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MANILA, Philippines – One in every 100 new products launched in Southeast Asia meet key innovation success criteria for distinctiveness, relevance, and endurance, according to the Breakthrough Innovation Report, a new report published by Nielsen N.V. released Tuesday, March 17.
Based on the Nielsen report, only 2% of the 2,500 consumer product launches in the region and those belonging to the top 20 fast-moving consumer goods (FMCG) met the fundamental criteria for a successful product launch.
Standing out among these consumer products is the Philippines’ Emperador Light, regarded as the biggest selling brandy in the Philippines. The brand achieved an astounding 600% growth in its second year, following a successful first year, Nielsen noted.
How to become a breakthrough, innovative product
Though its subsidiaries, Emperador Incorporated manufactures, distributes, and bottles brandy and other alcoholic beverages in the Philippines. Apart from Emperador Brandy, Generoso Brandy, and Emperador Light brand names, it is also behind flavored vodka, gin, and tequila beverages under The BaR brand name; and distributes Ernest & Julio Gallo wines and Pik-Nik potato snacks.
Emperador Light took two years to be developed. Focus groups were organized to understand the local taste buds, eventually leading to the discovery that Philippine consumers do not like alcoholic beverages that gave them a burning sensation.
The brand message was about success, the aspirational lifestyle, and how “everything is lighter and more fun.” The product was also made widely available as possible across both traditional and modern retailers.
“This supports the product’s all-inclusive positioning. The product is meant for ‘anyone and everyone,’ appealing to both genders and all income groups. No one is excluded,” Emperador Light said.
Thus the bottle sizes also comes in different varieties – for individual or group consumption. Its lean organizational structure also made it possible to make quick decisions about scaling up production to avoid any loss in momentum.
Sales from the new product boosted Emperador’s overall performance and put the brand back on the right track. “It was clear for us that the way forward was in the ‘light’ category. This is what consumers want and our products needed to evolve with their tastes,” it said.
Emperador added that while the company’s core product or traditional blend brought it to its current status, it also acknowledges the need to be relevant with the new and emerging generation of Filipino consumers.
Top breakthrough, innovative products
Along with Emperador Light, Nielsen also cited Japanese skin care line Hada Labo in Thailand and Nestlé’s Lactogen 4 in Malaysia.
Topping the breakthrough innovative products in the region is Hada Labo. It entered the highly competitive skin care category in Thailand and knew ahead what would keep it ahead of the game: flexibility, steadfast focus on creating a new niche for its products, and delivering on its commitment of superior quality.
Hada Labo also successfully leveraged online channels to generate significant online buzz around its products and drive consumer recommendation – a powerful endorsement in Thailand.
Hada Labo is now ranked among the top 10 facial skin care products for women in Thailand, and achieved 6% growth on its second year, off the back of a strong first year.
Meanwhile, the launch of Nestlé’s Lactogen 4 offering in Malaysia was driven by one simple, powerful universal insight: mothers want their children to grow happy and healthy.
From there, the Nestlé team identified a need to extend its existing Lactogen range to cater to children beyond 3 years of age. Nestlé’s target market, the Malay community, largely resides in rural Malaysia and are lacking in knowledge about food nutrition. Nestlé thus bridged this gap through healthcare professionals and government clinic nurses.
The Nestlé team also went to great length to adapt its range to local cultural and religious norms, as well as simplifying the scientific messaging on its packaging. The launch of Lactogen 4 in Malaysia was a resounding success, and in its second year the product achieved 74% sales growth over its first year, Nielsen noted.
What drives innovation
Tobias Puehse, Nielsen’s head of Innovation Analytics in Southeast Asia, North Asia, and Pacific, said thousands of new product launches fail in their first year, costing businesses millions of dollars.
Puehse said, that “successful innovation is about deliberate attempts to touch all aspects of the innovation process and challenge everyday norms, such as consumer attitudes, long-standing beliefs, launch mechanics, organizational behavior and disciplines.”
The Nielsen report also highlights growing investment in innovation by local giants. Although big-budget product development is traditionally the realm of global brands, the local giants are increasingly driving their own home-growth innovation, with 54% of innovation successes driven by local giants.
Hada Labo, Emperador Light, and Nestle Lactogen all keep the consumer’s needs central to innovation investment. They understand the consumer and competitive landscape, and focus on innovating for local market needs rather than a globally-scaled approach, Puehse noted.
“Breakthrough innovation is possible in any company, country and category. What’s most important is that companies remain focused on consumer needs versus exclusively focusing on driving production scale,” Puehse said. – Rappler.com
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