THEY say money is the mother’s milk of politics. In marketing, it is new products, meant to pique the interest of consumers and thereby stimulate demand at stores, restaurants and dealer showrooms.
In tough times, it would seem the flow of new products would be slowed by companies fearing that shoppers have too much on their minds to consider still another cereal, soap or soup.
But as the recession grinds on, Madison Avenue is serving up a steady stream of new packaged foods, cars, drugs (prescription and otherwise), menu items (for both sit-down and fast-food restaurants) and beverages ( alcoholic and otherwise).
One reason to stay the course on new products is that they can offer marketers new reasons to reach out to consumers when the impulse may be to pull back.
“There’s a saying: ‘When times are good, advertise. When times are tough, advertise more,’ ” said Dan Beem, president at Cold Stone Creamery in Scottsdale, Ariz., the ice-cream chain owned by the Kahala Corporation. “We want to stay with that philosophy.”
Cold Stone is bringing out, and promoting, new products like ice cream cupcakes, iced and blended coffee drinks, Jell-O Pudding Ice Cream and a line of cheesecakes.
The hope is that amid the changes consumers are making in buying habits, “they’re still looking for that 10-minute vacation at Cold Stone,” Mr. Beem said. “Our goal is to introduce some new products that will encourage them to go with the family to the parlor.” Another reason to keep filling the new-product pipeline is that successful newcomers can bring in much-needed revenue. According to the annual New Product Pacesetters report from Information Resources Inc., the top new food product of 2008, the G2 sports drink from PepsiCo, generated sales of $159.1 million, and the top new nonfood product last year, the Zyrtec allergy medication sold by a unit of Johnson & Johnson, took in $315.9 million.
There still is “opportunity in this kind of economic weather,” said Stefan Holwe, managing partner at Plantage, an agency in Berlin that is creating a worldwide campaign to introduce this month the 2010 Cabrio convertible for the Mini division of BMW.
“It’s a good time to do a campaign for Mini,” Mr. Holwe said, because of “the relevance of the brand in these really difficult times.” Mini sales in the United States, where some elements of the Plantage campaign will appear, rose 28 percent last year compared with 2007.
To hedge their bets on the multimillion-dollar costs of introductions, many marketers bring out new products under the banner of brands that consumers already know well, in what is known as line extensions.
Examples include the new Pantene Nature Fusion line of hair care products from Procter & Gamble, the new Glade Sense & Spray air freshener from S. C. Johnson & Son and new flavors of Honeycomb and Post Select cereals sold by a unit of Ralcorp Holdings.
Reckitt Benckiser named a new bleach-alternative stain remover Spray ’n Wash Bright & White although unlike Spray ’n Wash, which is sprayed on clothes before they are washed, the new product is added to the laundry along with detergent.
“The Spray ’n Wash name sounds weird for an in-wash product,” acknowledged Laurie Labesque, marketing director for fabric care at Reckitt Benckiser in Parsippany, N.J., but it made sense to “extend an existing brand name” that has been promoted to consumers for decades.
The new product did well in tests, Ms. Labesque said, because the idea that “it can extend the life of your clothes” resonated in this economy.
Similarly, when Häagen-Dazs considered introducing an ice cream composed of five natural ingredients, a decision was made to place it under the umbrella of the Häagen-Dazs brand of superpremium desserts and name it Häagen-Dazs Five.
“To tell you the truth, part of the reason we called it Five is that we have modest marketing dollars and wouldn’t have a lot of money to explain what it was,” said Ching-Yee Hu, brand manager for Häagen-Dazs at Dreyer’s Grand Ice Cream in Oakland, Calif., a division of Nestlé that sells the brand in the United States under license from the Häagen-Dazs owner, General Mills.
“We would’ve liked a name that was a little less literal,” she added, but on the other hand, it has the benefit of being short.
The campaign to introduce Häagen-Dazs Five includes house parties, supervised by a company called SheSpeaks, at which the hosts offer samples of the new ice cream to guests.
“This is a very good time for brands to get out there in new and different ways,” said Aliza Freud, chief executive at SheSpeaks in New York.
Because of the economy, “consumers are talking about reassessing their brand favorites,” she added, “not necessarily to trade down, but if they think they can get a better value at the same price.”
Members of SheSpeaks were recently polled on their attitudes about trying new products in light of the economic downturn, Ms. Freud said. Of the respondents, 44.4 percent said they were more likely to try them and 42.3 percent said they were equally likely.
Only 13.3 percent of the respondents said the economy made them less likely to try new products because “this is not a time to experiment.”