Eric Meyer - Replacing the Innovation Funnel


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Eric Meyer - Replacing the Innovation Funnel

  1. 1. Replacing the Innovation Funnel Eric Meyer Director of Insights and Innovation Sunny Delight Beverage Co.
  2. 2. Agenda <ul><ul><li>Current Innovation Funnel </li></ul></ul><ul><ul><li>Consumer Segmentations </li></ul></ul><ul><ul><ul><ul><li>Demographic </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Psychographic </li></ul></ul></ul></ul><ul><ul><ul><ul><li>Organoleptic </li></ul></ul></ul></ul><ul><li>Consumer Directed Development Tunnel </li></ul><ul><ul><li>“ Who” Immersion </li></ul></ul><ul><ul><li>Proposition Building Blocks </li></ul></ul><ul><ul><li>Proposition Development </li></ul></ul>
  3. 3. Current Innovation Funnel
  4. 4. The New Product Challenge <ul><li>In 2008 * … </li></ul><ul><li>122,743 new products introduced in the U.S. </li></ul><ul><li>0.2% achieved more than $10 million in retail sales </li></ul><ul><ul><li>Most new items were new sizes, flavors, packaging, health claim line extensions of existing brands </li></ul></ul><ul><ul><li>In many cases, package size was reduced to avoid price increases </li></ul></ul><ul><li>Of the top 100 new items, 98 items were extensions of existing brands </li></ul>* New Product Introduction The Nielsen Co., January ‘09
  5. 5. Top 10 New Items Introduced in 2008 <ul><li>New Brands $ Volume </li></ul><ul><li>Zyrtec $208 MM </li></ul><ul><li>Bud Light Lime $110 MM </li></ul><ul><li>Gatorade Tiger $61 MM </li></ul><ul><li>Zyrtec-D $49 MM </li></ul><ul><li>Keebler Townhouse Flip Sides $43 MM </li></ul><ul><li>Children’s Zyrtec $36 MM </li></ul><ul><li>Tide Total Care - Detergent $30 MM </li></ul><ul><li>POWERade Zero $27 MM </li></ul><ul><li>PediPaws Pet Nail Trimmer $27 MM </li></ul><ul><li>Gillette Venus Embrace Razor $25 MM </li></ul>Source: Nielsen Strategic Planner, 52 Weeks Ending 12/27/08, Total U.S. Grocery/Drug/Mass excluding Wal-Mart
  6. 6. Cooper Stage Gate Industry Innovation Model 2 4 8 3 6 12 5 10 20 = 10 $100M = 20 $50M = 40 $25M Tests Projects Concepts Winners 1 2 4 For going $100M increase in sales, you need … Source: R. G. Cooper – Winning at new products Data from PDMA, NPD Survey Ideas Innovation Funnel Total Pipeline
  7. 7. Make the Funnel More of a Tunnel Future State Consumer Driven Internally Informed Ideas Results Current State Internally Driven Consumer Informed Innovation Strategy Prioritization
  8. 8. SDBC Innovation Model <ul><li>Consumers create the total proposition, team provides informed stimuli </li></ul><ul><li>Innovation process </li></ul><ul><ul><li>Clarifies the “fuzzy front end” of innovation </li></ul></ul><ul><ul><li>Achieves speed to market by concurrent, holistic proposition development </li></ul></ul><ul><ul><li>Delivers results efficiently by increasing the odds of new product success </li></ul></ul>Segmentation “ Who” Immersion Team Synthesis Rapid Prototyping Consumer Synthesis “ What” Immersion Team Synthesis Rapid Prototyping Consumer Synthesis
  9. 9. Consumer Segmentation Demographic Psychographic Organoleptic
  10. 10. Demographic Segmentation <ul><li>Oldest form of consumer segmentation, not very exciting, but still practical in the right context </li></ul><ul><ul><li>Age </li></ul></ul><ul><ul><li>Gender </li></ul></ul><ul><ul><li>Ethnicity </li></ul></ul><ul><ul><li>Income </li></ul></ul><ul><ul><li>Geographic </li></ul></ul><ul><ul><li>Life Stage </li></ul></ul><ul><li>Focus can be narrowed by combinations </li></ul><ul><ul><li>Un-acculturated Hispanic mom’s w/ Children ages 8-12 </li></ul></ul>
