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As good as new
The global economic crisis has shifted marketers' focus from creating new products, to renovating the old, according to GMR magazine.
July 29, 2009 1:14 by Precious de Leon
Confused by reports on the state of the economy – from the overtly depressing to the cautiously optimistic – it’s no surprise that attendees of the latest Nielsen client conference were guarded. So what drew this wary group of marketing executives to the event?
The same two words that attracted us: “innovation” and “renovation” – much more so the latter.
Innovation is a buzzword everyone wants to be associated with but, whether in NPD, services or delivery, it can be a costly affair. Statistics from Ernst & Young and Nielsen show a 90 percent failure rate among new launches, while another study* estimates that 65 percent of marketing funds are spent on launches that fail. These sobering facts, along with the cost of research and other time and effort put into innovation, suggests investment in innovation during an economic downturn is a bad idea.
Or is it? Not quite, according to stats The Nielsen Company distributed.
Abandoning innovation may be a worse idea. At the same time, the trend for companies to opt instead for renovation in times of recession should be encouraged.
The two-part half-day “Winning with Innovation & Renovation” conference, its organisers say, was meant to encourage clients to invest in innovation, while remaining realistic about the costs and risks involved. The second part covered renovation and the possibilities for keeping existing brands at top-of-mind through revamps.
Nielsen put the economic downturn into perspective with stats gathered by the company’s sales forecasting and optimising tool, Bases. One interesting figure looked at the last downturn. It showed a 256 percent difference in growth rates in the first five years after the recession between companies that “cut sales and marketing efforts during recession” and those that maintained theirs.