Round Table: New product development

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Related tags: Brand management, New product development

So what's the secret of a successful new brand launch? Drinks editor Adam Withrington asked a few industry experts for their thoughts.A criticism...

So what's the secret of a successful new brand launch? Drinks editor Adam Withrington asked a few industry experts for their thoughts.

A criticism levelled at the drinks industry in recent times has been the lack of innovation and new product development to interest consumers. The Publican's annual "Top of the Stocks" and "Desert Island Brands" surveys show the usual suspects coming out on top almost every year.

Brand owners complain of the difficulty of getting routes to market. Pub companies counter that many products are not worth the financial risk.

Specialist marketing company Box Marketing and The Publican organised a discussion between marketeers from all sides of the debate - the big regional brewer, the micro-brewer and the distributor, to discuss the issue and try to come up with some solutions.

How to make a success of a new drinks brand:

  • Encourage sampling campaigns

David Spencer:​ "Pubs need to communicate to consumers that the pub is the place you can do sampling and then brand owners will benefit as their products will start to gain a reputation. It is much easier for brand owners to be experimental in a pub - you could put a draught beer into five or 10 outlets, test dispense, pricing, whatever you want and do it discreetly. In the off-trade you have to commercialise the product straight away and get it on 200 to 300 shelves and try and get it to work. And if it doesn't work you can't tweak it. It's gone."

Target your new product at the right outlets in the right way

Geoff Bradman:​ "I adopt a 'horses for courses' approach. I go to a pub group and we will recommend certain drinks ranges for certain brand segments. Our brands don't have massive budgets so the route to the consumer is through good customer marketing and deliberate brand positioning (point-of-sale) or branded glassware (especially with cider) and that is encouraged by the licensees. The areas of the on-trade that are doing well with new brands are the ones that are prepared to innovate."

Dan Slark:​ "You have to ensure that the money spent on brands is spent in the most efficient way possible. Take it to outlets and test the point-of-sale; do a control test where you don't use any point-of-sale at all. The biggest challenge to brand managers is to really understand their target audience as opposed to making assumptions and going with that for a long period of time, wasting money. It's about being targeted and focused. You can't have an emotional attachment to a brand - you need to be very analytical about it."

Aim at quality of serve

Graham Abbott:​ Focusing on quality serve can deliver real value for money for the consumer. Look at what's been done with Magners by serving the drink with ice. Serving it correctly and at the right temperature has meant licensees can charge the consumer more for it and the consumer feels they're getting a good deal. So something that didn't cost that the licensee much to buy still makes them good value."

Target a quality outlet and sell at a premium

David Spencer:​ "You have to make the pub the place to be. I always pin up a notice in the staff room which says "I hate the sofa" so people always focus on the idea "my pub has got to be better than the attraction of staying in". If you get an environment like that then you will get pubs that look after products properly, providing the right sort of theatre, the right atmosphere. That is the environment you need to sell into, rather than one where the outlet is worrying about getting the cheapest possible product in, in order to maximise margins. It might maximise the percentage margin but you can't put that in the bank - you can only put cash in there."

Solve the route-to-market problem

Andrew Hepworth:​ "Our main barrier is getting through the distribution channel. So we will be looking for wholesalers that are interested in taking on something different without necessarily offering a huge pack of giveaways. We can give service and quality but what we don't have is a huge amount of marketing material to follow that through. But that isn't attractive to the wholesaler. They just want something easy to do with good margin."

David Spencer:​ "Surely the sort of scale you would like to achieve from your point of view is probably below the level at which you would start to need really aggressive marketing to take you onto the next level?"

Andrew Hepworth:​ "It depends which sector you are looking at. With ales, you could say there are so many brands that it's not too difficult to break into the market. But it is so competitive. In lager there are fewer brands but they are much bigger and more powerful. We find we can't represent ourselves fully enough because we are still a minor brand."

Geoff Bradman:​ "The model we are following with Aspall cider is very interesting. You have to "site" the brands in the right places with the right levels of support. From my perspective it's about ensuring the distribution gains are agreeable. It's of no use to anybody to develop a new brand or range, get it put on the bar or the spirits rail only for the next salesman to come in the door and get it taken down and replaced. Consumers get confused by that and it means a lot of time and money is wasted. The model we are following with Aspall, which is very focused, is paying huge dividends. The investment we are making in the outlet is being rewarded over a long period of time. It's not just a quick in and out."

The drinks editor says:

"How to get new products to market is the $64,000 question for brand owners. In a market dominated either by the tie or by hugely powerful drinks companies that conjure up cheap deals with the big pub companies it is hard for people trying to bring something fresh to the consumer.

And there are a lot out there. I lose count of the number of meetings I attend with an entrepreneur looking to launch a new product into the market. And eight times out of 10 I never hear from them again. The old maxim is "let the consumer decide". Well, in most cases they rarely get the chance!

So what can we take out of this discussion? The targeted marketing that Geoff Bradman talks about is important. You absolutely have to know that a new product you are introducing is a good fit for your bar or pub.

But the crucial point is made by David Spencer: that you as a retailer have to be able to persuade people out of their homes and into your pub. Make your pub a place where your customers will enjoy being offered new drink experiences.

Try and raise your sights and think how your customer thinks. What will they want to know about a new product? How it tastes? Offer your customers taste samples of new products, in the way the best supermarkets and convenience stores do with food. Its background or history? Use carefully targeted and relevant point-of-sale. In that kind of retail environment new products will thrive."

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