Product Benchmarking: Lip Service, Window Dressing or Competitive Advantage?
By: Peter Kaplan, PhD, TRI/Princeton
Posted: February 16, 2010
Soaps clean, moisturizers moisturize and conditioners lubricate. When a team or company is primarily focused on benchmarking, it can be difficult to make time for what is truly innovative about formulations. More importantly, years before the current year's budget squeezes, most companies begin to cut back on competitive product testing and analysis as recurring costs that distract from innovation.
In a fast-moving marketplace, few would disagree that product performance benchmarking is critical to achieving and maintaining an industry-leading position. However, is this statement just lip service in the current environment? The blistering pace of market changes and tight launch schedules have been limiting the breadth of product benchmarking studies for some companies. Is this trend impacting the true value that these studies can provide?
Some organizations continue to benchmark regularly to ensure their products measure up against the competition. One company, for example, had developed a new line of molecules for hair conditioning from a 2-in-1 shampoo formulation. While these molecules exceeded the project targets for lubrication, benchmarking helped to identify challenges in delivering other customer expectations. Addressing benchmarking concerns led to finding the sweet spot in formulation space and facilitated the successful marketing of the technology.
Another company developing a technology for preserving hair color discovered that while efficacious, the technology turned out to be similar in performance to existing mass-market products. This finding allowed the company to refocus its development program on other potential chemistries. The benchmarking effort saved the costly scale-up and launch of a mediocre technology.
Formulators also have found ways to put benchmarking to good use. One consumer goods company developed a new class of skin care formulations that provided immediate visual benefits. However, benchmarking identified alternate, lower cost routes to the same benefit and led to the improvement in product price positioning and improved profit expectations.