Heineken’s Charzat on how innovation can damage your brand

While some companies may have a need to accelerate their innovation, the journey may not always take off the way it is intended.

“Innovation can damage your brand,” warned Cyril Charzat, senior director for Heineken APAC.

Speaking at this year’s Brand Innovation Summit 2015 by HP held on 17 June 2015 at Resorts World Sentosa, Charzat discussed the challenges of innovation and shared the company’s three tips for successful innovation.

Challenges of innovation

“Innovation distracts the organisation from business delivery,” he said. He explained the complexities that accompany the process of executing an innovative idea can complicate the general business goal because of additional tasks such as managing the supply chain and putting project teams in place that are needed for innovation.

Since companies need to invest in research and development and marketing when launching an innovative idea, the costs of such projects should always be considered.

“Innovation is expensive in time and budget, and brands need to take note of that. In terms of complexity, innovation can damage your brand.”

Before innovating, a brand must be sure its next move contributes something positive for the brand.

“The innovation must communicate something positive that contributes to the equity of your brand.”

He cited a few examples such as snacks brand Frito-Lay introducing “healthy snacks” and toothpaste brand Colgate selling entrees as some instances where brands got “hurt by the wrong innovation”.

“The core equity of your brand is going to be impacted by the messages you’re giving to the consumers,” he said, adding, “there are brands that are suffering from an association with their past innovation that failed and brought a bad image to a company or a brand.

“And because consumers are aware of these past failures, it will impact your brand equity. The fact these did not deliver on their goals, can impact the brand in the long run.”

The complexity of innovation can impact the core equity of a brand if the message confuses the consumers.

Yet, brands are still eager to innovate despite these risks.

“Even the most traditional brands like champagne brand Dom Pérignon collaborated with industrial designer Marc Newson to launch its product wrapped in Newson’s designs,” Charzat said, acknowledging the success of the innovation led to increased sales and brand awareness.

Hence, according to him, the key question should be how to innovate the right way.

Three basic rules for successful innovation

  1. Always check the brand is healthy.

“You don’t innovate to fix a problem, if you have a problem, you fix the problem differently before you embark on a plan to innovate.”

Innovating to fix a present problem is much like “hiding the dust under the carpet” since it seduces only loyal customers while making the problem merely dormant.

“In the end, the problem still remains.” To verify the health of a brand, a company must ensure it is doing well in its market.

  1. Be single-minded about the objective

A brand must be clear about its business objectives to support innovation sustainably. “Brands need to have a plan to invest sustainably – they must believe in the innovation and won’t pull the plug on the idea,” he said.

There needs to be a proper assessment of the business opportunity and what innovation can bring to the business.

  1. Business versus consumers

“Fast-moving companies look at high repurchase rates to verify a sustainable business case,” he said.

In judging an innovation before launching, a brand must ensure three key stages from a consumer’s perspective regarding its product: (a) I understand it, (b) I would certainly buy it and (c) I love it.

He advised that innovation must create some appeal for consumers while simultaneously building brand equity.