Excerpted from Strategy & Business, “The Unique Advantage”, by Alexander Kandybin and Surbhee Grover, Aug. 26, 2008
Successful consumer packaged goods (CPG) innovators, those whose new products establish and maintain dominance in the marketplace, tend to focus on seven areas. None of them represents a “silver bullet” on its own, and many of them are common sense, but together they make innovation more difficult to copy and lead to greater returns and higher growth.
1. Technology and patents. New technologies … providie companies with a way to meet new consumer needs, including those that consumers don’t yet know they have. Patents can sustain a meaningful advantage in the marketplace.
2. Claims. Claims add substantial value when they are tied exclusively to a product and can be held for a significant period of time.
3. Ingredient synonymy. Arm & Hammer, Planters, and POM Wonderful, respectively, have each carved out an enviable position by becoming virtual synonyms for their category. Such domination affords pricing power for products that are essentially commodities.
4. Unique brand characteristics. Strong brands can build an identity in consumers’ minds that transcends products.
5. Product experience. Successful products have an emotional component that builds a bridge to consumers, becoming part of their lives.
6. Packaging. Packaging innovation can leverage technology, emphasize unique brand characteristics, enhance the product experience, and in fact prove very difficult to duplicate.
7. Effective vertical integration. [Keeping things “in house” can protect proprietary technologies and “secret sauces” ]
Edit by DAF
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Full article:
http://www.strategy-business.com/press/article/08306?pg=all&tid=230
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