Replacing the Innovation Funnel
Eric MeyerDirector of Insights and Innovation
Sunny Delight Beverage Co.
1
Agenda
Current Innovation Funnel
Consumer Segmentations Demographic Psychographic Organoleptic
Consumer Directed Development Tunnel “Who” Immersion Proposition Building Blocks Proposition Development
2
Current Innovation Funnel
3
The New Product ChallengeIn 2008* …
122,743 new products introduced in the U.S.
0.2% achieved more than $10 million in retail sales
Most new items were new sizes, flavors, packaging, health claim line extensions of existing brands
In many cases, package size was reduced to avoid price increases
Of the top 100 new items, 98 items were extensions of existing brands
* New Product Introduction The Nielsen Co., January ‘09
4
5
Top 10 New Items Introduced in 2008
New Brands $ VolumeZyrtec $208 MMBud Light Lime $110 MMGatorade Tiger $61 MMZyrtec-D $49 MMKeebler Townhouse Flip Sides $43 MMChildren’s Zyrtec $36 MMTide Total Care - Detergent $30 MMPOWERade Zero $27 MMPediPaws Pet Nail Trimmer $27 MMGillette Venus Embrace Razor $25 MM
Source: Nielsen Strategic Planner, 52 Weeks Ending 12/27/08, Total U.S. Grocery/Drug/Mass excluding Wal-Mart
6
248
3 612
51020
= 10 $100M= 20 $50M= 40 $25M
TestsProjectsConcepts Winners
124
For going $100M increase in sales, you need …
Source: R. G. Cooper – Winning at new productsData from PDMA, NPD Survey
Ideas
Innovation Funnel
Total Pipeline
Cooper Stage Gate Industry Innovation Model
InnovationInnovation
StrategyStrategy
PrioritizationPrioritization
Future StateConsumer DrivenInternally
Informed
Make the Funnel More of a Tunnel
Ideas
Results
Current StateInternally DrivenConsumer
Informed
7
SDBC Innovation Model
8
Segmentation
“Who”Immersion
TeamSynthesis
RapidPrototyping
ConsumerSynthesis
“What”Immersion
TeamSynthesis
RapidPrototyping
ConsumerSynthesis
Consumers create the total proposition, team provides informed stimuli
Innovation process Clarifies the “fuzzy front end” of innovation Achieves speed to market by concurrent, holistic proposition development Delivers results efficiently by increasing the odds of new product success
Consumer SegmentationDemographicPsychographicOrganoleptic
9
Demographic Segmentation
Oldest form of consumer segmentation, not very exciting, but still practical in the right context
Age Gender Ethnicity Income Geographic Life Stage
Focus can be narrowed by combinations Un-acculturated Hispanic mom’s w/ Children ages 8-12
10
Hypothetical Segment Dimensions
Fin
ancial C
on
straint
Tim
e Co
nstrain
tLunch
Dinner
Snack
Attitu
des
Re
so
urc
es
Situations
Nutrit
ion
Value
Statu
s (te
ens)
Func
tion
Breakfast
No
Co
nstrain
ts
Psychographic Segmentation
Separates consumers based on attitudes and behaviors to go beyond simple demographics
Describes key areas where people in each segment are statistically different from others
General attitudes, e.g. Like to try new things Category specific attitudes, e.g. Nutrition Constraints, e.g. Perceived disposable
income
Deliver initial insights to the brand regarding: Purchase motivators Product benefits to meet consumer needs Branding and brand positioning Communication with target consumers
11
Organoleptic Segmentation
Separates consumers based on product usage preferences to go beyond simple demographics
Defines key product attributes that drive in-use liking for different segments
Differences set target product formulas that differentiate brands or product lines
Identifies key areas of unmet needs and points of difference vs. competition
12
Segmentation Summary
13
Secondary Research
General Primary Research
Segmented Primary
Research
Examples
Industry reports Store dataPanel data
EthnographicFocus groups Surveys
EthnographicFocus groups Surveys
Best Use AcquisitionGlobal Expansion
Competitive learningInforming segment researchNPD volume projection
Concept development Product development Marketing development
For NPD Too distant, can’t see or feel what is going on
Disagreements & conflicting opinions cause confusion and lack of a clear vision
Patterns emerge from like thinking, behavior and beliefs, providing focus
Segmentation Summary
14
TestsProjectsConcepts WinnersIdeas
Innovation Funnel
Segmentation brings clarity to the “fuzzy front end” and eliminates pursuing off target projects
Consumer Directed Development
“Who” Immersion
Proposition Building Blocks
Proposition Development
15
Case Study The “Who” immersion
Day in the life research
Proposition building blocks Team ClaimStormTM
Concept fragments Team ProtoStormTM
Product/Package starters
Proposition development Consumer Synthesis Field work Holistic ProtoStormTM Consumer Shepparding
Proposition optimization
16
The Team
17
Marketing
Market Researc
h
Product Dev.
