Winning through innovation v3


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Examples of innovation in marketing, product & service.

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Winning through innovation v3

  2. 2. • “Innovation is not another name for creativity.” • “Innovation is not another name for Invention.” • “Innovation is not an accident.” • “Innovation is not continuous improvement.” In today’s context, innovation is about the creation of new economic value with breakthrough ideas that will be widely adopted And very simply, Innovation is where people switch to use a new product or switch to a new practice Innovate to survive! “Logic will get you from A to B; Imagination will get you everywhere” Albert Einstein
  3. 3. 4Source : Nielsen 360 degree on consumer But…it’s not easy
  4. 4. 5 Source : Nielsen 360 degree on consumer Is India set up for innovation?
  5. 5. Their Innovation Stories…
  6. 6. Cadbury’s ‘sweet’ story ‘Reframing the opportunity’  Cadbury was always the market leader in India in the chocolates space (commanding close to 70% share). Being the undisputed leader, Cadbury was faced with the challenge of growing the category.  The Indian sweets (mithai) market is almost 15-20K cr(1) in size and is unorganized – a lucrative opportunity to associate chocolates with traditional occasions.  Cadbury’s challenge was 2 fold:  Drive more occasions of consumption & expand the category  Move away from a ‘kids only’ confectionary and target all age groups. (1) Source: Financial Express
  7. 7. Evolution of Cadbury’s communication A seamless transition from consumer-focus to occasion-focus Source: Cadbury India website
  8. 8. 1994 - 2001 – “Real Taste of Life” The TG was no Longer limited to kids. It was about every age group of life. 2001 – “Khanewalon ko khane ka bahana chahiye” Widen chocolate consumption among the masses - ‘cadbury for everybody’ 2006– Pappu Pass Ho Gaya Celebrating happiness in both small and big things in life 2006 – Miss Palampur Extended the celebratory proposition to rural parts of India 2008 – Kuch Meetha Ho Jaye A radical shift in CDM’s positioning as a substitute for traditional sweets. 2011– Khaane ke baad kuch meetha ho jaye Driving more occasions by targeting the habit of having desserts after meals 2013 – Shubh Aarambh Targeting more occasions of traditional sweets consumption before starting any auspicious work Since 2006, Cadbury has been persistently targeting traditional sweets occasions
  9. 9. Sweet Results Cadbury in India almost doubled the business in three years. Sales growth was 22% - the compounded growth rate over the past three years from 2005 to 2008. In the years from 2005 to 2009, it also doubled its turnover. Source: Winning through identifying new territories Cadbury was successful in identifying an occasion & building a connect with the brand in order to take on the lucrative traditional sweets segment.
  10. 10. Nespresso Business model innovation  Nestle believed that coffee-lovers around the globe should be able to enjoy a hot cup of espresso anytime, anywhere  Nestle then spent 12 years on product development – focusing on design, simplicity , identifying the right manufacturing partner before launching the first Nespresso machine in 1986.  Nespresso created a ‘closed’ system where special Nespresso capsules are only available through an online portal called the ‘Nespresso Club’ (launched in 1998)  Annual sales are now reported to be around $2 billion (Johnnie Walker approximately $1,5 billion) with sales growth continuing at around 30% per annum.
  11. 11. Nespresso Boutiques Extending proposition to unique consumer experiences  In 2000, Nespresso set up its first Nespresso boutique in Paris , France.  Responding to three basic principles of service, time management, and personalization, the boutique concept has become a real service platform.  The interior of boutiques is organized into various experiential zones.  The boutique concept promotes the right balance between the art of coffee experiences and retail.  At present, there are close to 300 Nespresso boutiques across the globe. Winning through excellence in product integration Nespresso’s business model focused on what it calls the perfect trilogy of ‘capsule, machine and club’.
