I have just read in Advertising Age US edition that the number of trademark applications decreased by 17% in the US at the end of june. Following this data there was a Unilever and P&G statement declaring their commitment to innovate and their willingness to increase innovation to offset current consumption crisis.

And then my fears were confirmed. Companies usually confuse quantity with quality or putting it in other words, firms increasingly tend to confuse differentiation with relevance. Let me explain.

Last year more than 250.000 new products were launched accordingly to Mintel database. This represented a 45% increase vs last year and more than double than two years ago. In fact, our intuition could confirm this trend as we can see endless amount of new products in shelves along with frequent firm’s quotes on their commitment to innovate.

However, tell me; what true innovations can you recall from FMCG companies in the past two years?.

What I mean by true innovations? That’s a fair question.

It is difficult to find an unanimous answer to this question among the academic and business community . However I will tell you my view , specially concerning FMCG products.

Differentiation seems to be a characteristic that is widely accepted as required by any innovative product as it is an intrinsic property of novelty or newness. And I have to say managers really perform against it.

The point is that differentiation is not enough. You can find so called “differential products” presented and considered as “innovative products” which in fact, they are not. My favorite example is a recently launched tomato sauce with calcium.

Interesting. Really different . However, can it be considered a true innovation?

True innovation should move you at least to consider the new product as an alternative to your current choice. So going back to the example, Is it really important to get calcium also in your tomato sauce? Are you going to trade the brand you usually buy to try a new one because of the calcium one visionary has added to it?

One of the key characteristics managers tend to forget when developing innovation is relevance. What a beautiful word.

And that’s why we tend to equal quantity with quality and the decrease of number of patents with the decrease of innovation activity.

In a recent research I did on innovation strategy in some product markets in Spain ( detergents, cereals, juices) I found that out of the 300 new products launched between 2006 and 2007, less than half had significant sales after six months and less than 5% existed after the first year. These brands or brand extensions allocated more than 16 mm euro investment to these new products, probably reducing their investments in their core brands.

The result we know: Brand proliferation, core brands weakness, decrease of consumer loyalty and consumer skepticism about new products.

So I have to say that I have mixed feelings about Ad Age data , as it could be that finally, “ less” will mean “more” ( relevant).

Have a great week