managing innovation with innovative research

© Skuuber, LLC 2010-11

Igniting the Experiential Value Proposition


About Us

• BrandHeat™ is a collaboration between innovative marketers and market researchers– Skuuber, LLC– Optimization Group, Inc.

• Our mission is Intelligent Innovation--- supporting breakthrough ideas with breakthrough research, all the while grounded in practical market realities

• We recognize and serve the need of clients to ignite a passionate enthusiasm behind their brands, products and ideas


A Recent Winner!


Optimization Group is a marketing analytics firm that uses many advanced tools and techniques….

Traditional and on-line focus groups Traditional survey services (CATI and on-line) Text mining analytics Geographical Information Systems (GIS) Conjoint (trade-off) analysis Data mining and modeling Dashboard analytics


Skuuber, LLC is a marketing consultancy dedicated to mold-breaking innovation grounded in commercial realities

Product development Branding & identity systems Message management Strategic sales promotion Product management tools Competitive response solutions


Our People

– Technology “Automate and systematize complex data sets”

• Systems analysts• Programmers• Database designers• Process engineers

– Marketing “Make data and analyses work in the real world”

• Marketing research & consulting• Corporate brand management• Agency account service• Marketing & media database (applications focus)

Our people come from two worlds:


Some of our Clients

http://www.asq.org/index.html

http://www.kimballcorp.com/


Our Global Experience• US• Canada• Brazil• Mexico• UK• France • Spain• Poland • Italy• Germany• India• China• Australia• South Korea• Japan


Bio: Jeff Ewald

26+ years research experience

Founder and CEO of Optimization Group

Product management and research experience with General Mills and Campbell’s Soup

Consultant on Volumetric Forecasting to major CPG firm

Research, account management and GM of J. Walter Thompson, Detroit

B.A. in Music from Indiana University

M.B.A. from The University of Michigan


Bio: Rick Hill 30+ years consumer marketing leadership

Founder & CEO Skuuber, LLC

Brand management excellence with General Mills; PepsiCo/Pizza Hut; Popeyes; Barq’s, Inc.; TRIARC/Royal Crown; National Beverage Corp.; Hewlett-Packard Co.; SABMiller

A.B. in Economics from Cornell University

M.B.A. from Wharton Graduate Division, University of Pennsylvania


Select Awards

• The American Marketing Association Award for Advertising Effectiveness (“EFFIE”)

• PMA Super Reggie Award

• Ad Age Top 100 Marketer

• BRAMMY Award

• CLIO Finalist

• Advertising Research Foundation’s David Ogilvy Award for Research Excellence, 1994

• AME International Award for Advertising and Marketing Effectiveness, 1995

• ESOMAR’s John and Mary Goodyear Award for Best Paper Likely to Make an Impact in Marketing, 2001

• Lawrence Technological University/Grant Thornton Leaders & Innovators Award, 2008

• Advertising Research Foundation’s David Ogilvy Award for Research Excellence, Grand Ogilvy Award, 2010


Select Publications

• Moskowitz, H.R., and Ewald, J. (2001). “Always On – Bringing market research down to the development engineer, closer to the customer, and into the vortex of product development.”” Proceedings of the ESOMAR Congress, Rome.

– (Received Gold Award for Best Paper Likely to Make an Impact in Marketing)

• Hartmann, J., Moskowitz and Ewald (2003). “From Multi-country Concept Testing/Optimization to Corporate Database and Beyond.” Global Cross Industry Forum.

• Moskowitz, H.R., Itty, Fink and Ewald (2003). “Deconstructing Automobile Messaging: Clues to Brand Strategy.” The Journal of Database Marketing, 10:3, pp. 200-218.

• Moskowitz, H.R., Itty and Ewald (2003). “Teens on the Internet – Commercial Applications of a Deconstructive Analysis of ‘Teen Zine’ Features.” Journal of Consumer Behaviour, 2:3, pp. 296 – 310.