  12. 12. Technology connects; Creativity stirs; Passion inspires “ “
  13. 13. Apple’s I-pod Design & Service Innovation  In the late 90’s, there was a shift in the delivery of music in favor of digital MP3s.  In 1998, South Korea’s SIS introduced the first digital MP3 player which sold 50K units in the first year. By 2011, there were ~50 MP3 brands – nowhere close to enjoying the level of success like Sony Walkman  Apple identified and solved major problems with existing MP3 players - size, storage capacity, user interface & absence of a virtual store.  The I-pod was launched in 2001, 3 years after the first MP3 player hit the market  Apple succeeded in identifying the winning formula - attractive interface & design supported with the I-tunes music store. Source: The Atlantic
  14. 14. The Winning Formula Synchronizing a service model with I-pod & I-tunes helped Apple succeed where others failed I-tunes Apple launched the I-tunes store in 2003 and reached the ‘billionth’ download landmark within a year and a half of launch. Source: The Atlantic I-pod  Due to absence of an online distribution platform, sales of portable CD players continued to be 2x of MP3 players.  Apple sought support from record companies to place their music on the I-tunes store – an attempt to combat illegal downloads  By 2008, music consumption shifted from physical discs to digital distribution  Apple captured 48% share by 2008 – with its nearest competitor – Sansa having 8% share  Currently, Apple enjoys 73.5% market share. Source: NPD Sales data Since 1998, 400m units of MP3 players have been sold of which Apple contributes to a third. Apple reached 50m units in 4.5 years, while Sony Walkman took 10 years to achieve similar sales.
  15. 15. I-pod Design Innovation Winning through excellence in vertical integration Apple was able to successfully synchronize its product offering of the I-pod with an excellent online music distribution service to create a compelling business model
  16. 16. The most innovative designers consciously reject the standard option box and cultivate an appetite for ‘thinking wrong’ “ “
  17. 17. Fair & Lovely Creating demand by addressing a subconscious need  All women desire to look beautiful. In India, beauty is generally associated with fairness – which was the insight that paved way for Unilever to launch Fair & Lovely.  When FAL was launched, the Indian skin-cream market was dominated by cold-creams from Ponds & Lakme.  In months, FAL built significant market share, driving the skin cream category in the country.  Seeing the enormous success of HUL, other players like Godrej, Emami & Fairever entered the market and intensified competition
  18. 18. Fair & Lovely Consistency in communication Communication on FAL has remained consistent with its brand core of with situational variance in TVCs Winning through identifying untapped spaces Unilever identified a high-potential opportunity within the skincare segment based on the insight around fairness & beauty that is embedded in the Indian culture to create a compelling offering through Fair & Lovely
  19. 19. True Innovation is coming up with a product that consumers didn’t even know they need. “ “
  20. 20. Johnnie Walker Premiumisation redefining Iconicity  Keeping in line with it’s proposition of ‘Progress’ JW has always believed in taking a step forward. Experiments have always emboldened the brand.  The Luxury market in the BRIC was exploding with consumers premiumising across various product categories. Aspirers’ were consuming 60% of luxury, influenced by ‘High-end consumer segment  By then the brand had launched ‘Blue Label’ one of its most premium whiskies . The challenge was whether ‘Blue Label’ is the ceiling or can we aim to become a ‘Luxury Icon’ with the likes of LV, Cartier etc.  JW redefined & stretched the boundaries of luxury through a multi-pronged customer centric model called Social diffusion – based on the strategic pillars of 1) Transformational Product Architecture 2) Physical Spaces 3) Iconic Content & Engaging Content 4) Brilliant Influencer Program
  21. 21. $20 $30 $60 $85 $250 $100 $500 $1000 $3000 Transformed ‘Johnnie Walker Trademark’
  22. 22. 15% 16% 17% 18% 19% 20% 21% 22% 23% F08 F10 F11 F12 F13 16% 22%  APAC luxury business has doubled in 5 years  Driving 40% of Diageo APAC growth SDLX Contribution to Net Sales Joining global power brands Google, Netflix and Twitter, Johnnie Walker has come in at number 31 in the New York-based publication Fast Company’s countdown of the world’s 50 most innovative brands in 2014.
  23. 23. For some… Innovation is ingrained in their DNA!
  24. 24. “Innovation will always be 3Ms heart and soul and our approach will remain ‘technological differentiation applied across multiple businesses.” George Buckley, CEO, 2011 A few examples of how 3M has touched lives across the globe through innovation
  25. 25. By utilizing, Tegaderm™, a thin, transparent film used in hospitals to secure IV catheters, 3M was able to develop the Nexcare™ Waterproof Bandage. A bandage that not only seals out water, dirt and germs, but also allows the wound to breathe because the materials are designed to allow oxygen and water vapour to pass through them, preventing the skin from getting macerated.
  26. 26. Hear Here The Japanese Space Agency, JAXA, used the 3M™ Littmann ®Scope-to-Scope Tele-Auscultation System in telemedicine experiments with an astronaut on the International Space Station. In ground control, a doctor listened to the astronaut’s heart beat, and it sounded exactly the same as if they had met in person.
