Transcript
Professional Prospective
Don’t let your assets become your innovation liability Published in Packaging World Magazine, May 2007, p. 112 Written by Peter Clarke, President, Product Ventures Let’s face it—innovation is all the rage, and packaging is proving to be
should be taken to make packaging less of an afterthought, and more
the new frontier. The proliferation of channel surfing, web browsing,
of a focus for the brand.
and shortened attention spans in general have diminished advertising’s
• Consider the package sooner in the product development process.
effectiveness. Not surprisingly, brands have come to rely more heavily on the package to make the sale. Consumers are savvy—they demand packaging solutions that meet their aesthetic and functional needs. And, they are willing to spend discretionary dollars on products that answer the call. At the same time, manufacturers count on packaging to differentiate products at the shelf and create impact. In light of these expectations, brands need to create a compelling point of difference if they intend to keep their competitive edge. And yet, most brands seeking game-changing design confront a frustrating dilemma: How to create break-through packaging innovation without hurting the bottom line?
The power of packaging
• Re-think the marketing mix to include packaging. When packaging is built into overall marketing budgets from the outset, more dollars can be dedicated to package development. Just as advertising and direct marketing results can produce measurable ROI, so too can packaging. • Investigate alternate manufacturing options, such as co-packers. Subcontracting the package assembly provides a temporary way of proving the opportunity with minimal effect on current manufacturing assets. It is a means of “testing the waters of innovation” without committing to a significant capital investment. • Include packaging cost-of-goods in your long-term strategic planning. True packaging innovation may need to be forecast over 10-plus years, as opposed to the short-term profit calculations that currently exist. Invest in packaging, as opposed to settling for off-the-shelf solutions.
Packaging, in concert with the product, is an effective communicator of
It takes time and money to create a new package structure that a con-
a brand’s core identity. It is the key opportunity to influence consumer
sumer desires and can afford...that a manufacturer can produce
perception on the shelf. Beyond the shelf, its influence continues long
for a profit.
after the purchase is made. Manufacturers have come to recognize the
• Involve consumers early and often to inform various touch-points
power of packaging to provide functional benefits beyond containment and preservation.
throughout the design and development process. Consumer feedback serves to validate the sales appeal of an idea. It also works to
They are beginning to understand the important role it plays in creating
strengthen the conviction of cross-functional team members to do
brand value and delivering consumer delight. Additionally, store brands
whatever it takes to turn the idea into a manufacturing reality. Strate-
have become more sophisticated over time. For brands to sustain and
gies founded on accurate and actionable consumer insights help
grow their market share, they must give consumers a reason to pay
neutralize the conflicts that arise between internal departments. They
more for the name that goes on the product. Packaging can add value
may want to work independently to protect their own self interests, but
and uniqueness that will help build and maintain brand loyalty.
consumer insights help them truly work together toward one, game-
Barriers to innovation
changing result.
Despite this recent realization, traditional business models relegate
When it comes to packaging innovation, one thing is clear: companies
packaging to an expense line item. They do not see it as a marketing investment. Packaging has been commoditized by our need to standardize forms for high-speed, high-volume manufacturing. Businesses calculate their profit margins based on the efficiency with which existing production lines run. Companies also see the start-up costs for building new lines (or re-tooling the old) are exorbitant. Existing production assets, in many cases, become an innovation liability.
The solution It is clearly controversial to suggest gutting and rebuilding manufacturing facilities in the interest of innovation. Yet, it is certain that packaging investments need to be made to achieve and maintain differentiation and competitive advantage. There are specific steps that can and
can no longer afford to say they want innovation without being willing to pay for it. Understandably, anything new or uncertain can be intimidating for businesses accustomed to relying on existing production technology to produce reliable profits. But design innovation cannot be achieved without a willingness to take on risk. The ability to create a substantial, brand-enhancing point of difference is only as good as a company’s commitment—in the form of development dollars—to do just that. About the Author: IoPP member Peter Clarke is CEO and founder of Product Ventures, Ltd., Fairfield, CT. He founded the firm in 1994 to create a consultancy that integrates research, design, and development for product and packaging innovation. For information about IoPP, visit www.iopp.or
