Here’s how leading brands approach brand innovation, according to Janine Klimko

Brand innovation is a strategic way to keep the sizzle. Brands that don’t adapt to new customer preferences risk becoming “last year’s news.” Innovation helps brands stay abreast of market trends, find new audiences through brand extensions, and tap into short-term growth opportunities through seasonal or limited editions. 

Hello pumpkin spice! Innovative brands adapt to new trends so their customers stay excited to buy their products. It’s an ongoing process of listening to customers, asking for feedback, and developing new flavors or features that customers help create.  

Brands that adapt to new consumer tastes with ongoing communication have a competitive advantage.

But how do you keep your customers excited about your offers? What motivates your customers to stay connected with your brand? After a decade in branding and marketing, I’m convinced the answer is customer communication. Discover what your customers want and deliver it.

Brands like McDonald's, Pepsico, Taco Bell and others use consumer data to collaborate with customers to develop breakthrough new flavors and snack ideas. They use an iterative process to find surefire wins their customers' love, and you can follow their lead. Read on to learn more and get Janine Klimko’s, our Head of Innovation - Portfolio Product Strategy, point of view along the way. 

First, dig into what you already know. 

Matt Cahill, Senior Director, Consumer Insights Activation at McDonald’s, advocates starting with what you know. He says to look at your past data and pay attention to the successes and failures. He calls using past data from your consumers “getting a head start.” And why wouldn’t you want that?

"I think in our innovation system, the first thing we realized was, because we're in a lot of the same places, the easiest way for us to get better is to learn from what we've done historically... learn from where you've been and force that step. If you don't force that step, it won't get done. It's easy to skip because everybody wants to have the new greatest idea ever and you don't want to acknowledge that someone has probably had a similar idea before."

- Matt Cahill, Sr. Director, Consumer Insights Activation, McDonald's

Now let’s get into the step-by-step process.

Step 1: Define your goals and criteria for success 

What are your primary business goals with your brand innovation strategy? 

• Growing market share 

• Making more sales from existing customers 

• Developing strategic partnerships 

• Building brand credibility 

Your answer might be “Yes” to all of the above, but choosing one area to focus on is easier. For example, McDonald’s sets specific goals for each brand innovation, such as increasing the number of transactions or changing customer perception. 

The initial launch might include a limited-time offer to drive enthusiasm. You see this every year during “pumpkin spice season,” better known as Fall. Starbucks recently did this by putting two of its new energy drinks on the menu. The third flavor, Frozen Tropical Citrus Iced Energy with Strawberry Puree, is available exclusively in the app and for a limited time. There’s always the possibility they’ll add it to the regular menu if it proves popular enough.

But it’s important to keep in mind that even great ideas can fail on poor execution. The key things to pay attention to here are:

• Product demand - based on your prototype testing you'll know you have a great product, but you need to make sure you can scale it to the demand.

• Support and distribution - Your execution should correspond to the potential of your idea and to your strategy. We can even link this to our methodology - if you know your concept has potential to be scaled and deliver long term value, make sure you maximize the launch support and distribution, and continue to support the product overtime.

• Level of distinctiveness - If you have a product that's highly distinctive and perceived as better than other alternatives in the market, but there is not much consumer interest yet, you want to tease it out with more narrow support in selected channels. If you have a product that consumers are highly likely to buy but it's not very distinctive, plan a short term marketing push to harness its potential to drive short term sales. 

• Consistency across all touch points - Make sure your marketing assets are consistent with your concept and your brand.

💭 Janine’s POV: If done successfully, innovation is a powerful tool to drive incremental penetration for your brand. Brands should balance innovating close enough to their portfolio to credibly leverage their expertise but far enough to attract new audiences.

Step 2: Dig into your market

Surveys, interviews and up-to-date analytics tools can help you keep current with your customer preferences. 

It’s important to keep an eye on market trends and emerging opportunities, too. For example, when Starbucks recognized Gen Z’s propensity for cold energy drinks, they created three enticing flavors of iced beverages available for a limited time to drive consumption. 

💭 Janine’s POV: You can never know too much about your customers. Talk to them regularly to understand their preferences. To innovate well, you need to understand the “whys” behind consumer motivations.

Step 3: Create iterative processes 

Creating winning innovations requires ideas—lots of them. But you can’t chase every idea. It can be helpful to use innovative tools that allow you to screen and prioritize your most promising ideas with your customers' input along the way. 

💭 Janine’s POV: Iterative research helps you build and refine concepts into a winning product and allows you to learn from your ideas over time. Plus, iterative, agile innovation development results in a 4 to 6 times higher success rate compared to conventional methods.

Step 4: Develop prototypes and test

Once you’ve narrowed down your idea(s), if applicable, create prototypes and pilot programs to validate your ideas. If you’ve collaborated with your customers along the way, you’re well on your way to a winning innovation if you already have a great product. 

You can uncover great concepts with tools like Zappi’s concept testing solutions to guide exciting new product developments. You can also use AI-powered optimization to test and optimize different elements of your concepts, such as packaging, pricing, claims, and more. 

For example, with this solution, McDonald’s tested McFlurry flavors to discover which had the most potential and which customer segments they were most likely to appeal to. They even tested the time of day when the target customer segment would best receive the new item.

