Choices, choices: are brand managers missing the point with market research screeners?

Karen Johnson argues that, due to overwhelming choice available to consumers, the high failure rate of FMCG products may possibly be linked right back to the screening questionnaire.

 

A few years back an article in The Economist opened with the statement: ‘If you have everything in 57 varieties, making decisions becomes hard work.’

The article went on to talk about the concept of consumer choice and FMCGs, highlighting that the average American supermarket now carries 48,750 grocery items, five times more than in 1975.

In a bid to attract time poor consumers, it’s no surprise that Australian marketing and brand managers are committed to making their product stand out in the supermarket, competing for the attention of consumers and for shelf space. But, is their focus and personal relationship with the product causing them to think too narrowly about who is actually going to purchase that product and how often they are going to do it?

In 2014 product lines and consumers have moved on, but, marketing and brand managers remain tied to convoluted market research screening questionnaires.  These screeners fail to acknowledge changing consumer habits, choice and the proliferation of variety within individual product lines.

 

READ ALSO: Karen Johnson: Researching the researchers: are we getting it right? »

 

The example provided by The Economist is the perfect case in point. These days crisps (or chips as we refer to them) don’t just come in plain or crinkle cut, they come in huge variety of flavours like jalapeño pepper, roast ox [Yum! – Ed], horseradish and sour cream, chilli, sweet chilli, sea salt, etcetera etcetera.

Chips are no longer just plain or crinkle cut, they are crinkle-cut, thick-cut, ridge-cut, square-cut, hand-fried, reduced fat, sold in six-packs, grab bags, party size or family packs.

So what does this mean for overwhelmed and time poor consumers and market research screening questions? Do they actually accurately remember what they have brought when and how often? We have found that marketing and brand managers tend to want to ask questions tightly and scripted and outdated questions that continue to drill down so much that many quality survey respondents are ultimately excluded.

The concept of the ‘lapsed or light user’ provides a good example. If a consumer doesn’t buy a product for a while it doesn’t necessarily mean they are a light or lapsed user. Due to the overwhelming choice that consumers have today they might not accurately remember the last time they purchased a particular product. What if they bought chilli chips one month and sweet chilli the next? It doesn’t mean they are actually a lapsed user, they are just choosing a different flavour of the same product. So what if they haven’t brought something for a few weeks, they could just be waiting longer between purchases.

Also, don’t changing lifestyle factors also influence the frequency that consumers purchase FMCGs? For example, research released by Woolworths last year highlighted that the big weekly shop was dead. The ‘Woolworths Trolly Trend Report’ highlighted that more than a third of the items in Woolworths’ supermarket trolleys are purchased on promotion. If large numbers of people are purchasing on promotion then screening questionnaires should be developed to take this change into consideration. After all ‘lapsed or light user’ might be more inclined to buy something that’s on sale or take up a ‘buy two’ discount offer meaning they may not purchase that product again for a while.

We believe that changing consumer habits need to be given as much consideration as crafting questions that weed out serial survey respondents. Well-designed screeners in turn promote quality research panels and quality research panels give relevant insights that can be used for marketing and branding purposes.

It has been reported that over three quarters of new FMCG products fail within a year of launch in Europe and it’s feasible that these figures could also apply to Australia. So, could a high failure rate of FMCG products be linked right back to the screening questionnaire? It’s a subject that definitely needs further investigation.

 

This guest post is authored by Karen Johnston, director of Stable Research.

This research agency has created a tool that tests new product ideas in 48 hours

A new tool, called eValuate Express, can identify winning product ideas in as little as 48 hours and improve speed to market for successful innovation, says its creator TNS.

 

Global research consultancy TNS is launching an express concept screening tool that allows businesses to determine in as little as 48 hours whether a new product idea will drive top-line business growth.

TNS’ tool, called eValuate Express, will assess whether an innovation has the potential to attract new customers or whether it risks cannibalising existing products. The agency says it has been developed in response to the increased pressure that organisations are under to get new products to market quicker while reducing failure rates.

“With at least two out of three new product launches in Australia under-performing, companies need to be applying far greater scrutiny to the innovation process,” says Mark Hobart, executive director, head of innovation and product development at TNS Australia.

READ: Marketing‘s series on new product development, part one, part two, part three, part four »

“Companies must determine which concepts are best placed to drive growth before huge budgets are lost on R&D, packaging and marketing campaigns for a product doomed from the start.”

eValuate Express is based on TNS’s flagship growth tool Concept eValuate, a methodology for improving the accuracy of in-market growth predictions. TNS created the 48-hour express version to prevent expensive mistakes at the earlier stages of the ideation process and guide investment towards winning ideas from the start.

The method claims to measure the incremental growth a concept will deliver by looking at consumer behaviour at an individual level. For example, whether someone has a high or low probability of purchasing the new product. TNS says this allows a much more accurate prediction of the expected value that each customer will provide.

“Most screening promotes a concept with the highest trial potential. This approach is fundamentally flawed because these ideas don’t always provide an incremental growth opportunity and may even destroy value through unwanted cannibalisation,” Hobart says.

 

Product of the Year Awards announced: who’ll get the POTY bump?