• Moore, P., Moskowitz, Rabino and Ewald (2005), “’Quali-Quant’ Research at the Development Stage: Using Iterative, Small-Scale Conjoint Analysis to Explore/Refine Communications for a ‘New Age’ Car Dealer,” Innovative Marketing, 1:2, pp. 89-105.

• Beckley, J. Foley, Topp, Huang, Prinyawiwatul, ed. (2007). Accelerating New Food Product Design and Development. Blackwell Publishing. Contributing author: Ewald and Moskowitz, “Market Forces: The Push-Pull of Marketing and Advertising in the New Product Business,” pp. 103-122.

• Moskowitz, H.R., Saguay and Straus (2009). An Integrated Approach to New Food Product Development. CRC Press, Taylor and Francis Group. Contributing author: Ewald, “Chapter 22: Getting The Positioning Right: Advertising Planning.” pp. 387-399.

• Hill, Richard E (2011) “Why Traditional Concept Testing Doesn’t Work”. Ezinearticles.com.


The Product Eco System: tradeoffs & interdependencies define products and go-to-market strategies

• Brand• Uniqueness• Value• Price• Size/Contents• Ingredients• Form factor• Value proposition• Performance• Substitutability


• Strong brands are built by and tethered to iconic products

• Brands live and die at the product level

• Product usage is the brand experience --- and that experience defines the brand

Great brands are built by Great products…not the other way around


What matters

• A brand is no more than the culmination of a user’s experience with it; directly or inferred; good and bad

• Brands win because of what they ARE, not what they WERE– Yet, brands ARE different things to different consumers, just as they WERE

different things– Nostalgia has a role, but seldom a defining one

• Heritage, reputation and tradition are important differentiators, but must be used as stepping stones in evolutionary progress• Hyundai• Domino’s Pizza• Chevrolet


Turning up the heat

• The best way to develop a brand is by understanding---and then driving---positive experiential uniqueness, cultural and emotional connections to certain enthusiastic consumers…and finding more like them

• Find the smoke & you find the fire


Choosing vs. Using

• Simply encouraging purchase is not enough. • The unfortunate curse that's befallen some brands is that they

are "cupboard captives"--owned but not used.• Dr. Pepper’s “10, 2 & 4”

• Great brands create & drive new experiences with them.– Arm & Hammer Baking Soda– iPod > iPhone > iPad– Cheerios– Toyota Prius– Starbucks– Best Buy Geek Squad– Costco


Using

• A series of studies showed homemakers a series of advertisements for canned soup, cranberry sauce, and gelatin. – The "choosing" soup ad touted soup as hot and nutritious;– the "using" ad described soup as a hot and nutritious option

for a snack. – The "using" ads increased the amount used by an average of

73%• Positioning a brand as a substitute for products in other

categories .– Encourage consumers to eat Philadelphia cream cheese

instead of butter on bread; to eat Special K breakfast cereal instead of cookies in the afternoon; to serve Wheat Thins instead of potato chips and peanuts as a snack


Packaging

• More than a container; an integral part of the brand itself.– A brand’s tangible self– The conduit for usage– A product in its own right

• Packaging must promote usage; win the ease-of-use battle with competitors, be environmentally responsible.– Size, resealable, portion control, reusability, green


Emotional Connections

• The most significant characteristics that separate one brand from another may not be the most obvious ones.– Understanding the deeper meanings of brands to the people who use them

• Discovery of the underlying emotional, or higher-order, attributes of the Subject Brand is the gateway to discovering and enabling the experiential value proposition.


