Improvements and modifications to successful products are safer than what is unproven
It is much less expensive to improve existing products than to develop new products from scratch.
BY WILLIAM SEIDEL
Evolutionary and revolutionary product development define how companies improve existing products, introduce new products and innovate.
Both approaches have their advantages and drawbacks.
Evolutionary products are meaningful improvements and modifications. The common types are adding new features, improving existing products. This creates a steady progression, allowing
adjustments to market demands, competition and technological advancements.
The purpose for evolving existing products is to reach new customers or increase benefits for existing customers. The primary benefits are low risk, a safer path for businesses with predictable
results. They fit existing product lines, established distribution channels and existing merchandising requirements.
This can mean speed to market, saving enormous time and money. Adding a Wi-Fi function to a phone is a new feature and an improvement.
Product line extensions are new product offerings that sustain the brand and business. They improve something that exists, making it better, more appealing and changing with the times. A line extension could be a different color, size or flavor.
An example is the evolution of Oreo cookies, with over 85 products that include Fudge Covered Oreo, Mint Oreos, Mini Oreos and even Watermelon Oreos.
It is low risk to build line extensions on an existing brand, because ready customers are willing to try a variation of a popular product. It is easier to keep the customers you have and expand the shelf presence with a name brand than it is to launch a new product with no customers.
It is also much less expensive to improve existing products than to develop new products from scratch. An improvement to an existing product can forecast potential earnings, while a new product has an unknown return.
For evolutionary products, this mitigates much of the financial risk and allows for better budget management.
Extensions and limits
Line extensions usually segment the market—and when done right can capture more customers and increase profits. When done wrong, this can cannibalize your best product.
The purpose of product line extensions is to extend profits, not products.
Most large companies are conservative and protect what they have, which often means nothing new. Nine of 10 corporate product introductions are line extensions.
The leading corporations do not need to take any risks. It is a more secure investment to launch evolutionary products.
But developing evolutionary products has limitations.
Minor improvements can lead to ignoring underlying issues and not seizing new opportunities. Overreliance on existing success may result in complacency, leaving companies vulnerable to disruptive competitors.
Kodak engineer Steve Sasson invented the digital camera in 1975. Kodak R&D acquired over 1,100 digital imaging and processing patents. However, management refused to introduce it because it would cannibalize its enormous photographic film and processing business.
Kodak owned the technology for the next generation of cameras but shelved it. The iPhone was introduced in 2007; Kodak filed for bankruptcy in 2012. Its digital imagery patents sold for $525 million in 2013.
Revolution: Excitement with risk
Revolutionary products affect existing industries, create new markets and disrupt the competition. They may replace all or part of an existing industry and make prior products obsolete. They can change the product category, the merchandising, and sometimes even the distribution system and manufacturing.
Digital downloadable music revolutionized the music industry, making CDs, record stores, and conventional music distribution obsolete.
One of the key advantages of revolutionary products is the potential for significant market impact. They can redefine and create new markets, expand revenue opportunities and be first to market, known as First-Mover Advantage. This allows companies to establish a strong position before competitors enter the space.
Revolutionary products come with inherent risks: the disadvantages of high startup and marketing costs, uncertainty surrounding new products, and a high risk of failure.
Resistance to change is very real. Revolutionary products change things, challenge existing norms and introduce new solutions.
The Segway was revolutionary and innovative, with brilliant engineering from an experienced inventor. It looked great with overinvestment but had massive underperformance.
It was a $5,000 solution looking for a problem to solve—but there was no demand, with no benefits and substantial price resistance. It was a fatal ending when sold to James Heselden, who died testing an experimental Segway.
Revolutionary does not mean profitable.
Wikipedia replaced all encyclopedias with a free, nonprofit, community-edited online encyclopedia with unlimited size, and instant updates at no cost. Encyclopedia Britannica was the market leader with sales of $650 million, 4,411 contributors and 2,000-plus salespeople—and was obsolete in a few years. Wikipedia now depends on donations to survive.
An evolutionary product can evolve into an industry revolution.
For decades, Procter & Gamble advertised Tide as “new and improved.” In 2010, P&G co-ventured with MonoSol, Inc., to develop a
water-soluble film. Tide Pods is a line of concentrated liquid detergent tablets with dissolving film chambers: the detergent released first, the stain fighter second, the fabric brightener third.
Tide Pods make laundry neat and easy. The time-released
dissolvable film turned many steps into one, solved consumer complaints and captured over 60 percent of the market. Tide Pods revolutionized the brand and made competitive laundry
products obsolete.
Many companies play it safe
Most inventors I meet believe revolutionary is a benefit. Surprise, surprise!
Companies claim they want innovation but usually turn it down. Why? Because it is unproven, the risks and costs are too high, and consumer acceptance is unknown. Instead, they internally develop evolutionary improvements to existing brands.
Companies need to adapt to survive. Their decision depends on financial position, company objectives, market position and many more factors.
For the inventor, the fastest path to market and to revenue is a license agreement for a protected improvement to an existing product.
Licensing an evolutionary product will often meet with quick acceptance because a low-cost, easy-to-implement improvement will have great interest.