  11. 11. Psychographic Segmentation <ul><li>Separates consumers based on attitudes and behaviors to go beyond simple demographics </li></ul><ul><li>Describes key areas where people in each segment are statistically different from others </li></ul><ul><ul><li>General attitudes, e.g. Like to try new things </li></ul></ul><ul><ul><li>Category specific attitudes, e.g. Nutrition </li></ul></ul><ul><ul><li>Constraints, e.g. Perceived disposable income </li></ul></ul><ul><li>Deliver initial insights to the brand regarding: </li></ul><ul><ul><li>Purchase motivators </li></ul></ul><ul><ul><li>Product benefits to meet consumer needs </li></ul></ul><ul><ul><li>Branding and brand positioning </li></ul></ul><ul><ul><li>Communication with target consumers </li></ul></ul>Hypothetical Segment Dimensions Financial Constraint Time Constraint Lunch Dinner Snack Attitudes Resources Situations Nutrition Value Status (teens) Function Breakfast No Constraints
  12. 12. Organoleptic Segmentation <ul><li>Separates consumers based on product usage preferences to go beyond simple demographics </li></ul><ul><li>Defines key product attributes that drive in-use liking for different segments </li></ul><ul><ul><li>Differences set target product formulas that differentiate brands or product lines </li></ul></ul><ul><li>Identifies key areas of unmet needs and points of difference vs. competition </li></ul>
  13. 13. Segmentation Summary Secondary Research General Primary Research Segmented Primary Research Examples Industry reports Store data Panel data Ethnographic Focus groups Surveys Ethnographic Focus groups Surveys Best Use Acquisition Global Expansion Competitive learning Informing segment research NPD 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
  14. 14. Segmentation Summary <ul><li>Segmentation brings clarity to the “fuzzy front end” and eliminates pursuing off target projects </li></ul>Tests Projects Concepts Winners Ideas Innovation Funnel
  15. 15. Consumer Directed Development <ul><ul><li>“ Who” Immersion </li></ul></ul><ul><ul><li>Proposition Building Blocks </li></ul></ul><ul><ul><li>Proposition Development </li></ul></ul>
  16. 16. Case Study <ul><li>The “Who” immersion </li></ul><ul><ul><li>Day in the life research </li></ul></ul><ul><li>Proposition building blocks </li></ul><ul><ul><li>Team ClaimStorm TM </li></ul></ul><ul><ul><ul><li>Concept fragments </li></ul></ul></ul><ul><ul><li>Team ProtoStorm TM </li></ul></ul><ul><ul><ul><li>Product/Package starters </li></ul></ul></ul><ul><li>Proposition development </li></ul><ul><ul><li>Consumer Synthesis </li></ul></ul><ul><ul><li>Field work </li></ul></ul><ul><ul><li>Holistic ProtoStorm TM </li></ul></ul><ul><ul><li>Consumer Shepparding </li></ul></ul><ul><ul><ul><li>Proposition optimization </li></ul></ul></ul>
  17. 17. The Team Marketing Market Research Product Dev. Package Dev. Sales Ad Agency Graphics Agency Finance Flavor House Bottle Supplier Research Agency The Bosses Industry leading Hispanic branding The Latino Ideas Company Conill
  18. 18. Day in the Life
  19. 19. “ Who” Deep Dive Conclusions <ul><li>Focus on the functional benefit area of combining taste with nutrition </li></ul><ul><li>Focus on the emotional benefit between Moms and their children </li></ul><ul><li>Six product opportunities identified </li></ul><ul><ul><li>Some current consumers were using a food processer to make carrot juice and serving it mixed with SunnyD! </li></ul></ul>
  20. 20. Concept Fragment ClaimStorming TM <ul><li>Benefit and Reason to Believe Statements </li></ul><ul><li>Gold Standard product prototypes </li></ul>Orange Carrot Consumer Synthesis <ul><li>Storytelling (collage) </li></ul><ul><ul><li>Talk through the title, pictures/words/thoughts and feelings </li></ul></ul><ul><li>Concept Fragments </li></ul><ul><ul><li>Share the potential Sunny D statements and discuss the reasons for their reactions. </li></ul></ul><ul><ul><li>What are the key benefits you and your family get from preparing & drinking? </li></ul></ul><ul><li>Taste prototype products </li></ul><ul><ul><li>Initial reactions? What do they like about the prototype? What needs to be changes/improved? </li></ul></ul>Product ProtoStorming TM