Australians have cast their votes in a battle of the brands and products, with the 2014 Product of the Year Awards handed out last night to recognise the best performing new product innovations. Winning products typically receive double-digit sales bumps.

Personal care company Beiresdorf, which markets Nivea and Elastoplast, proved the most innovative retail brand with four category award-winning new products, closely followed by Aldi, Panasonic, Reckitt Benckiser and Woolworths with three award-winning products each.

More than 16,000 household shoppers across Australia were asked questions about products in 43 categories, ranging from personal care to appliances to household cleaning, as part of the nation’s largest consumer survey of new products conducted by Nielsen.

Judged by consumers using criteria including the products performance in trial, likelihood of purchase and whether or not they would recommend the product to others, the resulting winners represent the cream of the crop of new innovations.

Sarah Connelly, director of Product of the Year Australia said the annual Product of the Year Awards create a positive outcome for both manufacturers and consumers.

“The consumer is the ultimate winner of Product of the Year because the competition encourages brands to evolve their product offering and creates an industry benchmark for all new products to aspire to,” said Connelly.

“The Product of the Year Awards also provide a credible and independent source of information to help consumers navigate the competitive retail market. Consumers can identify the Product of the Year sticker on a winning product and know that the product has passed our rigorous review process.”

“For the category winners, there is also the benefit of increased awareness and interest in their products. On average, previous winners experienced increases of 10-20% in sales following the award win with some even experiencing increases across their entire brand portfolio.”

The most competitive categories for Product of the Year 2014 were ready meals, sweet treats, household cleaning and over-the-counter medicine, awarded to Woolworths Bag N Bake, Chocolate Waves, Scotch-Brite Stay Clean Scrub Sponge and Dish Cloth and Codral Relief 6 Signs Cold & Flu Tablets respectively.

The 2014 Product of the Year Awards received 135 entries, with winners chosen from 43 different categories. This was up from 34 categories in 2012 and 28 categories in 2011.

New products must have launched between 1 January 2012 and 31 August 2013 and be nationally available to qualify for entry.

The 2014 Product of the Year Category Winners were:

POTY winners 2014

What a footy coach and lead violinist can teach business about innovating under pressure

What does the coach of the South Sydney Rabbitohs have in common with the artistic director of the Australian Chamber Orchestra (ACO)? And what relevance do either have to the business world? That was the question many of the attendees at a recent seminar run by agency How to Impact would have been asking.

The answer: more that you would think.

The Sydney-based innovation agency brought the worlds of chamber music and professional rugby league together as ACO artistic director and lead violin, Richard Tognetti AO, and coach of the NRL’s Rabbitohs, Michael Maguire, spoke to audience members about innovation and the pursuit of excellence in high-performance teams. Both leaders are continuing to push boundaries and challenge tradition in their chosen fields.

How to Impact is an innovator in its own right, marrying parallel fields by bringing leaders who pursue excellence in all areas together, revealing that the pursuit of excellence and the desire to drive innovation practises and invigorate people is not limited, and can unite fields that seem to have nothing in common.

Both Maguire and Tognetti say their techniques can be translated to the corporate world as they have gained knowledge and skills from talking to people in all positions and professions, showing that the drive for innovation and excellence transcends any particular workplace.

“There are so many similarities. NRL is like an orchestra, talent is only unleashed as part of a team and everyone needs to put egos aside,” says Tognetti.

Both Tognetti and Maguire have achieved acclaim in their fields, but neither are happy to sit back and enjoy their apparent success, instead believing constant analysis and communication across all fields is essential to continued excellence, success and a strong team culture. This lack of complacency seems to drive the pair, as they agree that you can never achieve complete ‘excellence.’

“What is excellence?” asks Tognetti. “Excellence is a word; we are always on the hunt for it, when do you reach it? We are always trying to get better.”

Pushing the boundaries is not new to Tognetti, who has been named a National Living Treasure and an Officer of the Order of Australia. After being appointed lead violinist and artistic director of the ACO at age 25, Tognetti has helped drive a shift in culture. One of the most immediate and obvious changes he instated was ditching the ‘penguin suits’ in an attempt to make chamber music more accessible.

“What people have in mind, though, when they think of chamber music is a bunch of quite stiff, fairly wealthy white people sitting in rooms in middle Europe.

“And of course it came out of that tradition, it did, you can’t pretend it didn’t, but of course the great thing about music is that you can’t see it and you can’t own it… it lives in the ether. It’s evolved so you could argue that there are rock bands that are playing chamber music as well,” he says.

One of the ACO’s most innovative projects is ‘The Reef’, created in 2012. Here Tognetti combined surf, landscape and music to create a fusion of the two. Tognetti took chamber music away from the traditional confines of a theatre into nature.

“We didn’t even consider it to be chamber music except that chamber music is a definition that has you within four walls, being a chamber and, music, you can do whatever you want so long as you make some kind of sound that emotes… has connection to people on an emotional level,” he says.

“Music is only one part of the adventure,” he says. He says this belief ensures he continues to gain inspiration from all aspects of life, allowing music to break more barriers and affect more people.

In 2005 Tognetti established the ACO’s Education and Emerging Artists program.

For Maguire, the key to success is leading by example. Often coaching young men who are in the spotlight, there is a big margin for area. Maguire says  the players constantly look to him, so he ensures that he is consistent, fair and never complacent.

