Stefan Peters Februari 2012
GfK Strategic Innovation: How to predict new innovations
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Objectives: Why are We Here?
To provoke and inspire 2
NewProductWorks® (NPW) is an interactive innovation center – Over 110,000 global, new product launches
Aids plotting needs for Strategic
Platform development
Inspiration sparking ideas for
Idea Lab™ concept development The NPW® Collection
What’s So Hard About Innovation and Brand Building? f Generally, new products have a 10% chance of success f Less than 10% of new CPG products considered “innovative” f 43% of all CPG products sold with discount f PL sales up tremendously in past 2 years f Focus on building mega-brands vs. new brands – increasing cross category competition
f Touch points are exploding and control has shifted away from marketers
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Some General Principles `
New products is only one way to grow
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Before you extend, make sure core is healthy
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The best innovation starts with great strategy: – Knowing where the market/customer will be – Having key strategic platforms to guide growth – Knowing your organizations’ capabilities
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BUT - God is also in the details – execution, creativity and commitment are as important as strategy – Messy, but fun process
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You have to be willing to take risks – If have to fail at least some of the time
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Not everyone is good at it – get the RIGHT PEOPLE
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Sound Familiar? Uncertainty about the future
Lack of consistent strategic g direction
F Frequent t turnover
Tied to “category truths”
W Weak new product pipeline
To short-term Too focused
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Can’t C an’’t seem to get aahead of the curve
No holistic approach N to innovation
Common Pitfalls Top 10 Reasons for Innovation Failure 10. Lack of customer or market insight (no/poor research)
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9.
Technical/quality or design problems
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Poorly positioned
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Limited/ineffective marketing
6.
Weak distribution network
5.
Strong competitive response
4.
Late to the market
3.
Lack of internal support
2.
Not new and different enough
Innovation Today
And the #1 Reason for Innovation Failure…
1. Inability to accurately identify and meet the needs of consumers in the future
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Innovation – The Possibilities New Product/ Service Concepts New Brand & Marketing Strategies Revitalized Brand Positioning & Architecture New Business Models, Channels, Customers Optimized, Innovative “Consumer Experience” 9
Tomorrow’s
"As competition intensifies, the need for creative thinking increases. It is no longer enough to do the same thing better, no longer enough to be efficient and solve problems.” Innovation - Edward de Bono
“Next practice is disciplined imagination” CK Prahalad 10
Best vs. Next Practices Best Practices
Next Practices
Learning from the past
Create the future
Focused inward
Focus outward
Reduce risk
Generate high reward
Optimize
Constantly reinvented
Experimental
Play by the rules, only better Tested, traditional approaches
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[
[ Now – Only Better
Create new rules Unique customized approaches [ Disciplined Imagination
[
Easy To Institutionalize
5 Organizing Principles
[Context matters: How you define your business today is probably going to change… [
[Consumers need states are multi-faceted and drive behavior go through predictable waves of evolution [Categories (providing real clues for big opportunities)
[
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[
[Timing is critical – must be timed when market is ready
[
your category influences [The world aroundperception and readiness for what’s coming next
[
(paradigms need to be challenged!)
What Ideas Do These Spark?
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A Few Key Innovation Principles
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Multi-Touch Consumer Lens
Inside-Out and Outside-In Thinking
Challenging Paradigms
Beyond Rational - Emotion is King
Future-Oriented Strategic Platforms
“Smart” Creative
Culture of Innovation
Thinking in different directions/Challenging Paradigms The Straddling Bus - What paradigms are being challenged?
