Product refresh pov


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Product refresh pov

  1. 1. Product refreshHow much product innovation is too much for the consumer?
  2. 2. The paradox of choice: Is too much choice still better? There is a fundamental difference between choice & freedom Choice Freedom = essential to autonomy, = essential to self-respect, which is fundamental to public participation, mobility and nourishment well-being The fact that some Not all choices enhance choice is good does freedom: it may impair freedom by taking time not necessarily mean and energy that more choice is betterSource: Barry Schwartz, The Paradox of choice (2005)Presentation1 2
  3. 3. Initially extensive choice is more attractive but it can decrease satisfaction and motivation Consumers are initially more attracted to extensive choices than to limited choice sets. CHOICE IS… HOWEVER ENJOYABLE OVERWHELMING This isn’t reflected in their • Feel more committed & B • Amount of information to purchasing behavior. What responsible be considered seemed to be appealing at • Knowing that the chance of U • Limited time & energy T first, reduced their making a motivation to buy. good choice is • FEAR OF LATER high REGRETSource: Barry Schwartz, More isn’t always better (Harvard Business Review 2009) Iyengar & Lepper, When choice is demotivating: Can one desire too much of a good thing? (Journal of Personality and Social Psychology (2000)Presentation1 3
  4. 4. The level of satisfaction and motivation to buy are influenced by opportunity costs & regret Will produce dissatisfaction but also paralysis of making choices Every choice is associated Anticipated due to the fear of regret. Makes with OPPORTUNITY COSTS. regret decisions harder to make. The necessity to make trade-offs affects the level of satisfaction because more attractive options also Detracts from satisfaction mean more lost Post- whether or not the regret is opportunities. decision justified. It makes decisions regret harder to enjoy.Source: Barry Schwartz, The Paradox of choice (2005)Presentation1 4
  5. 5. When is choice positive or negative in your portfolio? The effect of assortment size on market share depends on the alignability of the assortment ALIGNABLE ASSORTMENT • Alternatives vary along a single, compensatory product dimension MARKETSHARE • Increase in market share because its meeting individual preferences without increasing conflict too much ASSORTMENT SIZE NON ALIGNABLE ASSORTMENT • Alternatives vary along multiple, noncompensatory dimensions • Cognitive overload that leads to frustration and regret • Decrease in market shareSource: Gourville & Soman, Overchoice and assortment type: when and why variety backfires (Marketing Science 2005 Vol 24 No 3)Presentation1 5
  6. 6. Three observations in the marketing world “Plus du n’importe quoi” 1 Consumers aren’t proud to consume anymore: doing more with less. There is a need for RELEVANCY. 2 It is getting more difficult to put people in segments and push a product on them. PUSH MARKETING IS OVER and marketers should ask themselves if there is a demand for it. 3 Marketers should think about the NEEDS of the consumer and not in terms of shelf spaceSource: Internal interviews The House of MarketingPresentation1 6
  7. 7. Is there an overload of choice or a selection problem? Focus by using simplicity marketing to facilitate the decision making process Increase perceived alignability Guide through process • Categorize: feature bundling • Online: filters & recommendations • Make your service • Understandable product fiches packages/products go from multiple dimensions to one dimension If the choosing process is too difficult, consumers will discriminate based on PRICE. Because it will remain the only understandable and comparable dimension.Source: Spenner & Freeman, To keep your customers, keep it simple (Harvard Businees Review May 2012) De Standaard 12 oktober 2010 (Marketing van de eenvoud) & 13 november 2010 (Verlamd door te veel keus) Internal interviews The House of MarketingPresentation1 7
  8. 8. How fast should this simplified offering be refreshed? Be agile and adapt according to consumer evolution Consumer INSIGHTS are indispensable Look at the evolution in CONSUMER NEEDS & USE Impacts type of refresh needed • Adjust existing product/service • Launch new product/service • Change entire product offering and categorizationSource: Internal interviews The House of MarketingPresentation1 8
  9. 9. Product type impacts the pace of product refresh Products Services Brand importance Satisfaction importance Durables FMCG Purchasing frequency • Watch out for • Need for transparency • Lower regret/frustration and comparison implication and novelty can • People use this for • Ease of decision making trigger people a longer time and process is key don’t want to feel • But buy out of as if they are using habit and want an outdated it to go fast product More refresh (andchoice) acceptableSource: Internal interviews The House of MarketingPresentation1 9
  10. 10. In your communication; do not overwhelm you consumers with big launches MARKETERS/PRODUCT AVERAGE CONSUMER MANAGERS Too much change results in • Love new products & insecurity & frustration innovation because: • can’t find the • Want to communicate product/service they about it were used to • Regret because too much features changed THREE GUIDING PRINCIPLES 1 Launches are not always necessary: not every change has to be communicated because often it is just a small adaptation of the product 2 Launches with small updates in between 3 If you want something new to say in your marketing campaign: highlight your different products/packages in your categorizationSource: Internal interviews The House of MarketingPresentation1 10
  11. 11. Find your sweetspot & refresh rate 1 Need for relevancy Consumers experience regret when confronted with opportunity costs of 2 Push marketing is over different choice alternatives. order to not loose the consumer, In these feelings should be managed 3 Consumer needs should be the driver for product offering & refresh by facilitating the decision making process. FOCUS AGILITY COMMUNICATION • Categorize by feature • Only launches when bundling and obtain a there is a significant comparable offering change Understanding the evolution in consumer • Updates in between needs & use will for features added • Guide consumers determine whether through your offering product refresh is • Highlight different by using buying needed aspects of guides, interactive packages/products in tools or product fiches marketing communicationsPresentation1 11
  12. 12. ILLUSTRATIONSPresentation1 12
  13. 13. Illustration communication Cars (BMW) & Microsoft Periodical big launches of totally new models/packages with small updates in between • Categorization: clear distinction between models and submodels • Big relaunch when there is a totally new model • Otherwise updates for new features added, but do not communicate extensively about thisPresentation1 13
  14. 14. Illustration categorization & communication Mobistar & Telenet Simple categorization to make offer more comparable • Need for focus & transparency, especially in the Telco sector • Consumer use demanded an entire new categorization • Communicated the big relaunch and now Mobistar has campaigns about each seperate packagePresentation1 14
  15. 15. Illustration guiding consumer Base • Online tool • Interactive buying guide • Helping consumer get through decision making processPresentation1 15
  16. 16. Illustration transparency Mobile Vikings More is less & you get what you see • Dare to be different and offer a limited set of services • Clear and straightforward: you get what you see • Huge success: > 137.223 usersPresentation1 16
  17. 17. Illustration product dependency Philadelphia versus Boursin Cuisine Is Philadelphia going too far in its product choice especially with Philadelphia Milka? CONSUMPTION RATE Boursin Cuisine is consumed faster than Philadelphia and so perhaps variation and refresh is more tolerated. It can be used for different meals and you can experiment with it. In contrast Philadelphia sits longer in the fridge and therefore making a choice is more difficult. Therefore the latter doesn’t need extensive variation. Even products that look alike can differ when it comes to refresh & choice: consumer insights are key!Presentation1 17