What Are New Product For?

Is it a company's obligation to grow the entire category with new products, or just their business?

In a recent article in the Wall Street Journal, James Craigie, described by the paper as “the outspoken chief executive of Church & Dwight Co.” declared that innovation in the detergent business had gone too far because Procter & Gamble’s new Tide Pods product had led to declines in detergent consumption.

"Pod is killing the laundry detergent category," Mr. Craigie said at an industry conference in February.

New products ought to expand the revenue pie for manufacturers and retailers, not shrink it, he said. That is what innovation always did in the past, he said.

While I understand that companies are in business to make money, I don’t believe that they are necessarily in business to expand the category for other companies. 

Procter’s Tide business is growing with Pods as are their profits. The fact that they have delivered a real value for consumers and that this growth has come at the expense of competitors strikes me as the way the business ought to work.

Innovations should bring added value to consumers and drive business to your brand. In some cases the category grows.  In others it may not.

Detergents in the past depended on consumers over-dosing in their washloads.  Using more product than they needed. Now that Tide Pods prevent that, some competitors can’t keep growing their business by fooling people.