P&G praises benefits of open innovation

02 July 2010

LONDON: Brand owners must foster a culture of "open innovation" to get the best results from the new product development process, according to Mike Addison, an innovation director at Procter & Gamble.

Speaking at the Marketing Week Live! Conference, Addison argued there is an "enormous opportunity to take innovation onto the mass-market."

“FMCG companies are looking to drive there whole brand presence and innovation is key to this. The more relevant the idea, the more value that comes out of it," he said.

In just one example of this trend, P&G has rolled out a variety of bottled sauces to accompany its Iams pet food, in an effort to “enhance” the brand and add value.

However, achieving this goal requires a willingness to listen to proposals from a range of sources, alongside conducting targeted and in-depth research to assess the viability of specific projects.

"Anyone who thinks they can create a winning proposition should come forward, but it's important that you invest in insight and evidence to prove its strategic worth to a large company," said Addison.

More broadly, generating the maximum benefits from the innovation cycle can involve licensing ground-breaking technology to competitors, or entering into revenue-sharing agreements through a similar model.

"Companies like P&G and some of our rivals thrive on 'Brand Centric Open Innovation' and have solid commitments to innovation frameworks to apply to any brand - be that our own or a rival's," said Addison.

"Being open like this means we have the best brands on the markets and know we are giving consumers what they want."

P&G has recently unveiled a range of extensions to its Febreeze homecare line, as well as offering other organisations the chance to utilise its intellectual property for a fee.

Elsewhere, the world's biggest advertiser partnered with Dunkin' Donuts in the grocery sector to manufacture a number of flavoured coffees.

Addison also suggested that Crest's introduction of White Strips, a chewing gum that improves the appearance of teeth, represented an instance of disruptive innovation which gave birth to a new category.

Elsewhere, Pampers' tie-up with Unicef to provide vaccinations to children in emerging countries took the form of commercial innovation, as it helped build equity with shoppers.

The redesign of Ariel's packaging, to include new Actilift technology, was said to demonstrate sustaining innovation, which refreshes a brand without the need for wholesale change.

Data sourced from Mad.co.uk; additional material by Warc staff