“In rugby league you will not win a big game or grand final if you have a player that sits anywhere above the team. Individual success comes from the team success.”

With this sentiment Maguire never treats anyone differently. To show this he uses the example of socks – if any player comes to training wearing a different pair of they will be sent back to change.

“We go out to training every day and every now and again a player will wear a different pair of socks. I know you think its only a pair of socks, but why does he need to be different? Ultimately at the end of the day why should he be outside of what the team standards are.”

Managing director of How to Impact, Matt Whale, says the two men show that pressure to perform and the desire to achieve excellence should not stunt a pursuit for innovation and change.

“We set out to explore how these guys do their jobs under extreme pressure without sacrificing the question of innovation. Whether in sport, music or business you have to take risks and we wanted to share inspiration form contrasting worlds of dynamic team performance,” he says.

Whale says the examples of sport and music show that diversity can be an asset, as stepping outside the box and taking inspiration from a variety of areas can help ensure an institution or corporation does not become stagnant and self contained.

“It amazing how many similarities you find. It’s really telling. Learning from and collaborating with high achievers in parallel worlds shows that excellence is something that is contagious, and should be contagious.”

“Everything we do can be applied to the corporate world,” says Maguire. “We are constantly learning and educating each other, we draw inspiration from everywhere and then apply it with discipline.”

 

Researching the unresearchable: consumer research in predicting success of new tech products

As a market research group that conducts a lot of research in the new emerging technologies space, we often get asked about our view on the fact that Steve Jobs famously ‘didn’t believe in market research’. As stated in his biography, Steve Jobs by Walter Isaacson, Jobs has been quoted as stating: “People don’t know what they want until you show it to them.  That’s why I never rely on market research.”

The interesting point here is that most market researchers would, on the whole, agree with him. Consumers often can’t articulate what they want, but they can respond passionately (positively or negatively) to a proposition put in front of them. They will embrace ideas or products that ultimately will make their lives easier, or better, or save them time, or save them money… and Steve Jobs knew this.

Every decent market researcher knows you should never start a research study by asking consumers what they want. Various approaches should be used to explore how consumers are living their lives, interacting with technology and other products and interacting with others in society. This observation, exploration and analysis is used to develop an understanding of consumer pain points and joy points in order to identify the opportunities available for new innovations.

Similarly, when it comes to researching any ideas or propositions that have been developed, it is essential that the new technology is articulated in consumer-friendly language otherwise consumers can’t relate that technology to their current lives. While consumers may struggle to understand the particulars of the technology, the approach we take in researching new technologies is to focus on ensuring consumers understand the end-benefit. How will the new technology better meet their needs than what is currently available?

In researching innovative technologies, common pitfalls are at polar ends of the spectrum, that is, either providing consumers with too much education as part of the research stimuli, causing confusion, or not providing enough education, particularly in focusing too much on the platform and not its execution.

The goal of stimuli should be to get individuals to the level of education they will have at the time of purchase. This stimuli can include multimedia if that best explains the applications and benefits. And it often incorporates ‘future state conditioning’. That is, describing the scenario as a future state and putting consumers into this context – how they would use the innovation and the benefit of the innovation at some fixed point in the future.

There are other important principles to keep in mind, based on our extensive research and database of tests conducted over the last 25 years:

  1. Trends that are starting to pass their peak test well, but don’t necessarily perform in market well, due to high levels of familiarity. When I say ‘test well’ I mean against the usual simple purchase intent type scoring mechanisms,
  2. incremental line extensions test well, but don’t necessarily perform well in market – once again, familiar consumer territory, and
  3. products a little ahead of their time often do well in market, but don’t test well (on straight purchase intent).

 

Therefore go/no go decisions on whether to progress the innovation should not be as simplistic as thresholds of ‘top two box’ (definitely would buy/probably would buy) purchase interest, as can be best illustrated by an example of R&D work we undertook (below). The results make no sense and bear no relationship to what happened in the real world. The things that scored highest were a little smaller and a little faster to come and go.

The trouble with some measures

We consistently see this for Purchase Intent, Interest Ratings, Rankings of Idea and comparison to controls which means that the most commonly used ways to prioritise ideas in research are flawed.

Our 25 years of experience researching technology innovations means we have seen it all. We’ve seen breakthrough ‘headed for the moon’ successes and terrible ‘never stood a chance’ failures. But most innovations lie somewhere in between. Most are products that have every chance at success in market if you understand what type of innovation it is (broad appeal versus niche, breakthrough, premium, unconvincing etc.) and, therefore, how best to guide it to market.

So, back to Steve Jobs. His approach was to show people what he believed he knew they wanted, and get their reactions, which is exactly what good research should do.

 

Juice brand Nudie expands into lunchboxes, kids market

Juice company Nudie will launch a new product aimed at children, with the launch of the ‘Kids Nudie’ range.

Sydney-based agency, Jack Watts Currie (JWC), created Nudie 10 years ago and have worked on the new brand’s packaging. The packaging design will includes games, jokes and activities for the kids.

JWC creative director, Colin Watts says, “Nudie packaging has always been seen as a canvas for a bit of fun interaction, as a big kid myself it was about games, trivia, and having to find the hidden nudie creatures! Getting kids to share this fun in the playground will help to positively spread the brand.”