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Our Perspective on Innovation Disruptive Innovation Can be Predictable Evolution of Needs
Consumer needs evolve in predictable ways
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Adoption of News
Innovation “news” that meets needs is adopted in predictable ways
The process starts with a model of the evolution of consumer need states and category innovation Consumer Need State Evolution Model
Four Cornerstone Motivators Affect Purchase Behavior SAFETY Personal, Communal, Environmental
“It won’t hurt me, my family, the planet…”
WELL BEING Health Vitality
“It’s really good for me…”
GRATIFICATION
CONVENIENCE Saving Time, Energy, Space
“Me/my loved ones are “It’s so easy for worth it…” me…”
Based on consumer’s lifestyles and values, the role of any one motivator in the purchase decision is dialed up or down
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How Might The Category Evolve Next? Wave 1
Wave 2
Wave 3
Wave 4
Core Benefits (Basic Products)
Advanced Dimensions of Core Benefits
Fusion of Core Benefits
More Prominent Secondary Benefits
Security/ Peace of Mind
Fusion
Wellbeing
Fusion Gratification/ Enjoyment
Fusion
Convenience/ Freedom
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Wave 5 - Game Changing Disruptive Innovation Wave 5
DIY “Clean”
Professional “Clean”
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New Category
See the Future Identifying emerging opportunities where customers could go 3-5 years out is a key to finding game-changing innovation…
what we call Wave 5
Bringing the future into focus
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Innovation Tree
Medicated gloves Microsponge
Shows prevalence of innovation “news” in the market in this category
EMERGING technology Vitamin PRODUCT (keeps A stable) Orally NEWS administered
Relaxed Stressed Calming Skin Inflammation
Environmentally Sensitive Anti-Venon (snake bites)
Neutralize Free Radical Damage (Antioxidants)
Relieves Muscle Tension Homeopathic Biofungicidal Controls Sterile Application (herbs) Itching (pumps at Self Sterilizing every angle) Promotes healing Tip Freezing Bacteriostatic 100% Pure Of scars and Bio-stimulins Kills Bacteria No Mess Natural Fruit Goats Stretch marks To stop Sunburn Application Extracts Milk Treats Rosacea Treats Psoriasis (medicated For the Time specific Hypoallergenic Gender Targeted swabs) gym “Therapeutic Formulation Restores Elastin (Male, Moisture” To mature skin “ungendered”) (Day/Night) Anti-inflammatory One Step Cruelty Invisible All Natural Aloe Vera To-Go (Medicated Free (Flesh Colored Exfoliates skin (Belt clip) Cleansing Pads) Paba Acne Treatment) 100% Vegetable Bonus Size based “Medicated” Non-greasy Dermatologist Protective Barrier Intensive Moisture formula Benzyol Peroxide (20% Urea cream) Tested Against Moisture No dyes Vitamins Bar form Loss No colors or harsh (Ease of use) To-Go Prevents Chemicals added Treats Acne Scented 100% Fragrance Applicator dryness/ Free Foam chafing Clinically Proven Pump Treats minor To relieve dry skin Oil to Penetrate applicator skin irritations Skin Helps prevent dryness, chafing
MAINSTREAM PRODUCT NEWS
CORE PRODUCT NEWS
THERAPEUTIC SKIN CARE CONVENIENCE
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WELL BEING
SAFETY
GRATIFICATION
News is coded by motivational driver to see core and secondary activity
Circles show relevant leaves of news that exist in more evolved categories but not yet in the core category
Related “leaves” of news are clustered into “newsworthy” benefit spaces `We call these Future Innovation Branches; there may be 2530 identified Evolution of Category News (The Trees)
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Tipping point opportunity where news will deliver against evolving needs 1-5 years out
Future Innovation Branches (tipping point opportunities) can be sequenced based on how they will evolve & be communicated to consumers ABC
Optimum Hydration
Further Out
AAA
BBB WWW
DEF CCC
IJK MMM
DDD
LLL EEE
XYZ
XXX
LMN
GGG
HHH
GHI
ZZZ
YYY
MMM
FUSION
FFF
OPQ NNN RST VVV
Near In
TUV
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Safety
OOO
RRR
QQQ
FGH
Well Being
Gratification
Convenience
We bring an analytic framework that
Finding Wave 5 Innovation
helps predict GAME CHANGING WAVE 5 opportunities
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Strategic opportunity platforms can then be defined where a brand/company has real leverage, providing innovation focus Future Opportunity Map™ Consumer Motivators
Safety
Well Being
Gratification
Convenience
Emotional Needs Future “benefit space” addressing consumer needs
• Leverage company’s technical skills
Segments
• Easily understandable
How future benefits may be delivered as category evolves
Relaxed Skin
Corporate Citizen
Nature as Healer
Mindless Protection
Proof is in the Power
Proactive Defense
• Strong strategic underpinnings 24/7 Comfort
Treating Anytime
+ COMPANY LEVERAGE
+ COMPETITIVE LEVERAGE
Strategic Innovation Platforms High-potential, ownable market space where unmet or under met emerging needs overlap with brand, operational, strategic & technical leverage 25
• Ownable, future-oriented
• Consumer benefit-focused
Functional Needs
Cutting Edge Influencers: Macro Trends, Science & Technology
Future White Space
Platform Criteria
• High-potential commercialization paths • Rich in opportunity for breakthrough innovation Platform: 24/7 Comfort
How to be the future?
The T he Ann Ann Arbor Arbor Facility Facility
GfK specializes in helping companies and brands…
SEE the future
Define tomorrow’s ownable opportunity space The T he Idea Ide ea a LLab ab a b
BE the future
Fill it with relevant, “ontime” innovation
The NewProductWorks® Collection
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Smart Creative Linked to Strategy
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Timing Matters
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Don’t Forget Timing Wishbone bought Salad Spritzers in 2006; Newman's Own and others soon followed with their own “spritzer” versions
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Before its Time:
At the Right Time:
1988
2006
Don’t Forget Timing Before its Time:
Avert Virucidal Tissues by Kleenex
1984 30
At the Right Time:
Kleenex Anti-Viral Tissues
2004
Thank You
Contact: Intomart GfK Stefan Peters
[email protected]
Deep category coverage (~500 samples/ category)
Inspiration & learning across categories & time
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