You start focusing on improving existing brands.
One fact that really surprised me was that Reckitt Benckiser (CPG manufacturer with a market value of £21billion) only launched one new brand in the last ten years.
So instead of looking for new brands. They focus on two things:
- Existing brands (in 2000, their top 17 brands were responsible for 40% of the revenues. Today they account for 71%)
- Markets were they can have the top position or where there is a lot of growth potential
On the other hand, this strategy might have cost them another successful product. That, if they had launched it as a separate brand, might have been a hit!
Rolling out new brands globally is a very expensive exercise. It’s much more likely that you will see the bulk of new innovations in our existing brands.
CEO Bart BrechtHowever it is more a safe strategy trusting the reputation you have build up on certain brands.
This focus on existing brands is remarkable in the CPG industry. And it has paid off. Their stock grew an impressive 400%, well above sector average.
Let's hope this brand focus inspires some other companies.