Former Australian netball star, Liz Ellis has been brought in as the new product’s ambassador along with a ‘Nudie blender challenge’ roadshow involving a giant inflatable blender and product sampling. The campaign will also feature a Facebook promotion for mums, and a website aimed at children.

James Ajaka, CEO of Nudie, says, “At Nudie we’re always striving to bring innovative products to the market, that are made from the best ingredients we can find. We are really excited to finally offer parents a ‘Kids Nudie’ range; made with nothing but fruit, with two serves of fruit and no added sugar or preservatives. Three of the flavours are made from 100% Australian fruit, which we are really proud of.”

 

A simple tool for creating ‘out of the box’ ideas

Marketing and product managers often say they need a range of ‘out-of-the-box’ ideas to develop new products and to boost their brand or business.

But how do you create an out of the box idea? Brainstorming for all its popularity rarely produces such an idea. Nor does mind-mapping or other ideation tools. Over a number of years working with marketing teams I developed a tool that any individual or group can use and almost guarantees you will be able to develop big, new ideas at will. In fact, in all my ideation suggestions it is my ‘go to’ starting tool.

It is called the ‘mindset box’ tool.

My insight is this: to generate out-of-the-box ideas you need to know what the box is. When you think about it, this makes perfect sense.

In my language the ‘box’ is your individual and collective mindset. If you can make this mindset explicit then you can stretch or overturn these boundaries. If you do not, you are forever trapped by your mindset and no amount of creative thinking will enable you to break free.

The starting point is to design the mindset box. This consists of making the assumptions, conventions, expectations and experiences of the group or team explicit.

Remember, there is no right or wrong at this stage you are just putting on the table what you and others believe or assume.

For example, a few years ago I worked with the leaders of the number three garbage bag brand in the market. Their brand was under pressure from two larger competitors with bigger budgets and retail support.

‘A’ stands for assumptions and beliefs

In this case one of their key assumptions or beliefs about garbage bags was that it was a low-interest, low-involvement category.

‘C’ stands for conventions

These are the rules of the game that all the brands or players seem to follow. One of the conventions of garbage bags is that it is made of plastic and it is green in colour.

‘E’ stand for experience

Our mutual experiences with garbage bags – in this example I reminded the ideation team of what it was like to put out the garbage. What if it breaks? How might an 80-year-old female living by herself put out the garbage?

The second ‘E’ stands for expectations

What does a user, consumer, customer or retailer expect of this product?

With garbage bags the group had to admit that the retailers expectations for example was very low – perhaps a price promotion from time to time or a ‘two for the price of one’ offer.

 

For most groups and teams that I work with this step is a revelation. For the first time all the assumptions, beliefs, conventions and expectations are explicit. I remember one new packaged goods marketing director, for example, trying to understand why there was such a reluctance to increase pricing. It seems that there was a widespread belief among the group that a certain product had to be priced under $10. When they unpacked this belief it was made some 10 years earlier by another leader and had been passed down as some sort of unstated truth.

But this is the great beauty of the mindset box tool. It helps everyone to transport what is in their head down on a piece of paper for all to see in a safe environment. The other big advantage is that it separates what we know (ie. a fact) from what we believe.

The third step in using the mindset box tool is to try and challenge, stretch or overturn all or some of the As, Cs, Es and Es.

In the garbage bag example, we tried to overturn the idea that garbage bags are a low-interest, low-involvement category. You only have to have a full garbage bag split and spill all over you to realise that garbage bags could be quite engaging. With this in mind I challenged the group to make garbage bags the most exciting product in the world.

This creative challenge eventually led to the development of the deodorised garbage bag. At last there was a breakthrough in the category that excited both consumers and retailers alike.

We also focused on the limitation that garbage bags are only used for garbage (a key assumption). Yet we knew that garbage bags could have multiple uses (just go to an early morning, winter fun run and you see what I mean). Challenging this assumption opened up an entire range of ideas around house storage bags, home moving bags, kids overnight bags etc.

What about garbage bags on wheels as a new idea to make the consumer experience easier and simpler. Or a kid’s version or a bright purple garbage bag? The ideas are endless.

The last step in using this tool is to evaluate all these ideas and develop a short list.

Suddenly the marketing team of the garbage bag brand had a rich array of potentially breakthrough product ideas. The important point is that the garbage bag had not changed but what had changed was how this product was perceived.

The key lesson?

If you want to create an out-of-the-box idea you need to make your mindset box explicit otherwise you are doomed to create new ideas that can only live within the boundaries of your mindset.

The good news is that most of these limitations are not permanent and can be stretched and overturned. The mindset box tool is easily learned and can be applied to almost any situation.

Sometimes the breakthrough ideas are not found in the marketplace but in opening up the limitations of your imagination.

 

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The Monkeys design tie-up furthers adland’s move into owned product revenue

Sydney agency The Monkeys has joined forces with brand and design agency Maud to enter the product development space, furthering the trend of ad agencies becoming owners of consumer brands.

By taking equity in Maud, the agency sets itself up as a multi-discipline brand and design company with the ability to design and market products for itself as well as for clients, similar to competitor Host.

