There was a recent article in the WSJ where manufacturers were claiming that the innovation behind releasing capsules was ruining the industry. The manufacturers suggested that making more concentrated solutions as a way of innovating the product is better for all manufacturers rather than a single manufacturer.
My concern is that making a more concentrated solution isn’t innovation; the capsules represented innovation. Companies in the soap industry need to understand that when they market something as innovative, it truly is innovative. The real innovation was based on the changing from liquid to capsules, the fake innovation was making it more concentrated, and then offer bigger cartons so people not only pay more for more; but also use the same amount that they are normally used to.
Rather than complain on the low margins, the manufacturers should further investigate how to better innovate their product to ensure it is easier for the consumers to use the product. Manufacturers should work with consumers to find out what are they doing wrong; and the only bad thing which manufacturers are doing right now is the refusal to accept this innovation in product.
The more worrying thing for the manufacturers is that after innovating, P&G managed to increase their margins significantly, so that leads me to believe that is true innovation; creating a product, removing your competition and increasing your margins for a commodity where replacement options are available in many forms
What manufacturers need to do now is to first of all replicate the product, and focus on making the lives of others easier than what it already is today.
From my limited experience in dealing with laundromats, have companies considered partnering up with a washing machine and letting their solution come out automatically depending on the load? That would for me be true innovation; as I no longer have to worry about how much detergent to put in, that is taken care by the washing machine in association with a laundry detergent manufacturer.
Source: http://professional.wsj.com/article/SB10001424127887323916304578400521297972496.html?mod=WSJPRO_hpp_LEFTTopStories