What Makes a Product Innovative?

brand-as-business bit:  Nielsen recently released its “2012 Breakthrough Innovation Awards” in which it recognized new CPG product introductions that met its criteria for innovative-ness. The winners are an interesting mix (Glaceau vitaminwater zero, Chobani, and Zyrtec top the list) and the report is an informative read about the CPG industry and instructive about innovation in general, so I suggest you take a look.

Some choice nuggets:

  • Nielsen applied four criteria:  distinctiveness, relevance, category impact (defined as higher than average sales velocity – because “high sales velocity brands help grow the category overall”), and endurance
  • Only 34 (less than .5%) of the 11,000 new products introduced between 2008 and 2020 met the criteria.
  • One common theme across the winners was identifying unmet demand – “Consumers do not buy products so much as they hire brands to perform jobs in their lives. This may not sound like a big deal, but a flawed initial frame of reference – such as focusing on product features, demographically-defined segments, or competition – compromises the effectiveness of all subsequent steps.”

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  • Innovation can be systemic or incremental. “New” is not required “better” can also be compelling and generate tremendous value. Innovation can occur across the marketing mix (product, channel structure, price models, or promotion) or operation.
    The definition here appears very engineering and product centric. I would encourage a broader systemic view. More often than not it’s the business model innovation in tandem with new engineering that has the tectonic impact inferred to in the definition.

  • frank — i don’t disagree with your comments, but in fairness, the survey was on the CPG industry so by definition it would focus on products/manufacturing. Your point about business model innovation is very important — denise lee yohn