Monkeys CEO Mark Green hinted at plans to sell products of their own. “Brand and product design start long before advertising communications and we love the idea of being able to shape brands in their creation,” Green said. “This will also allow us to create brands that we own ourselves.”

Creative agency Host has made similar moves into the product owner space with its ‘Rainy Days’ department, formed to “pursue creative, commercial opportunities beyond traditional advertising and communication fee-based client relationships,” the agency revealed in an email to Marketing. “We re-purpose the advertising skill set of consumer and market understanding, strategy, creative and production for a different outcome.”

Host’s Olly Taylor told Marketing last year the agency was to launch its first product, an alcohol brand, in early Spring 2012 and was in advanced conversations with two large multinationals about bringing a number of Rainy Day’s initiatives to market locally and internationally.

It’s believed the new capabilities acquired by The Monkeys, which include Maud’s brand identity, product development, customer experience, digital and film experience, will see them move into the space also.

Founder and creative director at Maud, David Park, said, “Our relationship with The Monkeys will allow Maud to achieve a bigger scale and quality of work. The businesses share similar creative beliefs and it’s a very exciting chapter for us.”

The Monkeys’ Justin Drape, Mark Green, Scott Nowell and Fabio Buresti join Park as partners in Maud.

Recent Maud projects include work for The Star, Single Origin Roasters, Tony Ferguson, Diageo, Semi-Permanent and IKEA Australia. In 2012, the designers collected 11 trophies at the Biennale AGDA Awards. It also picked up a Black D&AD Pencil for the ‘Million Project’ in 2010, created with Droga5 New York.

 

Kimberly-Clark partners CSIRO, small business for fight back nappy NPD

Kimberly-Clark Australia will launch a new Huggies nappy product created in a collaborative innovation effort to ward off erosion of market share at the hands of private label brands.

The new product, created in partnership with government research body CSIRO and family-owned textiles company Textor Technologies, introduces a new high-absorbency fabric to the category and represents a move towards open innovation for the multi-national FMCG brand.

Created to provide the extra absorbency required for newborns, Kimberly-Clark hopes the innovation will fortify its market leading position in the $500 million nappy category, which was shaken up when Aldi’s Mamia product entered the market several years ago. Aldi’s product’s lower price point and comparable performance saw many mothers switch away from branded manufacturers.

The ‘3D UltraAbsorb’ layer in the new Huggies Newborn and Infant Nappie is the most revolutionary innovation developed for Huggies so far, Kimberly-Clark general manager of baby and child care, Alison Holland, says.

“This is an innovation so unique that we truly believe it will change the game of what a nappy can deliver. We’ve experienced fantastic results from mums who tested the new nappy, which tells us just how much this innovation will mean to them and their babies,” Holland says.

Funding from CSIRO (Commonwealth Scientific and Industrial Research Organisation) was invested to help develop the material as part of the government body’s ongoing strategy of open innovation and working hand in hand with industry in Australia.

The organisation’s Research in Business (RIB) program is designed to help Australian companies compete locally and abroad through innovation, CSIRO group executive, manufacturing, materials and minerals, Dr Calum Drummond, explains. “Our ongoing partnership with Textor and Kimberly-Clark is an example of the benefits long-term collaboration and engagement in R&D can bring.”

“The project is a perfect example of how the innovation process works by linking researchers, such as CSIRO through the RIB program to small to medium enterprise to develop the concept, then linking in multi-national enterprises so the concept can be taken to market via the multinationals’ supply chains,” director of Textor Technologies Phillip Butler adds.

Insights around the challenges managing the bowel movements of newborn babies sparked the idea for the new product, which seven in 10 test mums said performed better than the old material. It targets first-time mothers – over 40% of the market.

NSW Premier, the Honourable Barry O’Farrell, officially launched the $28 million production line at Kimberly-Clark’s Huggies nappy plant in South West Sydney last month. Due to hit stores in the coming weeks the product will launch with an integrated marketing campaign including TV, print, online, sampling and in store activity encouraging parents to see and feel the difference.

Huggies commanded 68% of the nappy market in January, excluding sales from Aldi, according to Aztec National data.

Product launch – innovation and NPD series Part Four

NPD SERIES ROADMAP
Part One: Necessity is the mother of innovation
Part Two: The big idea
Part Three: Building the product
Part Four: Launch (this article)

 

In the fourth and final instalment of Marketing’s series on innovation and new product development, we take off with the launch phase. But don’t think you can breathe easy now – the new product journey has only just begun.

Long the market leader in the chocolate category, Kraft-owned Cadbury is nevertheless loath to rest on its laurels. It identified an opportunity to reinvigorate the category and play to an emerging trend – a hunger for playfulness, fun and something unexpected. Marvellous Creations, launched in April 2012, was its answer to this opportunity – a block of chocolate made up of curiously shaped pieces and out-of-the-ordinary ingredient combinations.

The product’s launch campaign comprised the usual elements of TVC, outdoor, sampling, digital and PR, as well as swift distribution, with 100% coverage achieved in all Coles and Woolworths stores 48 hours following launch, 100% in independent supermarkets within seven days and 98% in the convenience channel within four weeks.

