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A recent Advertising Age article caught my eye and I think it’s important. The gist: key consumer packaged goods manufacturers are promising to roll out innovative new products in 2010 after a major slow-down in 2009 due to the rocky economy.

The article: “Package-Good Players Plan New-Product Surge for 2010” states that some of the largest global consumer product companies “have said or signaled that they expect to step up new-product activity, and by extension, marketing support in 2010.” [Ad Age subscribers can access the article here. Non-subscribers can access it through BX Business Week here.]

These players include Procter & Gamble, Reckitt-Benckiser, Kimberly-Clark Corporation, Energizer Holdings and Unilever. Many retailers report they’re not seeing many new product launches yet. In fact, just the opposite, as manufacturers trim their product lines of under-performing items.

With sales flat to down in many categories, CPG companies have been reluctant to go to market with many new products of late. If anything, they’ve taken a defensive posture analyzing and lowering pricing where practicable. As a result, private label brand managers made inroads with new offerings, expanding SKUs and sales of their store brands.

National brands are beginning to respond. According to Nielsen Bases, “a dominant player in concept testing” for the consumer products industry, companies are beginning to spend market research dollars again in their new product pipelines. But, as we know, new product launches take time. Some industry analysts don’t see significant new products coming to market until late 2010. But others think manufacturers held promising new products back in 2009 due to the dismal consumer climate and are poised to position them in the marketplace.

Regardless, major CPG players have lost sales and market share to private labels so they’re likely to go on offense in 2010 to make gains and take back some of those losses. Of course for that to happen, new product launches will have to offer a bigger “wow” factor than recent introductions. That means branded products will have to offer true innovations to excite and entice consumers. Think about it: which new products can you recall being excited about lately?

Most telling at the end of the article: “But while 2010 may be a bigger year for innovation, it will probably be a lot bigger in developing markets than the U.S.” One senior package-goods executive said, ‘Focus will be skewed towards developing markets, as this is where he main battles will be and it is actually easier to innovate, as a lot can be leveraged from what has been done elsewhere.’”

What does that say about developed markets?

No matter what: buckle up, consumers and marketers. It’s going to be a bumpy ride in 2010.

Questions:



  • Do you think CPG companies are right to launch innovative new products in spite of the slow economy? Or should they do it because of the economy?


  • Can you think of any strong CPG product launches over the past year?


  • If you’ve switched from some of your favorite brands to private label to save money recently, would you consider going back if innovative new products were launched?


  • Do you think major brands can still grow in most consumer product categories, even in mature markets like the U.S.? Or do you think CPG companies should put most of their focus in developing markets?


I’d love to hear from you.

Continue reading "Big CPG Players: Going On Offense In 2010?" ... Read the full article

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ABOUT THE AUTHOR

Ted Mininni is president of Design Force, Inc. (www.designforceinc.com), a leading brand-design consultancy to consumer product companies (phone: 856-810-2277). Ted is also a regular contributor to the MarketingProfs blog, the Daily Fix.