Nielsen Research just published a study on the effectiveness of different campaign launches. They cite the average cost of a product launch at a whopping $15 million as justification for digging in deeper into which launch strategies work best. Nielsen analyzed more than 11,000 new consumer product launches in the U.S. between 2008 and 2010. They wanted to try to discover which products realized truly breakthrough results in their categories.
The research gets us thinking about what role different tactics might play in a truly high-performing launch. Although the report downplays blitz type product launches, we’re left wondering about some of the most successful consumer product companies that use blitzes to sell and make the brand memorable — notably Apple and Coca Cola for instance. Although the research from the big data mining companies is welcome, we need to read between the lines.
The Nielsen research report suggests that innovation is a key determinant of product launch success. They sought to find those product launches that had legs and what marketing characteristics created the best longer term outcomes. They segmented the innovation success leadership by measuring:
- Category Impact
Out of the 11,000 product launches, Nielsen found only 34 products fulfilled all four evaluation criteria and earned a distinction as a Breakthrough Innovation Leader. These products survived through the recession. You’ll have to download the full report from Nielsen, but they did leak out a few details. They found that those products priced at a 35% premium outperformed others using a 90% price premium. Their insight: a high priced marketing blitz is less effective in the longer term than a continuous smaller budget marketing effort applied consistently over time.
The report didn’t specify why big budget blitzes fizz out or to what degree they fizz out. Nor do they mention what it is that is innovative about their campaigns or the measure of success. The study measures success in the 2nd year of sales. And what effect does the initial campaign blitz have on long term performance? Some products fail because of changes in quality and distribution as well, which are apparently not part of the criteria Nielsen studied.
Doesn’t the biggest wave have the highest chance of reaching shore thousands of miles away?
Product Launch Strategy
Is it confidence about a product that determines whether a company will use a short term big blitz or sustained longer term strategy? Is it competitiveness on the shelves or in what powerful retailers/distributors demand from manufacturers/brands? If you lack confidence in your product amidst the competition, perhaps a big budget blitz with premium pricing is the only way to go.
How can manufacturers innovate consistently without higher production and marketing costs? Doesn’t innovative/disruptive launches necessitate a bigger launch budget? The report may actually be measuring a set of product launches in peculiar circumstances, since these big players do big blitz launches. The iphone launches are huge blitzes and they are very successful, particularly in an era of internet viral messaging. Make big waves and big noise and you get seen.
Despite what the Nielsen Research suggests, do failed blitz-type launches fail because marketers didn’t choose their promotional avenues and media wisely? Is it simply a case of poor channel selection or execution? Can blitzes be targeted and timed well enough to generate a lasting effect? The Apple iPhone and iPad launches seem to work well. And I’ll ask you this: “Can you promote the SuperBowl game consistently throughout the year as effectively as a blitz in January?”
Another Argument for Well Timed Blitz Campaigns
Events force timed, blitz campaigns as demonstrated in this 2012 Japanese Olympic blitz event. Blitz events do more for marketing success rates and the economy than sustained marketing programs. They grab consumer attention and generate emotion — a key objective of any campaign. It’s the emotion generated that builds interest and sales. My contention is that blitz marketing is getting a bad rap. The secret to performance is in how well-planned and targeted the campaign is. Executed intelligently, a blitz should work well. In multichannel marketing, such coordination and pinpoint targeting is taken for granted.
After your blitz campaign is finished, you can use a maintenance promotion, but I wouldn’t suggest on an even keel. Companies must be inconsistent to catch shopper’s attention. It’ only the differences or changes that consumers will see. Everything else gets ignored.
Even keel marketing on the other hand is likely to be ignored, therefore, it might be more appropriate for certain types of products — commodities which consumers buy on a regular basis. Major consumer brands such as Proctor & Gamble’s might be suited to consistent, quiet campaigns. Would that work for an unknown brand without guaranteed shelf placement?
Coca Cola – Perrenial, Sustained and Innovative Leadership
Who typically lasts in brand battles? Are survivors really determined by the mistakes of competitors? Would Apple and Coke succeed at one tenth of their current marketing budget and without product launch blitzes?
One perennial market leader who has been disruptive and innovative over the long term and is no stranger to blitz marketing is Coca Cola. Coca Cola’s presence on televised NFL superbowl games and the Olympics is easily recalled by anyone. They advertise widely on billboards and make their delivery trucks a moving billboard. They’ve changed their product formulation many times yet still reign as the soft drink champion. What do you think has made Coca Cola a long term survivor and champion? Is it just their product formulation or has blitz marketing done the job? Is Coke well displayed in retail stores?
Is initial big success a pre-requisite for long term sustainable growth? Coke has failed many times, yet had the strength to overcome. If a smaller brand doesn’t come in with a bang, what are the chances it will survive at all?
So, while the ideal is sustained performance (backed by Nielsens’s suggestion), the path to getting there is up for discussion. How have your product launches panned out over the years? Do you believe in sustained, low key marketing for success in your product categories?
If you do believe in low key launches and marketing, does POP display make sense as the best way to do it?