Innovations prove profitable

By Dan Sewell The Associated Press

CINCINNATI -The venerable Mr. Clean beefed up, adding new tools, and even ventures outside to wash cars. Olay, the decades-old face cream, dropped the “Oil of” from its brand name and now has products for the entire body. Febreze, born as a fabric odor remover, has broadened into an air freshener for use throughout the home, car and even combined with other products.

Procter ‘ Gamble Co. has long been a leader in devising new consumer products andnew looks or new uses for its popular brands.

The company has a fresh barrage hitting shelves now, including the Fusion five-blade shaver line from its newly acquired Gillette operations, set for television debut during Sunday’s Super Bowl telecast.

“There are very few companies in the league of where Procter is in terms of their success and ability to innovate,” said Bruce Cohen, a strategist for Kurt Salmon Associates, a retail and consumer products consulting firm.

A.G. Lafley, the company’s chief executive since June 2000, said P’G’s robust innovation pipeline, boosted by Gillette, has helped its steady growth.

“I think we have a pretty good understanding of family needs and wants and concerns, and we are trying to stay really close [to consumers]. We are trying to make sure that our brands and our product lines and our innovations represent superior value for her, for him and for family,” he said during a Jan. 27 conference call with analysts. “So far, so good.”

He spoke the same day that P’G posted a 29 percent increase in second-quarter profits that led P’G to up its 2006 outlook. The company’s stock has hit new, split-adjusted, all-time highs several times over the last two months, including trading as high as $60.15 a share last week on the New York Stock Exchange.

A sampling of new P’G products rolled out within the past month includes:

-Febreze’s Noticeables, a plug-in air freshener meant to have longer-lasting presence by alternating between two scents. It’s added to the 6-year-old brand’s products that include room sprays and “scent stories” fragrance discs.

– Olay Ribbons, a body wash that combines cleansing and moisturizing and joins the myriad face, hand, body, anti-aging and vitamin products P’G has added to the brand since acquiring it in 1985. Kash Shaikh, a communications manager for Olay, says new products for the brand are fueling growth so fast that the brand, which posted $1 billion in sales in 2003, that $2 billion in annual sales is in sight.

– Crest’s Whitestrips Renewal, a stain-removing entry into the anti-aging market, adds to Crest’s line of whitening strips, toothpaste and brushes.

– The Swiffer Sweeper that introduced P’G’s quick-cleaning household brand line in 1999 has been redesigned with new color, handle and upgraded cleaning sheets.

– Duracell, another acquisition through the $57 billion Gillette Co. merger that took effect last October, started PowerPix, a longer-lasting battery for the rapidly growing digital camera market.

Marketing experts say that developing new or revised products is tricky business, costly in research and marketing with the potential for brand-undermining flops that stores will quickly jerk from shelves. Cohen said there also are risks of diluting brand identity and alienating loyal customers.

“There are more failures than there are successes,” said Gary Stibel, who heads the New England Consulting Group.

Cohen and Stibel cited Church ‘ Dwight Co.’s Arm ‘ Hammer, the baking soda brand that has been extended into toothpaste, underarm deodorants and even kitty litter, as among the companies that have been able to build on existing products to make new ones.

P’G uses surveys and scientific research along with personal observation to identify potential new products or uses. Researchers spend hours asking consumers questions and simply watching them go about household tasks.

“They will let the consumer lead, and they will follow them to where, and importantly, when, they lead,” said Stibel, a former P’G executive.

“Sometimes consumers can articulate what their unmet needs are,” said Don VanFossen, Mr. Clean brand manager for P’G. “They talk about things they are frustrated with, things they enjoy doing, things they wish they could do more of.”

Mr. Clean’s AutoDry line, which uses filtered water, is aimed at answering consumer frustration with car-washing messiness and tedious drying to avoid spots. Watching people clean their bathrooms hunched over or straining to reach the top of the shower stall led to Mr. Clean’s Magic Reach, a pole with cleaning pads.

Those products have joined the Magic Eraser, a wall spot-cleaner, to help spark the 48-year-old Mr. Clean brand to triple sales over the past three years, VanFossen said.

And even a young brand such as Febreze can get an overhaul.

“We found our heaviest users were using it every day all over their house, whether there was an odor problem or not,” brand manager John Sebastian said. Besides new Febreze products, P’G also has added Febreze to other brands – Tide detergent, Downy fabric softener and Bounty dryer sheets.