Zombie and cannibal products killing consumer brands - study by TNS

21 November, 2013


TNS

Billions in lost profitability for UK companies 

60% of new launches are failing to provide growth or eating into companies’ profits from existing products

Companies have been damaging their business by launching ‘zombie’ and ‘cannibal’ products that eat into their profits, according to a landmark UK study by global research consultancy TNS¹.

‘Zombie’ products fail to provide long-term growth, acting as a ‘dead weight’ on the company, while ‘cannibal’ products simply transfer customers from other products in the portfolio, not only failing to provide top-line growth, but often leading to brand decline.

The UK study of almost 3,500 consumer goods launches² including savoury snacks, laundry, soft drinks and skin care showed that 60% of new product launches were either zombie or cannibal products3.

Both of these product types, which are typically not detected until too late in the launch process, substantially increase the risk of a company wasting precious resources on non-productive ideas. The food and drinks industry in the UK alone is wasting an estimated £600m per year on R&D, in addition to the billions in pounds of costs in launching over 3,600 zombie and cannibal products4.

TNS advises clients on specific growth strategies for their business. When working on innovation programmes, it found that companies launching new products often rely on volume alone to determine the worth of an idea, without determining the positive or negative impact the launch will have across their portfolio. For example, Pringles Xtreme – a new product which generated significant sales, heavily cannibalised the existing range, resulting in minimal franchise growth. Too often, these ‘cannibal’ launches fragment the resources and often lead to shrinkage of the total franchise.

TNS identified that only 15% of products launched are what TNS terms ’expansion innovations’: new products that attract sales which add to a company’s existing revenues. TNS believes the goal of all product innovation should be to generate profit through attracting new customers or increasing the share of wallet among current users, as opposed to eating into revenue from existing products. TNS calls this ‘true growth’.

Steve Landis, Global Head of Innovation and Product Development at TNS, said: “Too many businesses are spending huge amounts of money on quasi innovation that only convinces existing customers to swap within their range. The key to unlocking true growth is to focus on genuine innovations that will draw in brand new customers or lead to greater frequency of use by existing customers.

“The rewards for those that get it right are phenomenal. Launching a successful ‘expansion’ product, founded in genuine innovation, can rejuvenate a company’s fortunes and put it into a league of its own.”

A recent example of an expansion innovation is McCain’s Jackets – one of the most successful launches of 2012 - which delivered significant sales that were highly incremental to the existing brand franchise.

About TNS
TNS advises clients on specific growth strategies around new market entry, innovation, brand switching and stakeholder management, based on long-established expertise and market-leading solutions. With a presence in over 80 countries, TNS has more conversations with the world’s consumers than anyone else and understands individual human behaviours and attitudes across every cultural, economic and political region of the world. TNS is part of Kantar, one of the world's largest insight, information and consultancy groups.

Please visit www.tnsglobal.com for more information.





Acrobat Document tns_pressrelease_true_growth_nov13.pdf


Tools Print page E-mail page Press Releases Reading Room Get Acrobat Reader

WPP At a glance 2013

WPP At a glance 2013
WPP Sustainability Report 2012/2013

WPP Sustainability  Report 2012/2013
WPP Interim Report 2011

WPP Interim Report 2011