Good ideas become great ideas when they are stimulated, supported and sold-in by credible data

Research is a process of discovery and enlightenment.The best use techniques that:• Are themselves innovative & proprietary• Stimulate advanced thinking/envelope-stretching• Are grounded in commercial realities• Offer Go-to-Market insight• Confidently support bold initiatives


Data Collection Challenges

When you ask a rational persona rational question,

you’ll get a rational answer.Key issues:

Question framing Subconscious bias to help

Subconscious bias NOT to look stupidGroup think


Framing the Question

• To understand a person, we are told to “listen”• To gain a better understanding, we are told to

ask questions• But answering a question changes the

relationship with the respondent– Most of the time, respondents think “what types of

answers will fit the question?” – Therefore a question GUIDES (Frames) the answer

• Can’t find out answers to questions you don’t ask• In closed-end surveys, you can’t get answers you

haven’t pre-defined


Bias to “Help”

The “classic” Def/prob question: – Please indicate your interest (intent) in purchasing the above Cake

Mix the next time you’re in the market for a cake mix.

• Definitely would buy• Probably would buy• Neutral (not sure)• Probably would not buy• Definitely would not buy

Typical Response Pattern

30%

40%

15%10%

5%

Def Yes Prob Yes Neutral Prob Not Def Not

%

Typical Response Pattern

30%

40%

15%10%

5%

Def Yes Prob Yes Neutral Prob Not Def Not

%


Bias to “Help”

Stated Response

Common Interp

"Enlightened" Interp

Def Yes 30% 30% 1.0 x DefProb Yes 40% 40% 0.5 x ProbNeutral 15%Prob Not 10%Def Not 5%

70% 50%

Stated Response

Common Interp

"Enlightened" Interp

Def Yes 30% 30% 1.0 x DefProb Yes 40% 40% 0.5 x ProbNeutral 15%Prob Not 10%Def Not 5%

70% 50%

Categ Specific

Calibration Factor

Adjusted Response

0.26 7.8%0.18 7.2%0.10 1.5%0.15 1.5%0.03 0.2%

18%

Categ Specific

Calibration Factor

Adjusted Response

0.26 7.8%0.18 7.2%0.10 1.5%0.15 1.5%0.03 0.2%

18%

• Model calibration can adjust for overstatement … but only practical for select questions with dependent variable measures

• What about the other questions?


“Cutting Edge” Data Collection

Principles for both quantitative and qualitative approaches:

• Avoid asking “questions”• Develop situations to measure responses• Engage respondents in scenarios• Psychiatric interviewing techniques

• Avoid “Group Think”• Anchor individual opinions – engage in safe debate

• Avoid bias for Rational answers• Projective techniques


Our tool kit for innovators

• Increasingly granular levels of consumer insight made possible using a menu of options:

– NAB: Needs, Attitudes & Behaviors– brandDelphi™: value proposition discovery– IdeaMap: value proposition optimization– GMAX: Go-to-Market variables optimization– Skuuber®: product optimization at the SKU level


NAB: Needs, Attitudes, Behaviors

• A NAB study is a survey designed to uncover insights on three critical aspects of how consumers relate to a product:

– NEEDS: How does a product/brand fulfill against basic category needs? How does it fit into their life? What unmet needs may exist?

– ATTITUDES: What do consumers know and think about a product/brand? What perceptual and personality attributes are most closely associated with a brand?

– BEHAVIORS: How do consumers actually shop for and use the product/brand? Are there special types of usage situations? Is the brand pantry-loaded, or targeted for immediate consumption?

• Screening (N= 500-600 consumer users)– Awareness and familiarity with a list of brands

• Quota of n=150 for Subject Brand users• N=350 for other, competitive, sell-against brands• Subset N=100 of known priority targets (optional)


brandDelphi™ Value Proposition Discovery

• Online idea generation tool which collects and analyzes consumers’ actual verbatim comments in response to thought-provoking scenarios. – These scenarios will be crafted to elicit how consumers see Subject

Brand’s total value proposition relative to key competitor brands. – In addition, we will probe for unmet needs … what consumers would

like to see as their Subject Brand category experience.


brandDelphi™ Value Proposition Discovery • Study respondents will select and rate ideas generated by other

participants; • Scoring algorithms allow the most relevant and important ideas to

be identified. • The output from the brandDelphi™ study will be used to inform

development of strategic, consumer-focused positioning alternatives, as well as to identify tactical opportunities for improvement of operations, merchandising, etc. as suggested by consumers.