  21. 21. Intermission to Helicopter Up <ul><li>Minimal initiative specific time spent, scope narrowed to 3 ideas </li></ul><ul><ul><li>One vector DOA </li></ul></ul><ul><ul><li>One vector off brand strategy </li></ul></ul><ul><ul><li>Two other vectors combine </li></ul></ul><ul><li>What remains is soundly based in emotional/functional needs </li></ul>Tests Projects Concepts Winners Ideas Innovation Funnel
  22. 22. “ What” Immersion - Field Work <ul><li>Home visits </li></ul><ul><ul><li>Hand picked consumers from the Consumer Synthesis Groups </li></ul></ul><ul><li>Shop-alongs </li></ul><ul><ul><li>Go directly to her store from her house </li></ul></ul><ul><ul><li>Shop through her eyes </li></ul></ul>
  23. 23. Another Helicopter Up <ul><li>Team has internalized First Moment of Truth shopping habits & purchase drivers maximizing point of purchase trial potential </li></ul><ul><li>Team has internalized Second Moment of Truth product & packaging requirements maximizing repurchase potential </li></ul>Tests Projects Concepts Winners Ideas Innovation Funnel
  24. 24. New SunnyD Orange Carrot A sunny combination of taste and nutrition <ul><li>Accepted Consumer Belief </li></ul><ul><li>Benefit </li></ul><ul><li>Reason to believe </li></ul>F Holistic ClaimStorming TM New SunnyD Orange Carrot Homemade taste with SunnyD convenience G New SunnyD Orange Carrot A better alternative to sodas that your family will love. H Accepted Consumer Belief Benefit Reason to believe Accepted Consumer Belief Benefit Reason to believe
  25. 25. <ul><li>Graphics execution </li></ul>Holistic ProtoStorming TM <ul><li>Package size </li></ul><ul><ul><li>Live samples to hold and pour </li></ul></ul>
  26. 26. <ul><li>Product </li></ul><ul><ul><li>Live samples to see and taste </li></ul></ul><ul><ul><ul><li>Color </li></ul></ul></ul><ul><ul><ul><li>Thickness </li></ul></ul></ul><ul><ul><ul><li>Sweet/sour balance </li></ul></ul></ul><ul><ul><ul><li>Flavor intensity </li></ul></ul></ul><ul><ul><ul><li>Orange to carrot ratio </li></ul></ul></ul>Holistic ProtoStorming TM
  27. 27. Consumer Synthesis
  28. 28. <ul><li>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 preparaci ón. </li></ul><ul><li>  </li></ul><ul><li>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. </li></ul><ul><li>  </li></ul><ul><li>Nuevo SunnyD Naranja-Zanahoria es una combinaci ón 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. </li></ul><ul><li>  </li></ul><ul><li>Puedes encontrar el nuevo SunnyD Naranja- Zanahoria en la sección refrigerada de tu supermercado, junto con otros productos de SunnyD. </li></ul>Nuevo SunnyD Naranja-Zanahoria Sabor casero con la comodidad de SunnyD Optimized Proposition
  29. 29. SDBC Innovation Model <ul><li>Consumers create the total proposition, team provides informed stimuli </li></ul>Segmentation “ Who” Immersion Team Synthesis Rapid Prototyping Consumer Synthesis “ What” Immersion Team Synthesis Rapid Prototyping Consumer Synthesis
  30. 30. Innovation Tunnel Summary <ul><li>Picking, and becoming intimate with, a focused segment surfaces unique, high potential opportunity areas </li></ul><ul><li>First and Second Moment of Truth field research informs execution details to maximize trial and repeat purchase </li></ul><ul><li>Focusing team ideation on proposition fragments, versus brainstorming to find the answer, allows consumers to construct the ideal solution </li></ul>Test Project Concept Winner Idea Innovation Tunnel