Revlon’s “Vital Radiance” - a failure to spark innovation led growth with some interesting lessons
In a bitter fight to grow against formidable rivals such as Proctor and Gamble and L’Oreal, cosmetics manufacturer Revlon tried the innovation route, with a new line of cosmetics called “Vital Radiance,” introduced in January of 2006. The products had a lot going for them. They were targeted at an older demographic of women, who are generally enthusiastic about any product that makes them look younger, right away. According to users, the products helped make them look younger, right away. The research behind the offer was formidable, and it was introduced with great fanfare, including a web-based personalization campaign. Many users developed quite a passionate affection for the products.
So what could have possibly gone wrong? Although it’s hard to know in retrospect, the assumptions underlying the major launch were not borne out. Specifically:
- Women would respond well to being targeted by age (the products are intended for “prime time” women over 50. Our research suggests that you are much better off targeting consumers by attitude and behavioral patterns, not by demographics. A classic mistake.
- The products would not need to leverage the Revlon brand. In a move which baffles me, the whole product line was introduced with its own identity, failing to leverage the powerful and very well known Revlon brand. It’s basically leading the product to be set up like a startup, failing to leverage the company’s investments in brand-building.
- There was no need to use a well-known spokesperson for the brand. Other manufacturer’s use models such as Diane Keaton and Christie Brinkley to represent their products, again leveraging on names customers will recognize
- The products were introduced at fairly high price points
Had the company done some discovery driven planning, they might have caught some of these assumptions early.
From a corporate, rather than a project, point of view, the failure of Vital Radiance also presents classic issues. Since it wasn’t branded “Revlon” and carried no synergies with the rest of the organization’s projects, it’s what we would call a “platform launch”. This is an attempt by a firm to create future new core businesses by extending their reach beyond their core. The problem with platform launches is that they require a core business that is healthy to work effectively. If the core isn’t performing (which it isn’t, given Revlon’s shrinking market share), platform launches can often weaken the business, in contrast to the aspirations of management. The Vital Radiance flop is as much a failure of strategy as it is of marketing, and illustrates a common reason that innovation-based strategies fail—namely, poor management of the portfolio.
According to some sources, it cost Revlon some $70 million just to discontinue the line, and the firm’s operating profit was hit approximately $100 million as a result of this discontinuation. The senior team lost their jobs, as did 10% of the workforce. A new group, according to the Wall Street Journal, is returning to “basics” and trying to revive the core brand. For more on the story, click here.
Filed In: Discovery Driven Planning