Jack Gordon, President, AcuPOLL Research, Inc.

I am always surprised to find that, at the start of an economic downturn, so many companies are willing to withdraw support of new product efforts. With fewer dollars to spend, companies immediately reduce marketing costs, taking some of that spending to the bottom line. Withdrawal of company support of new product efforts would seem to ensure continued (and well-founded) company support of current products that have been selling well. It seems apparent that new product efforts would be the easiest of all expenditures to eliminate in order to protect vital current sales.

The fallacy in this thinking, however, is that the downturn itself tends to affect current sales, and lack of new product activity to replace these lost sales results in lost revenues. In any downturn, non-value oriented, branded products are likely to be adversely affected by the resulting consumer reaction to the economy. This is especially true during the present downturn, which is both severe and long-lasting.

Value-Added Benefits
But, are consumers really buying fewer products? Have they largely left value-added products for store brands and value products? Certainly some consumers have responded by trading down for value. And, some have probably compromised in other areas — convenience for better pricing, as an example. But, many of these tradeoffs occur quite simply because consumers are able to get the same key benefits they demand, with cheaper brands (as many of these products pretty successfully copy major branded items).

The key is to make available value-added brands that offer additional benefits not found in store or price brands. In other words, stay ahead of store or price brands by delivering benefits for which consumers are willing to pay extra. This requires a focus on identifying key category insights that consumers will be willing to trade up for and concentrating on adding value, not just competing on price. This focus on insights will also allow companies to identify good ideas earlier in the process, spending less to screen rough ideas.

Sadly, many companies underestimate the long-term effects of completely shutting down the new product development process. Restarting development efforts is not a day-to-day or month-to-month tradeoff. Knowledge and expertise are quickly lost when efforts are stopped. Knowledgeable, key personnel are let go or reassigned, pertinent information is filed away (and often lost), and new personnel will often start over rather than go back to the stopping point of their predecessors — especially wary as it was at that particular point that the plug was pulled, erroneously indicating that management was simply dissatisfied with that particular direction.

In Senate hearings last fall, Chrysler rightly lamented the decision to stop new vehicle development, saying in effect that even six months of stopping these efforts would push back new development several years.

Protect Your Products
So, how do companies that are good at new products protect their new product programs in these times? These companies must commit to continue new product developmental efforts, and resolve to work smarter — something accomplished by having consumer insight-focused creative efforts. Correct identification of key consumer insights represents the quickest, easiest, most cost-efficient and most successful approach to new product development. One benefit of this is that a large quantity of new product ideas are not necessary, as this insight focus allows companies to concentrate their development efforts on fewer ideas and products, while continuing their new product efforts at a more reasonable cost.

New ideas based on consumer insights keep new product efforts focused on big ideas. An insight focus reduces the number of ideas needing development and save both creative and research costs.

It is just as important to quantify insight strengths early in the process, as chasing weak insights can be as unproductive and expensive as not using consumer-focused insights at all. It is not necessary to wait until you have enough information for a full concept before you test out your insights and the benefits you can possibly offer to satisfy your consumers. Testing early allows marketers to weed out unpromising directions earlier in the process — at a lower cost than full concept testing.

By identifying the strength of the insight separate from a full concept, marketers are able to look at different ways to deliver the insight, should their first attempt at a concept fail. Many times, the insight is thrown out with the product idea when the concept fails. By successfully identifying that they have found a strong insight, new product marketers are able to look at different benefits and various executions of the insight and find the best possible combination to excite consumers.

See the Bigger Picture
Once a key insight and resulting benefits have been determined, the challenge becomes one of developing a full concept, product, package, and message that lead to a successful introduction. To accomplish this, it is not enough to simply find an insight; the key is to stay focused on the insight at every step along the introductory process. The concept (the promise), the product (the fulfillment of the promise), the packaging, and the messaging should all be designed to fulfill the desire that led to the consumer insight, originally.

If the consumer recognizes "her" insight when it is presented in an affordable new product, why wouldn't she want it? And, if it represents a step forward for the category, she won't see price or store brands as being reasonable alternatives.

Maintenance of share and profits in a recession requires preservation of your new product efforts, and to make those efforts directly focused in such a way as to save both time and money in getting those key new products to market.

Jack Gordon is president of AcuPOLL Research, Inc., a leading new product and packaging research company.