art or science (2)

Copyright and intellectual property of: www.dgeconsultancy.co.uk

BRAND DEVELOPMENTBRAND DEVELOPMENT

ArtArt Science Science OR

PresentedPresented by:

David G. ElliottDavid G. ElliottB.A. (Lon) MBA Executive Management (Hull)

MCIM

PresentedPresented by:

David G. ElliottDavid G. ElliottB.A. (Lon) MBA Executive Management (Hull)

MCIM

Copyright and intellectual property of:Copyright and intellectual property of:

www.dgeconsultancy.co.ukwww.dgeconsultancy.co.uk


• Health and Beauty Marketing background: Reckitts, Seven Seas, Dumex.

David G. ElliottDavid G. Elliott

• Consultant since 1994.

• Business & Brand Development.

• Guest lecturer CIM, University of Hull.

• Open Innovation – Reckitt Benckiser, GSK & Boots.


For the purpose of this talk focusing on

New Product Development

For the purpose of this talk focusing on

New Product Development


““The use of The use of skillskill and and imaginationimagination in in the creation of aesthetic objects, the creation of aesthetic objects, environments, or experiences that environments, or experiences that can be shared with others.”can be shared with others.”

ArtArt

Encyclopædia Britannica


True…there’s lots of skill & imagination in NPD…

http://www.premiumbeautynews.com/en/boots-laboratories-launches-the,3924

Technology

Personal CarePersonal Care

http://www.goodhousekeeping.com/product-reviews/innovative-products-awards-2011#slide-1

Household

www.youtube.com/watch?v=9eVCFXxgn2M


ScienceScience ““A systematicA systematic enterprise thatenterprise that builds andbuilds and organisesorganises knowledge inknowledge in the form ofthe form of testable testable explanations andexplanations and predictions.”predictions.”


“86% of NPD fails within one year.”

“86% of NPD fails within one year.”

“The rate of introduction of new brands and brand extensions has fallen by 21 per cent, and their success rate has fallen from one in six to one in seven. The window of opportunity for success is also getting narrower new launches are peaking earlier.”

March 2012

If NPD is a science and is predictable why is it…


What is that the What is that the manufacturers of the manufacturers of the 1 product out of 7 1 product out of 7 that succeeds that succeeds getting right?getting right?

What is that the What is that the manufacturers of the manufacturers of the 1 product out of 7 1 product out of 7 that succeeds that succeeds getting right?getting right??


AThey adopt or develop a strategic approach to achieve a unique expectation that is relevant to their brand, the CONSUMER and the SHOPPER.

They adopt or develop a strategic approach to achieve a unique expectation that is relevant to their brand, the CONSUMER and the SHOPPER.


ProductInnovation &Technology

Strategy for theBusiness

Climate,Culture, Teams& Leadership

Resources:Commitment& Portfolio

Management

Idea-to-LaunchSystem:

Stage-Gate®

Stage-Gate® is a trademark of Product Development Institute Inc.

Business’s NewProduct

Performance

Stage-Gate Matrix Example ®

http://www.stage-gate.com/downloads/Formula for_Success_in_New_Product_Development.pdf


MarketPenetration

ProductDevelopment

MarketDevelopment

Diversification

PRODUCTS

MA

RK

ET

S

Existing New

Ansoff’s Matrix

Ansoff, I.: Strategies for Diversification, Harvard Business Review, Vol. 35 Issue 5, Sep-Oct 1957, pp 113-124

Selling NEW products to EXISTING customersE

xist

ing

New

Selling NEW products to NEW customers

Selling MORE of the SAME to the SAME types of consumer

Selling EXISTING products to NEW types

of consumer


MarketPenetration

ProductDevelopment

MarketDevelopment

Diversification

PRODUCTS

MA

RK

ET

S

Existing New


xist

ing

New




of consumer

Ansoff’s Matrix -

http://businesscasestudies.co.uk/beiersdorf/growing-a-business-by-developing-products-and-markets/conclusion.html


MarketPenetration

ProductDevelopment

MarketDevelopment

Diversification

PRODUCTS

MA

RK

ET

S

Existing New


xist

ing

New




of consumer

Ansoff’s Matrix -

http://www.nurofen.co.uk/heritage.php


HOW?HOW??


How?How?

