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Forgettable Consumer Products 24 January 2005 Can you name one new consumer product that came out in 2004? Most Americans can’t. According to a survey by Schneider Associates, a Boston-based marketing communications firm, 56% of American consumers could not recall a single new product launched in 2004.
There were 31,185 new consumer products launched in 2004, according to market researcher Productscan, and companies spent $268 billion advertising these products. With all this activity, it’s surprising that most Americans couldn’t recall even one new product.
This level of forgettability is not a normal industry occurrence. In 2002, the first year that the folks at Schneider did the survey, the comparable statistic was 33%. In other words, about seven out of ten people could name at least one new product launched in 2002. In two years, it’s moved down significantly, so that now, it’s only four out of ten. During the same period, consumer advertising spending has increased from $233 billion to $268 billion.
Ad spending rises while product memorability declines
What’s going on? Here’s one explanation: products are getting more boring. As the Schneider & Co. researchers note, new consumer products launched in 2004 tended to be conservative extensions on existing brands and approaches. According to this view, people can’t remember new products because the products themselves are not memorable enough.
I don’t find this explanation very satisfying, because last year did not seem like such a different year from 2002 or 2003, yet product memorability declined. In fact, there were a number of significant new product launches in 2004, such as the Apple iPod Mini (remembered by 21% of the survey).
Even more curious, this decline in product memorability comes at a time when Procter & Gamble is crediting its improved innovative capability with its increased dominance in a number of consumer categories. In the third quarter of 2004, for example, Colgate’s profit dropped about 8 percent, while P&G’s rose by 14 percent. Clayton Dayley, Jr., P&G’s chief financial officer, told Business Week in September 2004:
"We
are growing market share in 70% of our businesses. That doesn't happen unless
you have strong innovation." Instead of looking at the product characteristics, an alternative explanation may be a structural one. As more products are launched every year, it’s harder and harder for any individual product to make an impression, which raises the costs of successful innovation.
P&G succeeds because it has the right product, but it also has the scale to get its products on the shelves and the advertising to make an impact.
Finally, we should look at the customer. Increasingly, it seems that many customers would prefer not to buy any new products at all. In 2004, 52 percent of customers in the Schneider Associates survey indicated that they “only buy new products when they absolutely have to.” In 2003, the comparable figure was 43 percent.
Not surprisingly, the most important motivation to buy is perhaps the simplest -- 63 percent of those surveyed said they were motivated to buy the new product because they “needed the item.”
The Schneider survey lends support to the “jobs framework” for successful innovation developed by Harvard Professor Clayton Christensen. Christensen noted:
“When a consumer buys a product, they are really ‘hiring’ it to get a job done. Companies are successful when they make it easier for their customers to get done what they were already trying to do.”
In 2004, however, most consumer product companies had a hard time getting their new products remembered, let alone hired.
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