But to help propel its new product through the clutter, Cadbury went a step further, creating an overarching campaign to tie all of its new product launches together. ‘Joyville’, a ‘magical and mythical land’ where chocolate is made, was created as a new subbrand to embody fun, excitement, surprise and delight.

Executions featuring chocolate makers on roller skates, giant cake mixers churning chocolate and purple playground roundabouts have formed the backbone of the campaign to date. Experiential has The combination of launch initiatives employed resulted in a runaway success for Cadbury. According to sales scan data, many of the Marvellous Creations variants were out of stock after just two months on shelves. The product has since achieved a 10.6% value share of total chocolate blocks and 5.9% of total bars, driving Kraft’s total chocolate share to 51.7% of the market.

For this, the final instalment in Marketing’s innovation and NPD series, we’ll take a look at the challenges faced at the launch stage of the innovation journey.

cadbury marvellous creations

The power of the retailers

The feeling in the market, particularly in FMCG circles, is that the growing power of retailers in Australia has elevated them to be almost as important and difficult to win over as the consumer. With the supermarkets pushing their own lines of private label goods and less likely to stock incremental innovation, brands are at the mercy of the retailers when it comes to getting products to shoppers.

Retailers won’t stock innovation for innovation’s sake anymore, says Lisa McKee, marketing manager for VIVA Towel and Cleaning Products at KimberlyClark. “It’s critically important to be able to demonstrate to retailers that your innovations will add value to their shoppers and therefore their categories… increasingly so. They’re less and less likely to range ‘me too’ innovation.”

Andrew McQuillan, vice president of innovation for Nielsen, Pacific, agrees that it seems increasingly difficult for brands to get new products ranged. “The big challenge for FMCG manufacturers is the strength of the retailers,” says McQuillan. “They’re in a very strong position, and wanting to expand private label that puts pressure on the manufacturers in terms of the space that they’ve got available.”

In order to get shelf space, brands often need to sacrifice some of their existing shelf space for the new products, McQuillan adds.

Susan Massasso, regional marketing director, Asia Pacific at Arnott’s, counts the snack food manufacturer as lucky to have strong relationships with retailers and doesn’t see a threat in them pushing private label. “There is a role for private label in the marketplace, but we’re really fortunate that we have really loved, local brands, and if we do the right thing by our brands for our consumers, they will continue to thrive,” Massasso says.

“If you’re truly growing and nurturing your brand with appropriate and relevant innovation, then the connection is between you and the consumer, and I think we can sometimes get distracted with the role of the retailer or the role of private label… ultimately, I firmly believe Woolworths, Coles and all the other independent retailers want brands to thrive as well.”

Arnott’s sees the relationship with retailers as a partnership. “To see it as a ‘them and us’ relationship I don’t think is particularly productive,” Massasso explains. “They are businesses in themselves. They have their own business needs, just as we have our business needs. So I think to see it as ‘how do we mutually benefit each other?’ is the way we look at it internally.”

Like Arnott’s, Kraft also sees the retailers as partners. Simon Talbot, corporate affairs director for the global FMCG giant, says the three key factors for getting new products ranged is having: a proven track record, a strong partnership with the retailer and a product of genuine value. “Really investing in NPD and not just line extensions – going in there with a truly new product offering that’s compelling is so critical.”

New modes of communication

Changes in consumer behaviour have ushered in a new communications model for brands to follow in order to break through and capture attention. Brands have turned to digital, and are turning to in-store theatre and experiential to generate buzz and stimulate trial.

Josh Gaudry, marketing manager in Lion’s innovation division is seeing a shift in how the food and beverage giant’s brands go to market. “Digital is playing a much bigger role than it ever has, and trying to get our heads around how consumers interact with digital is a really important part.” It’s a tool being used to play to the consumer’s appetite for discovery. “If you allow consumers to discover it for themselves and have a really strong digital plan, which allows them to discover it, they actually do all the heavy lifting for you.”

Integration is the key for Kraft. “You have to know how to pull the levers of advertising, PR and in-store, and work out that particular brands have different paybacks, according to those three or four different communication mediums,” Talbot adds. There has also been a shift to digital for Kraft, but it still sees a lot of value in traditional TVCs, print and outdoor. It’s about identifying the correct placement of your target cohort, Talbot says.

Just because digital is growing doesn’t mean that traditional spend is on the decline. Kimberly-Clark’s McKee points to a lack of traditional media support as one of the key causes of failure. “To get clever product from the shelf can be achieved; however, if you don’t have relevant and meaningful communication to drive their success, it’s very difficult to get people traction.”

The theatre of retail

At Kraft, Talbot’s finding more and more that in-store execution is critically important. “The balance is shifting between above the line and in-store execution.

Mums’ eyes are increasingly more difficult to capture, so we are emphasising in-store theatre. You might get to them at home, but when they walk into that store, my God, they need to be able to see our product or spot it as early as possible.”

Talbot advises early collaboration with retailers to execute consistently across stores. Typically, Kraft executes across the entire nation within 48 hours for new product roll-outs. It also times in-store initiatives around seasonality.

Stage Gate

Once into market, the product has to be nurtured and constantly monitored to ascertain how it’s being received. Scrutiny of sale volume, numbers, costs and margins is required to make sure they’re holding up, says Dr Scott J Edgett, co-founder of Stage-Gate. And tracking of individual customer behaviour is required to see if the product is being adopted after trial.