Cross-functional team

Marketing

Cat-Man

Production

R&D

Creative

Finance

Legal

Research


How?How?Understand Your Market


How?

TARGETS PAIN

INNOVATIVE

EFFECTIVE RELIEF

SUPERIOR QUALITY

PROBLEM SOLVING

REASSURANCE

COMFORTING

STRONG

TASTE FREE

SPEED

PROVEN

SCIENTIFIC

(Nurofen Brand Engram - Shopper Insights 2003)(Nurofen Brand Engram - Shopper Insights 2003)

ADULT

INTELLIGENT

Brand Footprint How?


How?How?Technology Push


How?How?Research

Getting into the mind of the consumer and shopper.

Getting into the mind of the consumer and shopper.


How?How?Research

“New technologies can now pinpoint more precisely which brain regions are active as people respond to products or make brand choices or are exposed to advertisements. The neuroscience dream of being able to peer into the functioning brain has been made possible through technology.

(2007 Dr. Max Sutherland Australian Neuromarketing Symposium)

There are plenty of conventional research methods but we are also at the dawn of a new age:


Consumers and shoppers are smart, sophisticated, promiscuous, dealconscious, cynical of marketing and advertising.

The ‘Experiential’ consumer

• Full-time employment work hours grown from 40 to average to 47 hours (2011 Office of National Statics)

• TV viewing – 25 hours per person per week but challenged by growth in on-line activity• 1 in 3 Households own a computer and use it for 10 hours per week (imrg.org)

• YOY Increase in UK on-line purchasing 2009-10: 22% 2010-11: 16%

2011-12: 13% (imrg.org)

Social Context

Research

• UK debt family debt increased 48% 2011-2012 to £7,944 in unsecured borrowing (The Guardian: Jan 2012)

• Plan more: shopping lists growing (Shopper Insights:18% 2003 to 27% 2011)

• Price sensitivity / deal seeking or switching to deals increasing.• Less loyalty to one brand, growth in repertoire purchasing or doing without.• Frequency of grocery visits increasing. Most visit 3+ stores / retailers regularly.• Average grocery shopping trip in UK down from 44 to 21 minutes.• More health, eco and sustainability aware but product / service has to be affordable.

2010’s ‘CHANGE’ CULTURE: Reviewing and changing our spending habits


Consumer Life-Stage & Events

Research

Life -events

43 prioritised and common life events which

influence consumption and

shopping behaviour.Holmes & Rahe

(Social readjustment Rating Scale)

Maslow’s Hierarchy of Needs(original five-stage model)

© alan chapman 2001-4, based on Maslow’s Hierarchy of Needs.

Self-actualisationpersonal growth and fulfilment

Self-actualisationpersonal growth and fulfilment

Esteem needsachievement, status, responsibility, reputation

Esteem needsachievement, status, responsibility, reputation

Belongingness and Love needsfamily, affection, relationships, work-group, etc

Belongingness and Love needsfamily, affection, relationships, work-group, etc

Safety needsprotection, security, order, law, limits, stability, etc.

Safety needsprotection, security, order, law, limits, stability, etc.

Biological and Physiological needsbasic life needs – air, food, drink, shelter, warmth, sex, sleep, etc.

Biological and Physiological needsbasic life needs – air, food, drink, shelter, warmth, sex, sleep, etc.


Since the 1950’s classical marketing has profiled consumers by attitudes and behaviours to quantify opportunity and target products and communication:

AIO - ‘Activities, Interests & Opinions’ = ‘Psychographics’

Consumer Pyschographics

Research

DemographicsDemographics

PersonalityPersonality

Self-conceptSelf-concept

Consumer BehaviourConsumer Behaviour

Wells, W.D. (1975) Pyschographics: a critical review, Journal of Marketing Research 12

Mehotra, S and Well W.D. (1979) Pyschographics and buyer behaviour: theory and recent empirical findings, Consumer and Industrial Buying Behavior, 49-65.

LifestyleLifestyle


Physiological needs

Buy products and services which allow consumers to function in their day to day lives:

- Food

- Housing

- Transportation

- Clothing

- Information

- Health

Consumer Motivations - Why We Buy

Research


Consumers desire choice because brands and products play roles in their lives which are not just physiological they fulfil psychological needs.

