, positioning, packaging, technology or previously unmet market need.

According to the Innovation Index we developed, only 18.9 percent of new products in 1986 could be considered innovative. That was a startling number, even lower than we anticipated. By 1989, however, the percentage had dropped to 13.4 percent. The following year, it plummeted to 8.4 percent as a national recession took hold. By 1993, the figure was down to about 5.1 percent, although it has been inching its way back up and reached 7.2 percent in 1995.

Here are the five criteria we used, with examples of products that qualified, and did not qualify, as innovative when measures were applied:

1. Is the product positioned to new users or usage? Rembrandt Low-Abrasion Whitening Toothpaste for Kids represented a new positioning for whitening toothpastes and was therefore considered innovative. Previously, teeth whiteners had been pitched to older consumers with yellowing teeth or to smokers.

On the other hand, Topol Smoker's Toothpaste had been out for five years when Zact Smoker's Toothpaste tried--and failed--to carve a presence in that market.

2. Does new packaging provide a consumer benefit? Smucker's Beverage Division introduced a six-ring carrier to its fruit-based beverages that was made of pressed biodegradable fibers instead of the plastic found on most multipacks. This innovation provided an environmental benefit that's important to many consumers.

In the early 1980s, Colgate-Palmolive introduced a powdered detergent called Fresh Start that was packaged inside a clear plastic bottle. Innovative, again. After a while, Stanson Detergents came out with a box of concentrate that featured a clear cutout on the front panel through which the consumer could see the detergent. There was a bottle outline printed on the panel that carried the slogan "No bottle inside, that's why you save!" The package looked different from other packages. But the clear cutout existed solely to position the product against Fresh Start. There was no perceptible benefit to the consumer.

3. Is value added through a new formulation? Soaps and shampoos have come in many scents and varieties over the years, but St. Ives Swiss Formula Vanilla Shampoo was, to my knowledge, the first toiletries product to use a vanilla scent. Because scent is so important to the health and beauty aids category, it was clearly an innovative product.

The cinnamon spice version of Accents Potpourri Glass Cleaner, however, was little more than a gimmick. The world did not need a glass cleaner that smelled like a mouthwash. Since no value was added to the glass cleaner, the product was not innovative.

4. Is there a technological introduction? Salem Preferred Menthol cigarettes were manufactured using a proprietary paper technology that purportedly made the odor of a burning cigarette less offensive to nonsmokers. Although it was a misguided idea because it addressed the wrong market, it was technologically innovative.

General Mills' Mrs. Bumby's Potato Chips, however, were nothing more than a copycat version of Procter & Gamble's Pringles Potato Chips. Mrs. Bumby's chips came stacked in a circle around the edge of a resealable "Flavor-Pack Bowl" instead of being stacked in a canister as Pringles were. The presentation was the only major difference between the two products; the production technology was basically the same. It was not innovative.

5. Does the product open up a new market for the category? Arizona Iced Tea Freez-A-Pops was probably the first beverage, and was certainly the first tea, to become a freeze-and-squeeze ice. It was a clever way to introduce the taste of tea to kids who, on a hot day, love to squeeze slushy ice crystals into their mouths. Three Musketeers ice cream bars were not innovative because other candy bars were in freezer cases before them.

You don't absolutely have to be innovative to succeed. A Three Musketeers ice cream bar tastes different than a Snickers does, after all. But the number-one killer of new products is, without a doubt, Me-Tooism.

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This article was originally published in the April 1998 print edition of Entrepreneur with the headline: Look Before You Leap.

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