“We get people to try stuff through advertising and marketing, but encouraging repeat purchase is the real key to a successful launch,” Edgett says.

Historically, Kraft would get to gate five of its StageGate process, launch, get the numbers, give itself a pat on the back and get started on next year’s plans, Talbot reveals. “Only just now are we making [postlaunch] a systematic process in the staging gate. It’s gate six now… it’s what works, what didn’t work, what could we learn from it before we can consider a new creative, a new launch, a new product development, is there something we did or didn’t do correctly?” The same philosophy applies to the creative as well – was there enough time on air, was it sticky enough, was it placed in the correct locations, do we trial it and post it again? Being more reflective and doing that in a systematic way is actually critical,” Talbot adds.

McKee believes there’s no use launching an innovation unless you continue to ensure that innovation is meaningful and meets current needs.

“The pipeline is very important,” she says, referring to an ongoing plan to continually improve and develop a product to make sure it stays relevant.

“It’s continually investing in research, it’s continually listening to comments that come through from your people advisory service, and it’s continuing to look to people needs and how you can either bring new products to market or redesign an existing product to better meet that need.”

The launch phase, a stage on which most organisations have a strong grip, is the culmination of many months of work and often blood, sweat and tears. There are a number of challenges brands have to contend with, such as the power of retailers and new modes of communication. With some in-store theatre and a nimble, iterative approach, the new product can break into consumer consciousness and continue to evolve to maintain ultimate relevance in a fast changing world.

 

Over the course of the past four issues, Marketing has taken you on a journey through the innovation and new product development process, looking at the state of the practice, emerging trends and the challenges faced at the three key stages – ideation, development and launch. Each of these three phases is as important as the other, and for each there is no right or wrong way other than ensuring a structured and disciplined approach.

With a culture that supports innovation and a mentality of agility, open-mindedness and creativity, navigating the road to success and breaking through with truly innovative new products is an achievable goal.

 

Viva wiping

CASE STUDY: VIVA SHOWER FAST WIPES – LAUNCH

Kimberly-Clark’s VIVA Shower Fast Wipes, the innovation journey we have followed throughout this NPD series, was launched with a significant media package. It comprised TV, online, magazine advertising, social media, experiential, in-store sampling and in-store demonstrations. As a new form of cleaning product, Kimberly-Clark ensured it was comprehensive in terms of frequency of exposure to consumers and drove awareness to trial. The in-store demonstrations and extensive sampling activity was undertaken to educate and get consumers trying for themselves. Social media was key also to generate ‘talkability’ and testimonials from consumers.

Very strong uplift aligned with TV activity was found, and this culminated in driving the brand’s performance and hitting the number one bathroom cleaning product within a few months of launch.

Since launching in January 2011, more than one million packs of VIVA Shower Fast Wipes have been sold, generating over $1 million in retail sales value and a 6.5% share of the bathroom cleaning segment.

 

Sodastream fridges on the way in Samsung NPD tie-up

A renewed innovation push from 110-year old company Sodastream will see it co-release a sparkling water dispensing fridge with Samsung this year.

The company, which burst back onto the scene in November with heavy promotion of its redesigned fizzy drink makers, is taking innovation a step further in its bid to move carbonated water production into the home.

Using the water and ice control panel common on two- and four-door fridges, owners can select up to three levels of carbonation for sparkling water, fuelled by a Sodatream cylinder that rests inside the fridge door.

Sodastream calls the product a key milestone in its vision for convenient homemade carbonated beverages without the clutter and waste produced by the pre-packaged beverage industry.

The idea stems from the company’s innovation focus and partnering with the right people, marketing director of Sodastream Australia, Laura Wilson, says. “This stems from our vision to continue to innovate our product – not just the system on the countertop – but how else can we innovate and move it to the next level,” Wilson says. “The alliance with Samsung is one way of doing that, you’ll see more in the coming years.”

The fridge aims to provide convenience for people who already like making their own sparkling water, by taking the dispenser to the next level and giving people sparkling water without the need for a stand-alone unit.

“It’s not just meeting consumer needs but anticipating the future of those consumers,” Wilson adds. “There is an eco story behind it too – if sparkling water is coming straight out of your fridge you’re not buying bottles from the shop and throwing them away.”

The Samsung branded four-door refrigerator will be launch in Australia behind other international markets, but no release date has been announced.

Sodastream was voted one of the world’s top 50 most innovative companies by FastCompany last March.

 

Product awards: FMCGs raise the bar as private label enters innovation race

Australia’s FMCG manufacturers raised the bar on innovation at last night’s Product of the Year awards in the face of increasing consumer caution towards new brands and growing trust and quality of private label offerings.

Hundreds of new supermarket products fought it out across 34 categories for the right to own a Product of Year badge for 2013, in a field which showed innovation returning to a healthy state, according to the award program’s director Sarah Connelly.

“The quality of the products has got significantly better over the past few years,” Connelly told Marketing ahead of the awards dinner in Sydney last night. “This year we’ve got stuff that’s never been seen before… there’s certainly more ‘breakthrough’ innovation.”

