Innovating: From Toothpaste To Nutraceuticals
Communicating benefits a key to innovation.
By Greg Kitzmiller
In this issue we profile Industry Innovators. This seems a good opportunity to look at the concept of innovation. Clearly innovation means bringing about something new. This is the dictionary definition. Yet just creating a new product does not mean that the product will be valued. In fact, the Wall Street Journal recently reported that consumer product makers introduced 31,000 new products last year (“Too many choices…” Emily Nelson, B1, WSJ, 4/20/01). This figure also included line extensions, which the article suggested are making consumer choices too difficult. It is obvious that just bringing something “new” to the market does not mean successful innovation.
For an example of innovation, let’s look at Colgate and the toothpaste category. Colgate toothpaste has become the number one seller, taking that spot away from Crest. Colgate accomplished this task partly by introducing toothpaste named Colgate Total in 1998. The problem with the toothpaste aisle in supermarkets is that it may be just too confusing (sound familiar?). Toothpaste comes with whiteners, baking soda, fluoride or breath fresheners, just to name a few options. But Colgate Total provides an added benefit—it is approved by FDA to fight gingivitis and is priced above most other toothpaste brands. A new FDA approval with an all-in-one product is more innovative than just another whitener.
Now that Colgate has Total, while it still introduces new products, it has been careful not to flood the market. In fact, as many other brands have recently tried to compete by adding remineralization agents to toothpaste, neither Procter and Gamble, maker of Crest, nor Colgate, has promoted these agents, partly because Colgate feels it has already made this a part of its brand (“New Products Aim to Repair Damage of Early Tooth Decay,” Tara Parker-Pope, WSJ, 4/21/01). Yet Colgate’s company growth is greatly dependent on new products. The firm launched 19 new products in 2000. But it now deletes an item for each new item it introduces so it does not create more confusion in categories where it competes. (Colgate’s net rose…,” Emily Nelson, WSJ, 2/2/01). It seems to understand that the consumer must see clear benefits. A firm cannot rush one more line extension to market hoping that if a consumer does not like the current brand offering, then a line extension may provide a better option. Providing too many options is not innovation.
The Communication Connection
Communicating benefits is the challenge of all consumer products companies and certainly a theme in the nutraceuticals industry among this year’s Industry Innovators. When I talked with three different employees at three very different organizations about their bosses who are profiled in this issue as Industry Innovators I heard a common theme. Nancy Green came to Tropicana with an idea about communication of nutrition health benefits, according to Carla McGill, Ph.D., R.D., manager of nutrition science for Tropicana. “Nancy has a capacity to see the big picture,” she said. Similarly, Wayne Silverman, Ph.D., CAO, at American Botanical Council, said Industry Innovator Mark Blumenthal, “saw what was needed before people knew they needed it” in the herbal products industry. Finally I spoke with Rhonda Witwer, marketing director at Galagen, about Bob Hoerr, another one of our Industry Innovators. Her comment: “Bob comes up with multiple suggestions for a way to get things done.” This suggests that innovators are visionaries with leadership skills.
The American Botanical Council, headed by Mr. Blumenthal, has taken the leadership in communication about herbals. According to Dr. Silverman, ABC was the “first organization to come out with a ‘behind the scenes’ media education effort...to try to put out information [media professionals ]are missing.” Likewise, Dr. McGill at Tropicana talked about the importance of communication in new products, commenting, “A new product doesn’t have to be truly a new ingredient or nutrient but can be how you talk about new information.” She added that the food industry is moving away from communication that is ingredient specific and moving to communication about benefits that consumers understand and about which they are concerned. Thus, innovation can be how one communicates a benefit rather than a new substance, pulling from both the American Botanical Council and Tropicana examples.
One model suggests that there are at least two types of innovation (Solomon and Stuart, “Marketing, Real People Real Choices,” Second Edition, Prentice-Hall, 2000). One type is continuous innovation and fuels many line extensions. This suggests that a product can be regularly updated without any change in the behavior of the user. People may be attracted to a brand or remain loyal to a brand because of the continual updates based on real benefits. This relies on a strong brand entry in the first place. Tide powdered laundry detergent from P&G might fall into this category since the brand has been available for years but it keeps share by having the latest cleaning technology found in a powder. Centrum multivitamins also fall into this category as the company continually updates its multivitamin in order to position the product as complete.
A second type of innovation might be called discontinuous innovation. This requires some change of behavior for the user. The personal computer has replaced typewriters but also when connected to the Internet is replacing many telephone calls. So the behavior of the user is different than it was before the PC. Some dietary supplements have changed behavior as they are used for body function and may supplement other health treatment as opposed to the old model of supplementation, which only assured the user he or she was getting enough vitamins.
Most firms that are successful will be engaged in the development of both continuous and discontinuous innovation. Firms like P&G will update existing brands and at the same time attempt to introduce new products with discontinuous innovation. One of P&G’s latest products in the healthcare arena is described on the company website as, “By applying the latest research and technology, P&G scientists have discovered a breakthrough in wearable pain relief” (old category, new idea). The new P&G product is a wrap that delivers heat while worn for up to eight hours. This is an example of discontinuous innovation. According to Solomon and Stuart, for discontinuous innovation the job is to educate the consumer about new uses. Firms need a balance between the need for continuous and discontinuous innovation. Older brands must stay current. At the same time the consumer expects new technology and truly new products.
Bob Hoerr, CEO of Galagen and industry innovator, understands this. His firm switched from pharmaceuticals to nutraceuticals. He says in nutraceuticals a major challenge is, “trying to fit existing models for doing business.” He explained, “The roadmaps haven’t worked because there are no roadmaps!” Galagen is mapping new roads by forming alliances with traditional marketers to launch innovative products. Mr. Hoerr feels the firms that succeed in the future will have built the story around science for their products. Communication of clear benefits is needed.
