Marketers are constantly on the lookout for the “next big thing,” aspiring to hit a home run with a new product that contributes to profitability and strengthens the brand in the marketplace. Unfortunately, most new product development does very little to meet these aims. Why? Think about most new products you encounter - they are not very new at all. Instead, they are minor modifications of existing offerings- new colors, flavors, or sizes- not new in the sense that one would expect.
Another reason why most new products struggle to overcome the odds of failing in the market (80 to 90% of new products do not stick on the market long term) is because of an incorrect marketing focus. People want solutions to their problems, not new products. Yet, a tendency exists to focus on a product’s features and benefits. Oh sure, most products tout their point of difference, how they are better or different than competition. But, that still misses the mark of relating a product to how it adds value for users.
One example of a product that understands that marketing is an enterprise of offering solutions instead of products is Keurig. The coffee machine and single-serve beverage unit of Green Mountain Coffee Roasters got it right with its K-cup concept. The K-cup brewers and single cup varieties of coffees, teas, and other beverages make it easy and cost effective for consumers to brew drinks. And, while customers can order products directly from Keurig, they are not held captive and forced to buy from a single source. K-cups are also available at supermarkets, specialty stores, and department stores.
The impact of Keurig’s K-cup brewers is evident in that it has quickly captured a 6% market share of the home-brew market, a market that has grown during the economic downturn. An alliance with Starbucks will bring K-cup offerings of Starbucks coffees to stores this fall, further entrenching Keurig as a force in the single-cup coffee market. Its ease of use and ability to sample a wide variety of coffee products through product assortments has definitely increased this blogger’s coffee consumption. While I wanted the product (the brewing machine), what I came to experience was the solution of making beverages quickly and at a lower cost than visiting a coffeehouse.
As I sip the final few drops a cup of Green Mountain Coffee Dark Magic, the takeaway is this: strive to offer customers solutions to problems or situations. They will reward you with greater purchase frequency and brand loyalty. Products are interchangeable; solutions eliminate the need to seek out products.
Labels: Keurig, New Products