  27. 27. 3M encourages a culture of innovative thinking A core belief of 3M is that creativity needs freedom. That’s why, since about 1948, 3M has encouraged employees to spend 15% of their working time on their own personal projects Time + Funds = Genesis Grants Twice a year, six to eight of the most interesting ideas floating around 3M can receive Genesis Grants: about USD 30,000 to USD 75,000 of seed money for 12 months of research i.e. USD 750,000 given out to explore ideas that don’t have the official financial backing of a business unit!
  28. 28. Accolades won by 3M 2012 - 3M was named among Thomson Reuters “2012 Top 100 Global Innovators 2012 - 3M earned a top spot on Booz & Company’s list of most innovative companies for the third consecutive year, ranking No. 3 behind Apple and Google 2013 - 3M ranked No. 5 on Booz & Company’s Global Innovation 1000 study’s survey ranking of the 10 most innovative companies. 2013 - 3M was named a Thomson Reuters 2013 “Top 100 Global Innovator.” 2014 - 3M ranked No. 14 overall in the Bluefin Elastic Innovation Index of 50 global companies that that have strong reputations in the news media for being innovative Source: 3M Website
  29. 29. Innovation is an on-going cycle; one without a beginning and without end.“ “
  30. 30. Amazon  Amazon started off as an online bookstore in 1995, but soon diversified into electronics, software, games, apparel and other categories.  Since launch, Amazon’s advantage was touted as the ‘Earth’s biggest warehouse.’ The company capitalized on scale and massive selection  And as online retail matured, it became harder to dominate the space based on product selection alone. Other Internet retailers were able to offer similarly wide assortments  In order to compete effectively against other e-commerce portals, Amazon shifted focus to a business model built around excellent service delivery and efficient logistics
  31. 31. Amazon’s Service Advantage Amazon Prime Air Amazon is also testing unmanned drones to deliver goods to customers, The drones, called Octocopters, could deliver packages weighing up to 2.3kg to customers within 30 minutes. Sunday Delivery – Tie up with U.S Postal Service Amazon tied up with the U.S Postal Service to deliver packages on Sunday in key U.S markets of New York & Los Angeles. This service will extend to more cities in 2014. Winning through excellence in service delivery To differentiate, shifted focus from ‘one-stop-shop’ to ‘fast delivery’ through constant investment in optimizing logistics. Amazon Prime A comprehensive program (for $79 pa) which guarantees product delivery in 2 days, free access to Amazon Instant video, and ability to borrow from Kindle’s e-book library.
  32. 32. Innovation is all about harnessing a chain reaction of new ideas.“ “
  33. 33. Nike ‘Co-creating & driving unique experiences’ • Platform supporting the world’s largest online community of runners • Launched a new product line with Apple  for running to music & for sharing running stats within community • Brought to life through a unique event experience – Nike Human Race • First worldwide event in 2008 delivered a 68% increase in community • Sold over 1.3 million Nike+ iPod Sport Kits, and 500,000 Nike+ SportBands. • Nike+ is credited with Nike's share gains in U.S. running shoes from 48% in 2006 to 61% in 2008 In 2006, Nike launched Nike + : a global running community facilitated on line and brought to life through a unique event experience – Nike Human Race Winning through internal collaboration Success of Nike+ was not a result of only R&D innovation. It was a collaborative solution developed and sharpened by marketing experts, shoe designers, software engineers, usability specialists, and people in various other disciplines – all working towards one ambition!
  34. 34. Innovation is co-creation. It is a collaborative process involving all those who strongly believe in an idea. “ “
  35. 35. Unilever’s ‘Diversity’ Program  Unilever has always strived to achieve “gender balance” in the workplace. To that end, the company sets clear targets for its CEO and his direct reports around the equal representation of men and women in management roles.  When Leena Nair (Executive Director, HR) joined Hindustan Unilever in 1992, less than 5% of the employees were women. However, thanks to Unilever’s diversity initiatives, today 1 in every 5 managers are women with close to 18% in leadership roles.  Unilever identified that most women after becoming mothers decided to take an indefinite break from their careers. In order to address this, the company undertook several initiatives. Alchemy a mentoring program for high-potential women employees Career by Choice  aims to bring women, who have dropped off the career path, back to work. Job Sharing  which allows certain jobs to be 'shared' by two employees, both working half the time.
  36. 36. Working Mother, a magazine focused on parenting and women's issues, today named Unilever as one of the 2012 Working Mother 100 Best Companies for its commitment to progressive workplace programs, including child care, flexibility, advancement and paid family leave. Winning through excellence in human-resource management Unilever’s belief in ‘an organization is as good as the talent that subsists’ was instrumental in bringing about strong employee retention initiatives within the company.
  37. 37. Thank You!