Launch Products Like Entrepreneurs

Stop Trying to Squeeze Out the Commercially Unviable Ideas Before They Get to Market

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David Vinjamuri
David Vinjamuri
How does a world-class company launch new products? With a screening system that employs concept, product and use testing to narrow down hundreds or thousands of products to a few that launch with big financial support, including national advertising and promotions. Methods vary, but most large companies use the development pipeline like a funnel to squeeze out most of the bad or commercially unviable ideas before they get to market and consume valuable corporate resources.

In the past year, I've become convinced that this might actually be the worst way to launch new products. The evidence is fairly compelling that all that research fails to accurately predict consumer behavior, as the vast majority of major corporations' product launches fail. Even among package-goods marketers, known for their analytic rigor, the half-lives of most new products are short.
Clif bars

Make sure the marketer is the core customer: entrepreneurial brands life Clif Bar, Baby Einstein and Burt's Bees suggest that products that solve a real need in a unique way may never need traditional advertising.

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The problem: Consumer research tends to reward safe ideas because it takes time and cultural support for consumers to adopt truly new products. That's what yields huge stretches of retail space devoted to minor variations on the same theme. "Want baking soda with that?" the toothpaste aisle asks us.

But this is not the way to build real winners. Just ask Herman Miller, whose Aeron chair was panned as ugly when it was introduced, only to become the best-selling design the company had ever introduced.

Affording to fail
The epiphany for me came last spring when I was researching my book, "Accidental Branding." I was sitting on the deck at Clif Bar founder Gary Erickson's Napa Valley house, nibbling cheese and listening to Erickson talk about reviving Clif Bar after its aborted sale in April of 2000. I asked Erickson what was the single most valuable lesson he had learned in his 16 years at Clif Bar. He shook his head, saying: "I haven't gotten any better at knowing which new products will succeed and which will fail. The most important thing I've learned is how to launch products quickly and cheaply so I can afford to fail and still keep innovating."

Could big companies really follow the Clif Bars of the world? After all, retailers look at spending behind a product launch as a sign of commitment on the part of the brand. And new products with little support in a hostile retail environment can wither quickly. The solution is to find an alternate distribution channel for new products. Instead of bringing them to Wal-Mart, Best Buy or Costco, think about independent bicycle shops, boutique retailers or small stores. Don't spend a dime on advertising but invest time in the rationale for the product and personal time with store staff. Seed the product among those who will be selling it with samples and demonstrations. Better yet, involve them in the development cycle so they are already onboard before the product ships. Think of this as a minor-league system for promising new products.

ABOUT THE AUTHOR
David Vinjamuri is author of "Accidental Branding: How Ordinary People Build Extraordinary Brands" and adjunct instructor of marketing at New York University.
This launch strategy differs from a traditional test-market approach because it doesn't seek to replicate national advertising and branding tactics on a local level. It also doesn't take the market-research approach of sneaking a new product onto the store shelves in Scranton or Duluth and seeing whether it will take off devoid of any support whatsoever. The strategy takes a focused approach of high-touch contact with specialty outlets and generous sampling to see if word-of-mouth takes off. The timing is also different from traditional retail launches. While some products will fail quickly, many will take one to two years to prove viability. The launch channel has to be an incubator for the brand to grow strong enough to move to other channels.

What would it take to implement this strategy in a Fortune 100 company? A very different structure in the marketing organization. The good news is that it is just the sort of change modern M.B.A.s are hungry for: more responsibility sooner and more scope for entrepreneurial leadership. You have to create a brand system where individuals can champion new products and bring them to market cheaply. That means senior marketing managers must effectively become venture capitalists, placing bets judiciously around a portfolio of different solutions to the same consumer needs. It also implies a redistribution of capital from research -- which is excluded from these small launches -- to brand management, prototyping and small-scale manufacturing. These pilot projects allow marketers to follow their passions and succeed according to their talents in a more direct way rather than through the traditional career path of random brand assignments of increasing size.

Marketers as customers
One of the big lessons from "Accidental Branding" is that entrepreneurs succeed partly because they are solving problems they experience themselves. That allows their gut instinct to function properly, especially when the brands they create have narrow, focused expertise. Fortune 100 companies should heed the same lesson. When you accept pitches for new products, require that the marketer proposing the product is actually its core customer. It is that intimacy with the product and the needs behind it that add the passion that is vital for success.

Entrepreneurial brands like Clif Bar, Baby Einstein and Burt's Bees suggest that products that solve a real need in a unique and authentic way may never need traditional advertising. However, corporations with money to spend may be able to accelerate brand growth after the incubation stage with judicious promotion and advertising. By spending this money on brands with two-year-plus track records in specialty distribution and dedicated customers, CMOs can maximize the value of limited advertising funds against the brands that will most likely benefit. This strategy also elevates traditional ad agencies into the role of brand advisors, coaching young brand managers to develop brands that will eventually get a boost from national exposure.
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