When Product Innovation Becomes Top-of-Mind

North America's soft drink industry has experienced a bit of a slowdown in the last decade or so. With increases in health concerns, it is no longer well seen to enjoy a refreshing cola with your every meal. In this environment, two cola giants have looked to different creative avenues for developing their brand and finding a unique product position. With the constant need for new material in the marketplace, the producers at Coca-Cola and PepsiCo. cannot rely on new recipes alone to impress their customers.

We have recently seen an attempt from both organizations to bring in novelty flavors but consumers have not reacted well to changes in their recipes. This resulted in the development of innovative strategies that are simple, and highly interesting from a brand management perspective.

First to appear, MountainDew (PepsiCo.), introduced its built-in bottle cap tool for skateboarders; with a hex-nut wrench made as part of the lid. MountainDew provides clear targeting through this move, essentially saying: we want young, adventurous people, who won’t settle for typical.

Even though its target market is pretty narrow, it has the advantage of focus. From a skateboarder’s point of view, this cap was made specifically for their social group, therefore the product should satisfy their needs. Unfortunately, it is likely that from a consumer behavior standpoint, a cap, no matter how cool, is not the first thing a customer is looking for when buying a soda, and the innovation will thus need extra communications efforts and promotional displays to get the point across.

On the other hand, Coca-Cola has played a different card. Instead of targeting a specific customer segment, they worked to become more “environmentally-friendly”, by proposing different caps to turn empty Coca-Cola bottles into useful everyday objects. Even though the real impact is likely to be minimal (we do not expect millions and millions of people to now buy Coca-Cola based on basic everyday needs), it was certainly well received as a clever idea.

Overall, we think these two ideas were original enough to create excitement on the web; however, we doubt it will really impact each company’s bottom line in the near future. Brands are not built overnight, but these cutting-edge "outside of the box" efforts are a great step towards developing positive brand images.