Heineken’s Charzat on how innovation can damage your brand

heineken-2-700x516While companies are struggling with a need to accelerate innovation, this may not always take off the way it is intended.

“Innovation can damage your brand,” Cyril Charzat, senior director, Heineken APAC, warned.

Speaking at this year’s Brand Innovation Summit by HP, Charzat discussed the challenges of innovation and shared the company’s three tips for successful innovation.

Challenges of innovation

“Innovation distracts the organisation from business delivery,” Charzat said. He explained that the complexities that accompany the process of executing an innovative idea can complicate the general business goal due to additional tasks such as managing the supply chain and putting project teams in place that are needed for innovation.

Since companies need to invest in research and development (R&D) and marketing when launching an innovative idea, the costs of such projects should always be considered. According to Charzat, “Innovation is expensive in time and budget, and brands need to take note of that.”

“In terms of complexity, innovation can damage your brand,” Charzat said. Before innovating, a brand must be sure that that its next move contributes to something positive for its brand.

“The innovation must communicate something positive that contributes to the equity of your brand,” Charzat advised.

For instance, he cited a few examples like snacks brand FritoLay introducing “healthy snacks” and toothpaste brand Colgate selling entrees as some instances where brands got “hurt by wrong innovation.”

“The core equity of your brand is going to be impacted by the messages you’re giving to the consumers,”Charzat said, adding that, “there are brands that are suffering from an association with its past innovation that failed and brought a bad image to a company or a brand.”

He added, “And because consumers are aware of this past failure, it will impact your brand equity. This past hinges on your brand equity and the fact that it didn’t deliver on its goals can impact the brand in the long run.” The complexity of innovation can impact the core equity of a brand if the message confuses the consumers.

Yet, brands are still eager to innovate despite these risks. “Even the most traditional brands like champagne brand Dom Perignon collaborated with industrial designer Marc Newson to launch its product wrapped in Newson’s designs,” Charzat said, acknowledging the success of such an innovation that led to increased sales and brand awareness.

Hence, according to Charzat, the key question should be how to innovate the right way.

Three basic rules for successful innovation

  1. Always check that the brand is healthy.

“You don’t innovate to fix a problem, if you have a problem , you fix the problem differently before you embark on a plan to innovate,”Charzat said.

Innovating to fix a present problem is much like “hiding the dust under the carpet” since it seduces only loyal customers while making the problem merely dormant: “In the end, the problem still remains.” To verify the health of a brand, a company must ensure that it is doing well in its market.

  1. Be single-minded about the objective

A brand must be clear about its business objectives in order to support innovation sustainably. “Brands need to have a plan to invest sustainably –  they must believe in the innovation and won’t pull the plug on idea,” Charzat said. There needs to be a proper assessment of the business opportunity and what innovation can bring to the business.

  1. Business vs consumers

“Fast moving company look at high repurchase rate to verify a sustainable business case, “ Charzat explained.  In judging an innovation before launch, a brand must ensure three key stages from a consumer’s perspective regarding its product, namely,  a) I understand it b) I would certainly buy it c)  I love it.

Charzat advised that innovation must create some appeal for consumers while simultaneously building brand equity.

Source: www.marketing-interactive.com/