IdeaMap® Value Proposition Optimization • A methodology rooted in decision based

conjoint…or trade-off… analysis. – Unlike standard surveys, which ask respondents to

answer questions and rate various attributes in the abstract, IdeaMap® presents a series of concepts (developed in a rigorous experimental design) to the respondent and measures a single reaction to each gestalt/whole concept.

– The method falls into a class of experiments known as Rule Developing Experimentation (RDE).

• IdeaMap®’s underlying experimental design permits conclusions of causality – not just simple correlation.


IdeaMap® Value Proposition Optimization

• Messages are typically framed into between 4 and 6 “categories” or groupings, testing alternative expressions for each category. Example categories follow:– Brand name– Positioning– Experience descriptors– Merchandising ideas suggested from Phase 1– Loyalty program attributes– Call-to-action statements


Two Outputs:1. The constant

2. Element scores

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How to Read the Data

• The constant is the percentage of consumers interested in the basic idea (based on top-3-box interest scores)

• The element scores: represent the extent to which a specific idea (sound bite, visual, etc.) adds or subtracts from interest

– Consumers are turned on by motivators

– Consumers are turned off by inhibitors



What the Data Delivers

• Which “Hot Buttons” optimize the value proposition– Uncovers what to say AND how to say it

• Reveals basic level of interest in the basic idea (the constant score)

• Allows us to rank each contributing element according to its overall contribution to interest



Compile data set of Dependent variable (e.g. sales velocity, visits) Independent variables (e.g. marketing spend, # skus, #displays)

Analyze:– Relationships between variables and dependent variable – Impact of factors on dependent variable– Looking for convergence – same findings/patterns found via

different analyses Develop/examine genetic programming models

• ALL variables• Marketing activity variables only

Develop structural equation models• Integrating the learning into a “systems view”

GMAX: Go-to-Market variables optimization

© Skuuber, LLC 2010-11 40

Uses genetic computer programming to solve problems without being explicitly programmed. The computer applies hundreds of statistical techniques – building conclusions from those that are determined to have the “best fit”.

In the explanation of genetic modeling above, we mentioned

“unrelated sets of information”. Here’s a good example of what we mean – for a client with frequent product innovations, we were asked to analyze the effectiveness of launch marketing investment among direct mail, online adverting, catalogs, print advertising, and pricing. The datasets generally are not comparable. But by using GMAX, our Genetic Modeling tool, we are able to take the guesswork out of media innovation. We are able to conclude which combination of media would be the best investment

GMAX: Go-to-Market variables optimization


Skuuber®: product optimization at the SKU level

Overview• Objective demand certification

– Like an SAT Score for consumer products

• Evaluates concepts as executions– Avoids translation losses

• Predictive modeling of initial retail sales– Survey 500 US GenPop consumers – Demand modeling– Comprehensive diagnostics

• DIY web application www.skuuber.com


Skuuber®: product optimization at the SKU level

Diagnostic deliverables– Skuuber Score™ projection of retail volume potential – Household trial estimates: category users & non-users – Price elasticity of demand – Demographic trial intensities – Channel management options – Uniqueness ratings – Price/value ratings – Purchase driver ratings – Needs-improvement ratings


Tool Kit Applications• New product development• New services development• New business

development• Branding• Positioning• Competitive benchmarking• ROMI• Messaging

• GtM optimization• Category development• Market sizing• Key Success Factors• White Space ID• Validation/Proof of

Concept• More…


Benefits

• Modular, adaptive methodologies to support all stages of innovation from conceptualization through actualization

• Designed to stimulate, not audit, the generation of ideas• Reflects how the market decides, not just how it thinks• Takes a commercially practical view• Breaks big ideas into their most valuable components• Provides support and confidence for breakthrough

thinking


Contact

• Rick Hill, Founder & CEO Skuuber, LLC– 877-823-7758– Email [email protected]

• Jeff Ewald, Founder & CEO Optimization Group– 248-459-1194– Email [email protected]

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