The heightened quality of innovation, such as Philips Sonicare Airfloss which took out top honour overall in the awards, come in response to mounting pressure as the supermarket giants start to invest in breakthrough innovations of their own.

“This year we had a lot of entries from private label, which are becoming incredibly innovative in their own right and not necessarily trying to follow but are now paving their own way and make their own brands,” Connelly added, pointing to Woolworths’ Macro wholefood gluten and dairy-free dips and gluten free cookies, as well as two winners from Aldi.

Product of the Year 2013
Overall Product of the Year winner Philips Sonicare Airfloss, and category winners Woolworths’ Macro Wholefoods Market – Free From Dairy Dips and ALDI’s Blackstone – Tortilla Corn Chips.
 

Private label continues to grow its market share through tiered product strategies and more sophisticated packaging mimicking branded products, which is helping to improve perceptions of quality around their offerings.

The study of around 11,600 Australian shoppers behind the awards, conducted this year by Nielsen, found 94% of households have now purchased private label brands.

“Private label is upping its game – the quality is higher, their innovation is better and they’re across a whole lot more categories than they used to be,” Connelly commented. “People are just looking for value and they’re turning to private label products because they’re starting to feel it’s a better quality and generally a better price point.”

Philips Sonicare Airfloss, an alternative flossing similar which make a similar experience to air blast cleaning at the dentist available to the public, took out the overall Product of the Year honour. Other original concepts to win included Vaseline Aloe Fresh SPF Hydrating Lotion, a light body moisturiser that also offers sun protection, Helga’s Thins, a new take on bread and the Queen Chocolate Mill, a chocolate grater.

Several new brands, such as category winners Birch & Waite Stir Fry Sauces range, a preservative-free ready-to-use sauce, and Belvita Breakfast Biscuits from Kraft, which introduces the concept of a breakfast biscuit to Australia, however the focus still remains on extending already existing brand names.

Category winners Kraft’s Belvita Breakfast Biscuits, Queen’s Chocolate Mill and Vaseline’s Aloe Fresh SPF Hydrating Lotion.
 

In the current climate, consumers are trying to save and make smart choices making them more likely to go with names they recognise, Connelly pointed out. “There are a few more new brands coming through, but it’s a lot easier to leverage off an existing brand and people are reticent to try a totally new thing,” she said. “New products from companies consumers know is the safer shopping option and why companies tend to stick with existing brands.”

The awards expanded into small appliances this year — won by Breville’s Fast Slow Cooker which combines the two cooking techniques in one appliance — and plans are on the table to expand into larger whitegood appliance and telecommunications next year.

The full list of winners from the awards includes:

  • SPECIALTY BISCUITS: Belvita Breakfast Biscuits
  • BEVERAGES: Berri – Be By Berri
  • BODY LOTION: Vaseline – Aloe Fresh SPF Hydrating Lotion
  • CHOCOLATE CONFECTIONARY: Cadbury – Dairy Milk Marvellous Creations
  • COOKING & BAKING: Queen – Chocolate Mill
  • DENTAL CARE: Sensodyne – Repair & Protect Toothpaste
  • DENTAL HYGIENE: Philips Sonicare – AirFloss
  • DIPS & DRESSING: Macro Wholefoods Market – Free From Dairy Dips
  • DISHWASHING: Finish – Quantum 20s
  • FEMALE GROOMING: BIC – Soleil Savvy
  • FRESH BAKERY: Helga’s – Sandwich Thins
  • FROZEN DESSERTS: Streets – Blue Ribbon 3in1
  • GENERAL GROCERY: Safcol – Responsibly Fished Tuna
  • GENERAL HOUSEHOLD: Mortein – Automatic Indoor Control System Odourless
  • HAIR CARE: Schwarzkopf Extra Care – Daily Oil Elixir
  • HAIR COLOUR: Schwarzkopf Permanent Colour – Shake It Up Colour Foam
  • HAIR STYLING: Schwarzkopf Extra Care – Instant Volume Powder
  • HEALTH AND WELLBEING: Panadol – Optizorb
  • HOUSEHOLD CLEANING: Vanish Preen – PowerPowder
  • KIDS SNACKS: SPC – Fruit Crush-ups
  • LAUNDRY: Vanish Napisan – PowerShots Gel Caps
  • MALE GROOMING: BIC – Hybrid 4 Advance
  • MALE SKINCARE: Nivea for Men – Q10 Skin Energy Face Wash
  • MILK & DAIRY: Kraft – Cheese Blends
  • PET CARE: VIP Petfoods – Fussy Cat Grain Free+
  • PREPARED MEALS: Woolworths – Ready To… Range
  • SAUCE & CONDIMENTS: Birch & Waite – Stir Fry Sauce Range
  • SAVOURY SNACKS: ALDI Blackstone – Tortilla Corn Chips
  • SEXUAL HEALTH: Durex – Play Perfect Glide Lubricant
  • SKINCARE: Garnier – Dark Spot Corrector
  • SMALL APPLIANCE: Breville – Fast Slow Cooker (BPR200)
  • SMALL GOODS & MEATS: Berg – Ham Value Pack (4x100g)
  • SOUPS: Continental – Cup-a-Soup Sensations
  • SWEET SNACKS: Macro Wholefoods Market – Gluten Free Cookie Bars