Innovation: getting to the heart of the consumer
For years FMCG companies, many of them household names, excelled at developing new products and services. Year on year, they produced a stream of high-quality goods that not only provided the consumer with convenience and reliability, but returned excellent profits. However, the situation today is quite different. These companies are finding it increasingly difficult not only to innovate, but to innovate profitably.
It has been argued that for companies to win and keep customers, marketers need to focus on being better than the competition at giving people what they want, rather than seeking a unique selling proposition (USP). While there may be some truth in this, a major issue that must be addressed by management is that, unlike a decade ago, today's consumers seemingly have very few unfulfilled needs. If they do, they are not making them transparent as might be expected using conventional market research methods. UK supermarket giant Tesco has managed to capture market share by being innovative and creating some USPs, but though successful it has been innovative only in a very small way and one that is neither unique nor sufficiently sustainable.