Innovation A new (way) that creates economic value for the business

1. Consumer Understanding for
Innovation
A presentation to Microsoft India
October 2010

2. The Debate
Consumer & Market Research Consumer & Market Research
• Helpful • Misleading
• Required • Time wasting
• A must • Consumers don’t know what
• To know what consumers they want
want • Willing to take risks
• Risk reduction
Follow the Consumer Lead the Consumer

3. Beyond Debate
Consumer Understanding is critical for
success - in NPD & Innovation

4. What do we mean by Innovation?
A new (way) that creates economic
value for the business

5. Innovative Products

6. What sets them apart?
All are based upon a powerful concept or idea

7. The Ideas Continuum

8. Example 1: Two Wheelers
A new kind of
a 2 - wheeler
Scooterette
New model of
a motor-bike or
scooter

9. Example 2: Dish wash products
Vacuum-based
Suction device
for dish cleaning
Dish wash paste
Dish wash liquid
A new variant of
a dish wash bar

10. Example 3 : Books
E-
Book
Audio
Book
A new genre of
book in paper back
or hard back

11. The kind of consumer understanding we need -
depends upon the kind of product we are aiming to create

12. The Task
Design a new kind of word-processing
software

13. Consumer Understanding:
Due Diligence Information
Consumer profile
Usage behavior
Choice criteria
Preferences
Segmentation
Performance benchmarking

14. Consumer Understanding: Insights
Deeper probing into the real
Motivations and cultural software
behind consumer choice
Searching for Latent needs

15. Consumer Understanding: Intimacy
Intimate appreciation of
Consumer life space, product
experience and context

16. Levels of Consumer Understanding
Due diligence Information
Stated need gaps from the product
category/brand
Consumer Insight
Deeper probe into the real motivations
and cultural software driving choice
Consumer Intimacy
Intimate appreciation of the
consumer’s life space and product
experience context – to identify
next gen problems and solutions
and dream up new concepts

17. The Product Development Puzzle
The consumer faces a problem.
The product development team has identified it.
They design and make a technically superior product to current options.
Would the consumer immediately want to buy it to replace their
current option?

18. The Irrationality of Human Choices
“Perceived to be superior” – the effect of framing / positioning
“Habit / inertia” – the effect of the comfort zone
“Price-value equation” – the effect of money and budget
Management pressures
“Peer group and social conformity” – demonstration effect
Pleasure, delight, relationships – the effect of non performance
factors

19. From Product Proposition
>> To Consumer Proposition

20. From Consumer Understanding for Product
Development – Development Research
To Consumer Validation of product concept and
marketing mix –
Validation Research

21. Consumer Understanding for Innovation
Information
Insight
Intimacy
Imagination
Implementation

22. The Debate
Consumer & Market Research Consumer & Market Research
• Helpful • Misleading
• Required • Time wasting
• A must • Consumers don’t know what
• To know what consumers they want
want • Willing to take risks
• Risk reduction
Follow the Consumer Lead the Consumer

23. The End