Three months to determine success
Innovation is a vital differentiator in today’s crowded markets, yet it carries real business risk. A market research expert, Cesar Valencoso, shed light on how innovative companies gain a clear edge. The takeaway is compelling: mass consumer brands that execute truly innovative moves grow significantly faster than those that don’t.
Valencoso outlines what counts as innovation in his study, not merely a flashy product name or packaging. The key traits are novelty, a sharp focus, broad yet strategic distribution, and a clear, differentiated value proposition for consumers. The findings underscore that innovation is not simple; it requires disciplined execution and thoughtful planning.
From the study, only about one in five launches can be labeled successful. The trend shows that success is becoming rarer, and prudence tends to outperform surprise. This dynamic creates a challenging cycle for brands, widening the gap between innovative leaders and others. Those leaders tend to command higher prices and stronger product penetration on average.
Three months to determine success
Valencoso cautions that pushing forward with an idea just because it has promising potential is not wise. The data indicate that in roughly 80% of cases, it is possible to gauge whether an innovation will succeed within three months. The objective should always be profitability and economic viability. “A strategic plan should use innovation as a means to reach clearly defined goals, not merely as an end in itself. Innovation is a powerful tool, but it is also costly and complex. Successful innovation requires efficiency: a small number of initiatives that are well conceived, meticulously planned, and strongly supported from the outset,” Valencoso notes.
Valencoso also presents eight guiding principles that brands can follow to improve their odds. These recommendations apply not only to consumer goods but to any competitive business where differentiation fuels growth and survival.
These are the eight golden rules:
1. Contribute something new. Innovation begins with a product that genuinely solves a problem in a unique way.
2. Be focused. The strongest innovations connect with broad audiences while delivering a precise benefit to a specific group. Examples like lactose-free milk and plant-based beverages illustrate this approach.
3. Ensure discoverability. Strong distribution at launch correlates with higher success: when distribution exceeds about 60%, the likelihood of success rises markedly. The early distribution phase, with its delicate shelf presence, is the most crucial period for securing visibility.
4. Make it visible. If customers cannot see the innovation on shelves, all launch efforts may fall short. In-store packaging and clear communications should be emphasized before broader campaigns.
5. Create syncretic value. The most enduring innovations blend several growth drivers, such as being healthy and tasty, or practical and nutritious.
6. Back it up with support. To reach homes, sustained investment in advertising or promotions from the start is essential.
7. Keep it incremental. Growth should extend beyond the launch, expanding alongside the parent brand. Otherwise, the risk of cannibalization could erode profitability.
8. Reevaluate the offer. Innovation requires meaningful investment, and profitability hinges on charging a price premium that customers perceive as delivering real added value.