Step 5: Implementation 

New product launches require adequate resources and a strong go-to-market strategy. If you’ve built iterative testing into your ideation and product innovation approach, you’ve tested your ideas at every stage. Now comes the execution step. Even great ideas can fail if not well-executed. Here are three things to consider. 

• Product - You know it’s great, but can you scale it quickly? 

• Support - Plan the execution of the idea. If your idea meets the high trial and breakthrough matrix, then you want to maximize the launch support and distribution. If your product is distinctive and has a higher perception than alternatives, then it makes sense to plan a short-term marketing push to gauge the potential of driving short-term sales. 

• Consistency - Are your marketing assets consistent with the concept and overall brand? 

Step 6: Measure performance 

Cue the trumpets! Once you’ve launched your new product, you want to know how it’s received and how to improve it. After all, you have KPIs to measure. As the early reports trickle in, you’ll look at the sales numbers and want to hear what the customers think. 

💭 Janine’s POV: You get better insights when you connect different data sources, such as your sales and market data, your brand and media data, and consumer feedback. Use tools that give you additional context and even better insights when you connect your learnings over time.

Now that you have a step-by-step guide to brand innovation, you might wonder how rebranding fits in. 

Brand innovation vs. rebranding

Many confuse the two, but brand innovation is different from rebranding.

McKinsey says, “Innovation is the systematic practice of developing and marketing breakthrough products and services for adoption by customers.”

For example, Fanta’s new limited edition flavor, Haunted Apple drinks are an innovation. They expands on Fanta’s traditional fruity soda portfolio to attract a new audience or additional purchases from existing customers. 

Rebranding focuses more on market positioning and customer perception due to shifting markets. Maybe the numbers show the brand has lost market share. To recapture customers, leadership might consider a rebrand to feel fresh. Rebranding usually includes a new visual identity, a fresh logo and maybe a new tagline to rejuvenate the brand and recapture consumer attention. 

However, both brand innovation and rebranding require thinking about the “reasons why” the company exists and why customers buy. Brand innovation speaks to the customer’s craving for “new,” such as a new chip or drink flavor.

Of course, companies and consumers are always evolving, and brand innovation and rebranding can influence one another. Both look to learn from their customers. 

💭 Janine’s POV: The brand that tests and gets customer feedback often positions itself to create winning products and ensure its brand identity stays fresh yet consistent. 

Smart innovation is key to business success in today’s world, and it’s only become more competitive in the past decade. Top companies constantly trial new ideas to see which ones land with their customers, and they use online tools throughout the process to guide product development. In our monthly newsletter, we pick the most interesting innovations and share key learnings based on consumer feedback. Here are the top picks from recent months. 

1. Taco-Bell collaboration with Cheez-It

Cheez-It and Taco Bell teamed up to create a tasty brand collaboration with the Cheez-It Crunchwrap and Tostada. With a Cheez-It 16x larger than usual and mounded with ground beef, sour cream, lettuce, tomato, and onion, it’s a fresh take on a taco salad. While brand collaborations aren't new, that doesn’t make them any less talk-worthy! They’ve been used to excite consumers and drive engagement beyond the core for decades, and this collab in particular is an innovative collaboration because it pairs two favorite brands and tastes to create an entirely new product. 

💭 Janine’s POV: Brand partnerships can drive great additional engagement for your brand; however, it is essential to pick your partner wisely. When choosing a brand to team up with, aligned values and complementing features should be prioritized over shock value and virality.

2. Molson Coors’ Spiked Refreshers 

Molson Coors’ Happy Thursday Spiked Refreshers is a non-carbonated seltzer developed to meet Gen Z's demand for non-carbonated beverages. Carbonation can lead to painful bloating. 

Molson Coors recognized the demand for hard seltzers and no carbonation, so they combined the two into a new brand with multiple flavors.

💭 Janine’s POV: It’s important to understand market trends, consumer challenges, and gaps in the market; but most importantly, whether you can address those credibly with your existing portfolio. Molson Coors was smart to create a new brand here rather than launching a subrange of an existing brand.

3. Reese’s medals 

Reese’s is long known as the creator of the popular peanut butter cup. But they’re also known for consistently creating seasonal shapes at Halloween, Christmas and Easter. These are always a hit with consumers, because it takes what people love about Reese’s Cups and makes it appropriate for the season.

Another great example of this is their recent “Reese’s Medals” created to celebrate the Summer 2024 Olympics and Paralympics. Recognizing a long partnership between The Hershey Company and Team USA, the chocolate, peanut butter-filled “medals” were made available across the country during Olympic games.

Besides the fun shape, the medals launch accompanied a broader campaign, “Legend vs. Newcomer,” to introduce Reese’s audience to new and returning Team USA athletes. 

💭 Janine’s POV: Innovation does not need to have longevity to be successful. Seasonal or limited edition launches can be a great addition to your range to boost incremental sales over a set period and drive further engagement for your brand and category during a relevant time. 

Brand innovation increases sales and competitive advantage if you do it right. You can take a page from successful brands like Starbucks, McDonald’s, Taco-Bell and others on smart ways to innovate.

These brands test their ideas with consumers throughout their ideating and product development process so they get faster feedback and understand what resonates with the audience. And today’s brand innovation tools make it possible to learn faster. 

To learn more about how leading brands like McDonald’s unlock winning innovation, check out our webinar below.