Over time, if the new brand is successful, it can migrate to larger, more successful brands that the business owns. This ensures limited exposure to an existing brand’s equity initially, and in time allows the new brand to leverage the established brand’s advertising and marketing campaigns.
To effectively execute the in-market innovation strategy, companies must steer the corporate culture toward a “big tent” product development philosophy. Incentives need to be structured to encourage constant idea generation, and to a large degree embrace (or at least not punish) failure. In addition, cross-functional teams and enhanced information systems must be in place to capture market information quickly as it presents itself throughout the launch. Companies need to be certain that their decision-making processes will ensure that products are immediately discontinued after failed launches. Moreover, knowledge gained from failure must be applied to future innovation.
When companies focus on learning from real world performance rather than the time-consuming and expensive market research techniques that are traditionally used to measure customer intent, innovation is the reward. Indeed, more than anything, in-market innovation is a strategy that stresses the value of the new and the creative — the engines of business growth that few companies today can afford to ignore.
Alexander Kandybin is a partner in Booz & Company’s consumer products and media practice based in New York. He works with consumer products, health-care, and chemical companies on growth and innovation strategies.
Surbhee Grover is a senior associate with Booz & Company’s consumer products and media practice based in London. She focuses on innovation challenges in product introduction, portfolio management, and capability development.
Nami Soejima is a senior associate in Booz & Company’s consumer products and media practice based in New York. She works with consumer and media companies focusing on growth strategy and international strategy.