Other motivations of experiential shoppers

FunctionalConsumer Motivations - Why We Buy

Research


‘Experiential Needs’ Products and services which are primarily bought because of feelings they give consumers.

Holbrook and Hirschman (1982) The experiential aspects of consumption, Journal of Consumer Research 9

‘Experiential’ needs

The ‘experiential shopper’ has driven much of the recent expansion and development of retailing globally in the last 10 years.

ResearchConsumer Motivations - Why We Buy


A few examples of experiential environments…A few examples of experiential environments…

Cosmetics CafeCosmetics Cafe Nike Running TrackNike Running Track

HMV Music StationsHMV Music Stations Levi’s – ‘Shrink to Fit’Levi’s – ‘Shrink to Fit’


‘Social’ Brands, products or services that satisfy the need to affect or enhance a consumer’s relationship with other people.

Solomon R (1983) The role of products as social stimuli, Journal of Consumer Research 9

Other motivationsResearchConsumer Motivations - Why We Buy


‘Symbolic’Psychosocial need for consumers to express themselves through the products they buy, regarding possessions as a part of themselves.

Other motivationsResearch

Belk R W (1988) Possessions and the extended self, Journal of Consumer Research 14

Consumer Motivations - Why We Buy


`

‘Hedonic’Products consumed because of their sensory benefits. Hirschman and Holbrook(1982) Hedonic consumption, emerging concepts, methods and propositionsJournal of Marketing 46



`

‘Cognitive’ Products and services that satisfy the need to know.



Retail environments can be immensely complex.

COMPLEXITYCOMPLEXITYShopper Psychology

Research

The average shopper has to navigate their way around the store processing thousands of products, promotions, signs, other shoppers and staff to find and select the few products they want.


Shopper PsychologyResearch

Shoppers are pack focused & have developed low attention cognitive strategies to recognise, recall and pay attention to products of interest and make decisions.


1. Mnemonics: Shoppers look for UNIQUE visual clues in preference to words, often shape and colour.

2. Visual Language: Look for use imagery or symbols in preference to words to illustrate a ‘story’.

PROCESSING PACK DESIGNSPROCESSING PACK DESIGNS

Subconscious interaction

SUBCONSCIOUS PROCESSING OF PACKAGING DESIGN MINIMISES THE TIME AND EFFORT INVOLVED IN DECISION MAKING.



• They use core visual mnemonics (CVM) to trigger recognition, recall & decision-making. This is called the ‘Recognition Heuristic’. The CVM not only is a recognition tool it also provides reassurance.

(Shopper Insights 2003)(Shopper Insights 2003)

Nurofen

In recognition and recall tests 94% of respondents recognised Nurofen from its core visual mnemonic (CVM).



How?

TARGETS PAIN

INNOVATIVE

EFFECTIVE RELIEF

SUPERIOR QUALITY

PROBLEM SOLVING

REASSURANCE

COMFORTING

STRONG

TASTE FREE

SPEED

PROVEN

SCIENTIFIC

(Nurofen Brand (Nurofen Brand Engram Research - Engram Research - Shopper Insights Shopper Insights 2003)2003)

ADULT

INTELLIGENT


CVM triggers Brand Engram...


How?How?Channel or Channels


How?

Retailers are a market, just as consumers are. It is important they are considered at the START and not the end of the NPD process.

Retailers see themselves as channels of DEVELOPMENT & COMMUNICATION and as well as distribution.

They have limited shelf space from which they must maximise profit – if your new product takes space who is to be delisted?

Where is your product to be located?

Retailers have there own customer profiles - who will buy your new product?

How?Retailer Needs


How?Timing


If NPD is a SCIENCE of doing something NEW,

then ART is in doing it well!

If NPD is a SCIENCE of doing something NEW,

then ART is in doing it well!



BRAND DEVELOPMENTBRAND DEVELOPMENT


Thank YouThank YouDavid G. ElliottDavid G. Elliott

B.A. (Lon) MBA Executive Management (Hull)

MCIM

Thank YouThank YouDavid G. ElliottDavid G. Elliott

B.A. (Lon) MBA Executive Management (Hull)

MCIM

Copyright and intellectual property of:Copyright and intellectual property of:

www.dgeconsultancy.co.ukwww.dgeconsultancy.co.uk

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