According to David Aaker, the vice chairman of Prophet and the author of Brand Relevance: Making Competitors Irrelevant, a serious threat facing most brands in dynamic markets is the loss of relevance because the category or subcategory they are serving is declining. Customers are no longer buying what the brand is perceived to make. New categories or subcategories emerge as competitors’ innovations create “must haves.” This dynamic can happen even if the brand is strong; customers are loyal; and the offering has never been better, thanks to incremental innovations.
Instead of being satisfied with being relegated to having a parity product, a firm could attempt to take over the new category or subcategory or at least to become a significant player with a substantial or transformational innovation that leapfrogs the competitor. And that doesn’t mean the old school marketing of managing the product life cycle. Adding different varieties, for example, of iced tea or vitamins is not innovation it’s desperation.
While shopping at Costco last week I was struck how the vitamin and supplement aisle has not changed much in the last two years. There are newer products of vitamins and supplements, but they are the same old thing; there is no innovation even as we are learning about new supplements and vitamins everyday. The only new product were vitamins that taste like candy called gummies. That folks is NOT innovation.
As Mr Aaaker points out Nike with its Nike + shoes and iPod Sensor is innovating by allowing a runner to hear music plus keep track of each workout. The adidas miCoach also provides a way to monitor and link each workout to a computer but it has an active forum, the ability to create a program design to fit a sport and goals, and even a contact to trainers who can design customized programs. Cisco has frequently filled gaps in its product line with an acquisition. They then added Cisco-driven synergy and systems benefits creating a leapfrog result. This is innovation.
With so many consumers switching to store brands it’s more important than every to innovate and leapfrog the competition but in addition to doing it with actual products you also need to be able to positon your brand in the mind of consumers as innovators. This means that you need to help consumers sort through all the information, and misinformation, by making them smarter and better consumers. This is why content is SO important for brands not as one brand manager recently told me “we are not content providers”. That is just a really dumb thing to say and shows that she doesn’t understand what being a market leading innovator is all about.