Friday, May 31, 2013

What CPG Brands Can Learn From P&G on Innovation

Procter & Gamble is the subject of a great white paper on innovation. What I like about the document is how it looks at innovation through different strategies. P&G has identified four different types of innovation a brand can have. They include:

  • Commercial Innovation – Exploits current benefits and drives new levels of trial through commercial activation of a brand (advertising, sponsorships, promotions, etc.).
  • Sustaining Innovation – Important improvements to current product offerings that enhance current benefits that enable a brand to grow share (upgrades and line extensions).
  • Transformational Innovation – Big breakthroughs on existing brands that reset competitive advantage, resulting in share gains and category growth (think Tide brand architecture, Kellogg’s Special K).
  • Disruptive Market Innovation – Creating new categories or disrupting current categories with new segments to drive true incremental consumption (think Swiffer, Kashi, Naked/Odwalla Juice)
Many times brands approach innovation as one big bucket. This model allows you to think about what type of innovation the brand needs and then focus all resources and ideation around that strategy. Planning the type of innovation a brand needs can help the brand achieve more sustainable growth.


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