Package Dev.
Sales
Ad Agency
Graphics Agency Finance
Flavor House
Bottle Supplier
Research
Agency
The Bosses
The Latino Ideas CompanyConill
Industry leading
Hispanic branding
Day in the Life
18
“Who” Deep Dive Conclusions
Focus on the functional benefit area of combining taste with nutrition
Focus on the emotional benefit between Moms and their children
Six product opportunities identified
19
Some current consumers were
using a food processer to
make carrot juice and serving it
mixed with SunnyD!
Concept Fragment ClaimStormingTM Benefit and Reason to Believe Statements
Gold Standard product prototypes
Orange Carrot
Consumer Synthesis Storytelling (collage)
Talk through the title, pictures/words/thoughts and feelings
Concept Fragments Share the potential Sunny D statements and discuss the reasons for their reactions. What are the key benefits you and your family get from preparing & drinking?
Taste prototype products Initial reactions? What do they like about the prototype? What needs to be changes/improved?
Product ProtoStormingTM
Intermission to Helicopter Up
21
TestsProjectsConcepts WinnersIdeas
Innovation Funnel
Minimal initiative specific time spent, scope narrowed to 3 ideas One vector DOA One vector off brand strategy Two other vectors combine
What remains is soundly based in emotional/functional needs
“What” Immersion - Field Work
22
Home visits Hand picked consumers from the Consumer Synthesis
Groups
Shop-alongs Go directly to her store from her house Shop through her eyes
Another Helicopter Up
23
TestsProjectsConcepts WinnersIdeas
Innovation Funnel
Team has internalized First Moment of Truth shopping habits & purchase drivers maximizing point of purchase trial potential
Team has internalized Second Moment of Truth product & packaging requirements maximizing repurchase potential
New SunnyD Orange CarrotA sunny combination of taste and nutrition
Accepted Consumer Belief
Benefit
Reason to believe
F
Holistic ClaimStormingTM
New SunnyD Orange CarrotHomemade taste with SunnyD convenience
G
New SunnyD Orange CarrotA better alternative to sodas that your family will love.
H
24
Accepted Consumer Belief
Benefit
Reason to believe
Accepted Consumer Belief
Benefit
Reason to believe
Graphics execution
Holistic ProtoStormingTM
25
Package size Live samples to
hold and pour
Product Live samples to see and taste
Color Thickness Sweet/sour balance Flavor intensity Orange to carrot ratio
26
Holistic ProtoStormingTM
27
Consumer Synthesis
Es importante preparar comida casera para mi familia con ingredientes frescos, pero a veces es bueno poder disfrutar de sabores tradicionales sin tener que perder tiempo y esfuerzo en la preparación.
Presentamos SunnyD Naranja-Zanahoria, una combinación deliciosa de naranja y zanahoria como la que harías en casa. Ahora disponible para que la lleves contigo a cualquier lugar.
Nuevo SunnyD Naranja-Zanahoria es una combinación dulce y refrescante entre el rico sabor cítrico de Sunny D y lo bueno de la zanahoria, que te brinda 100% de vitamina C y 20% vitamina A en cada porción. No necesitas lo complicado del extractor; todo viene en la botella.
Puedes encontrar el nuevo SunnyD Naranja- Zanahoria en la sección refrigerada de tu supermercado, junto con otros productos de SunnyD.
Nuevo SunnyD Naranja-ZanahoriaSabor casero con la comodidad de SunnyD
Optimized Proposition
28
SDBC Innovation Model
29
Segmentation
“Who”Immersion
TeamSynthesis
RapidPrototyping
ConsumerSynthesis
“What”Immersion
TeamSynthesis
RapidPrototyping
ConsumerSynthesis
Consumers create the total proposition, team provides informed stimuli
Innovation Tunnel Summary
30
TestProjectConcept WinnerIdea
Innovation Tunnel
Picking, and becoming intimate with, a focused segment surfaces unique, high potential opportunity areas First and Second Moment of Truth field research informs execution details to maximize trial and repeat purchase Focusing team ideation on proposition fragments, versus brainstorming to find the answer, allows consumers to
construct the ideal solution