Innovation. It’s what every client is talking about at the moment. Why? Because, as a result of recession-induced budget cuts, the past couple of years have seen an extended period of innovation inactivity for brands. Instead of investing in NPD, brands have been under continued pressure to massively discount to entice short term sales—but at the same time, by entering a price war they have commoditised their offer and lost the brand essence which justified consumers buying their product over cheaper branded or own label products.
Following such a period of down-trading brands are realising that, in order to fight commoditisation and create opportunities to demand a price premium, innovation is of optimum importance.
Innovation is critical to the lifeblood of a brand; it provides new opportunities to increase value and market share; it creates new news and excitement and expresses the brand’s vision to consumers. Ultimately, rather than discounting, it is a stronger way of creating an added value proposition, enhancing consumer brand loyalty and giving good reason to pay the brand premium long-term.
Innovation is a multi faceted opportunity, however, that includes not only new product and packaging development but taps into directly the way a business thinks and behaves. Indeed at Anthem we have identified four distinct areas of innovation.
1. Portfolio innovation is where a brand extends an existing product range to meet a consumer need or opportunity, such as brands’ response to the ongoing ‘supertrend’ of health and well-being. For example, a host of major brands have reformulated their product as a healthier option to break down perceived barriers to purchase—using packaging design to communicate the improvement, with greater presentation of real food and on pack graphic cues to suggest the provenance of a product.
2. Packaging innovation is whereby brands use packaging formats to deliver an improved consumer benefit or define a new usage occasion. One result of the recession has been the increase in the number of opportunities for family snacking, as consumers forego the expense of evenings out for ‘at home’ entertainment. This has led snack brands to provide an array of sharing formats such as Mars confectionery share packs and Maryland ‘snack bites’ biscuit pouches.
3. Business innovation is when businesses target specific categories of opportunity growth. This is particularly evident in arenas where the brand ‘homeland’ has become commoditised, making them look to areas of more dynamic growth. This can be done by either shifting the focus of your business or by acquiring existing brands within that category to augment your brand portfolio. Coca-Cola buying Innocent smoothies is a classic example here.
4. Brand innovation is where brands take their existing branded offer and transfer the equities of this into new categories. This can be through adapting a product process, such as bakers developing baked snacks; or it can be brands translating a strong personality to new arenas or even taking a unique flavour such as stretching into rice cakes, bread sticks and now chocolate for Christmas.
Whatever innovation route a brand decides to go down, strategic brand thinking is at the forefront of the innovation process. To help clients define the most appropriate creative strategy, we use the principle of ‘brand stretch’. Put simply, this means that the further a brand is looking to stretch away from its ‘home’ territory, the more it has to demonstrate the category codings and language of the sector it’s extending within or moving into. This is to give it credibility and permission to perform in this arena.
Getting this right is not an exact science. For instance, you have to factor in the fact that the more iconic a brand is in the first place, the greater stretch it can tolerate. It requires a high degree of both agency and client communication to determine the correct balance of brand and product coding to bring success.
Never is it more important for agency and client to work closely together than when innovating, with the agency drawing on clients’ brand and product expertise and clients having the confidence in their agency to allow creativity to breathe. Attaining the right level of brand stretch, though, is key to ensuring that new brand success is not a stretch of the imagination.
About the Author
*Ben Harris is (a former, as of June 2013) Brand Development Director at Anthem, UK. He is has been with the agency for over 6 years (formerly with DJPA Partnership), and is responsible for the strategy and brand innovation within Anthem UK, providing strategic counsel to Anthem UK clients and within the global network.