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Oreos, Apple and Core Knowledge (Craig Douglass On Consumers)

3 min read

Basic. Essential. Enduring. That’s what a core is. In business, we often hear the term “core competency.” In this layman’s terms it could be expressed in the simple phrase “Stick with what you know.”

The whole idea of developing, defining and promoting a brand, or branded identity, is based on presenting to your target audience exactly what or who you are and what your particular consumer can expect from your product (or service). Focus group research supports this notion. Consumers want to be able to make choices based on what they know, what they are sure of. Likewise, consumers expect you, your company and your product to have clear self-knowledge. No ambiguity. What you see is what you get.

Well, that’s pretty simple, isn’t it? Perhaps even boring. However, sticking with what you know doesn’t mean a brand can’t innovate. It can. And it must, to continue making the consumer experience entertaining and fulfilling, reinforcing loyalty and attracting new customers. Another term: “core innovation.” Core innovation is making incremental changes to existing product categories that increase value and attract new consumers.

One example recently cited is variations on one of the world’s favorite cookies, Oreos. Oreos now come in a thin version of the iconic product. Same cookie, slimmer model. Some marketers would call this a line extension.

Continuing with this example, Mondelez International, the new name of the Kraft food brand (founded in 1923), continues to innovate at its core by recognizing new uses and packaging for existing products. For instance, recently the snack-food giant created a dedicated website that allows consumers to order Oreos with individualized package designs targeted for personal or corporate gift giving. Same cookie, different packaging. The same would be true for the 100-calorie package of Oreos. (I like Oreos.)

Core innovation is the most prevalent type of incremental change a brand can undergo to extend its reach. Other types of innovation are called adjacent innovation and transformational innovation. All three make up what market research types call the 70-20-10 rule of innovation.

As historically is the case, 70 percent of innovation occurs at the core or foundation of the brand, based on existing products. Adjacent innovation involving leveraging the brand in a new market, thus taking advantage of the brand name and the quality and value associated with it, makes up 20 percent of innovation (think Tide Cleaners, new to the Little Rock market). Breakthrough innovation, or transformational in-novation, accounts for 10 percent of innovation. Disruptive brands can transform the marketplace and create products, effectively inaugurating a new category or introducing a thing that hasn’t existed before. The Apple iPad is an example of transformational innovation. But it is, at its core, an Apple (pun stumbled upon).

Marketers need to be careful, of course. Brands can overreach and confuse the consumer, thus diluting the overall brand. Just because technology, for instance, can create new products and product applications, that doesn’t mean they will be successful. Somewhat like a feature without a benefit, or a solution in search of a problem.

We are reminded of the outright success story of Miller Brewing Co.’s creation in 1973 of the category of light beer. Although the ability to create a beer with fewer carbohydrates had existed for years, and Miller had tried it before, Miller adopted a strategy of adjacent innovation — it was beer and it was Miller — with a hint of transformation: Miller Lite. But when Anheuser-Busch introduced its light-beer product in 1977, it branded the product Natural Light. It bombed. What did they forget? They forgot the brand: Budweiser. When Bud Light replaced Natural Light (although that brand still exists as a popularly priced light beer), sales took off. That was 1982, the year Budweiser remembered its core and its brand name.

So to make sure one doesn’t over-innovate, be sure to stay in touch with the target audience, its wants and desires; maintain quality and value in all aspects of product execution; leverage the brand name; and, above all, stay in your lane to avoid crashes.


Craig Douglass is an advertising agency owner and marketing and research consultant. He is president of Craig Douglass Communications Inc. of Little Rock. Email him at Craig@CraigDouglass.com.
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