Recessions aren't usually good times for new product launches. Sure enough, in this downturn consumers have been sticking to familiar products on grocery lists and avoiding impulse buys.
Marketers have responded by cutting back on introductions. Mintel International recently reported that new food and drink product launches dropped 51% from the first quarter of 2008 to the same period this year.
The lower activity actually spells opportunity for marketers, according to Krista Faron, senior analyst at Mintel, who spoke with me last week.
“There's a better chance to break through the clutter today as more competitors have slowed their innovation,” she said. “Those that have used the downturn to their advantage changed the point of reference for consumers.”
Following is more insight from Faron into this opportunity in the form of innovative marketing strategies:
“Trading Over”: Marketers are helping consumers not just to trade up or down, but also to “trade over” — that is, to “make substitutions that work for recession-minded lifestyles” while still preserving a desired experience. One new product example is Starbucks VIA Ready Brew coffee, which allows for a new, home-based Starbucks experience that is more affordable than coffee at one of the company's outlets. Another example is Tide Total Care from Procter & Gamble, which enables users to obtain certain dry-cleaning-type results at home with prices below those of professional dry cleaners.
Tweaking the Health Message: Some believed the recession would kill the health and wellness trend in food as consumers avoided pricier items. But just look at the momentum around products sweetened with herb-based stevia. These items are priced competitively with those made from other sweeteners, but they bring the additional benefit of a natural, low- or no-calorie result.
Selling Convenience: P&G's Olay Professional Pro-X line of dermatological products competes with prestige items from high-end designers. But unlike many designer products, Pro-X is available in mass channels including food stores, taking a category “from prestige to masstige.”
Optimizing Portfolios: This isn't so much about new products, but new ways of using innovation to promote core brands. Kraft Foods recently launched its iFood Assistant, an application for the iPhone that facilitates lists and menu planning, all of which help raise the place of Kraft's products in the consumer's eyes.
Given that the economy is a moving target, how can marketers plan for launches down the road? Faron observed that probably the best strategy for marketers is to diversify portfolios enough to cover their bases for a range of economic environments.
That's good advice. In the meantime, keep in mind that this is a good time to break through the clutter with innovative strategies. That's not something we hear too often and it's unclear how long that window will remain open.
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