Stefan Peters
Februari 2012
GfK Strategic Innovation:
How to predict new
innovations
1
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
4
Some General Principles
`
New products is only one way to grow
`
Before you extend, make sure core is healthy
`
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
`
BUT - God is also in the details – execution,
creativity and commitment are as important as strategy
– Messy, but fun process
`
You have to be willing to take risks
– If have to fail at least some of the time
`
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
6
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)
7
9.
Technical/quality or design problems
8.
Poorly positioned
7.
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)
[
12
[
[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?
13
A Few Key Innovation Principles
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ƒ
Multi-Touch Consumer Lens
ƒ
Inside-Out and Outside-In Thinking
ƒ
Challenging Paradigms
ƒ
Beyond Rational - Emotion is King
ƒ
Future-Oriented Strategic Platforms
ƒ
“Smart” Creative
ƒ
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
TIME
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Wave 5 - Game Changing Disruptive Innovation
Wave 5
DIY
“Clean”
Professional
“Clean”
19
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
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• 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
26
6
Smart Creative Linked to Strategy
27
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
29
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
Stefan.peters@gfk.com
Deep category
coverage
(~500 samples/
category)
Inspiration &
learning across
categories & time
31