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Innovation & Product Development© TNSThe Trouble with InnovationPresented by: David SoulsbyApril 2013
Innovation & Product Development© TNSInnovation is the ‘go to’ strategy to deliver againststretch financial expectationsTo...
Innovation & Product Development© TNSWhat do the Best Innovators Do?The TNS view“If you’re not failing every now and again...
Innovation & Product Development© TNSWhat do the Best Innovators Do?Entrepreneurs help big brands hatch new models of inno...
Innovation & Product Development© TNSWhat do the Best Innovators Do?The TNS view1. They create a culture which accepts hon...
Innovation & Product Development© TNSThey create a consistent flow of good ideas“The best way to have a good idea is to ha...
Innovation & Product Development© TNSWhat do the Best Innovators Do?The TNS view1. They create a culture which accepts hon...
Innovation & Product Development© TNSWhat do the Best Innovators Do?The TNS view1. They create a culture which accepts hon...
Innovation & Product Development© TNSWhat do the Best Companies Do?The TNS view1. They create a culture which accepts hone...
Innovation & Product Development© TNSWhat do the Best Companies Do?The TNS view1. They create a culture which accepts hone...
Innovation & Product Development© TNSBut generally failure rates for innovation areunacceptable….
1Delivering successful innovation
©TNS 2012What is the definition of a successful innovation?13• Survival?• Providing growth to the business that is stronge...
©TNS 2012Incrementality has a strong impact on the chance ofsuccessful growth - Savoury snacks category140%20%40%60%80%Hi ...
Innovation & Product Development© TNSSo TNS believe incrementality must be built into theway we assess new products throug...
Innovation & Product Development© TNSOnce the decision has been made to invest in product development it is difficultto ‘p...
Innovation & Product Development© TNSAt TNS, we don’t think it’s good enough to keep gettinginnovation wrong, so we do thi...
Innovation & Product Development© TNSAn innovation process that ensures you take the bestgrowth opportunities to marketCor...
2Identifying the innovations which can deliver growth
Innovation & Product Development© TNSThe current norm – biggest is best….but trial potential is only part of the story20Tr...
Innovation & Product Development© TNS% IncrementalLowOur database shows considering incremental growthpotential provides a...
Innovation & Product Development© TNSUnderstanding incremental growth potentialprovides better adviceTraditional categoris...
Innovation & Product Development© TNSUnderstanding incremental growth potentialprovides better adviceWhen we build in incr...
Innovation & Product Development© TNSWinning cannibal?Initiatives with broadappeal that will cannibalisethe existing franc...
Innovation & Product Development© TNSUnderstanding incremental growth potentialmeans better adviceNew categorisation takin...
Innovation & Product Development© TNSUniqueness does not guarantee incrementalityIn fact, you cannot predict incrementalit...
Innovation & Product Development© TNS“Definitely would” buyers are more important than “probably would” buyersTo predict i...
Innovation & Product Development© TNSProof that individual modelling doubles the accuracyof the incremental growth estimat...
Innovation & Product Development© TNSIndividual modelling isn’t easy.TNS has 20 years experience and validation that our m...
3Reducing the time to being market-ready
Innovation & Product Development© TNSDiagnostics support fast decision-making to get theright products to market fasterSHO...
Innovation & Product Development© TNSIt is important not to test products in a vacuumTo get the concept-product fit right ...
Innovation & Product Development© TNSTo check we have met consumer expectations wecalculate a Synergy Index by comparing i...
Innovation & Product Development© TNSWe know what good looks like….34Database analysis for key measures: concept, product,...
4Case study
TNS © 1.24.2013Test projectThe purpose of this research was to: Assess consumer acceptance and growth potential for each ...
4.1Key screening and prioritization criteria
TNS © 1.24.2013Test projectAssuming 100% awareness and distribution. Based on Total Category Buyers% Trial Bottom 50% 50 -...
TNS © 1.24.2013Test projectAssuming 100% awareness and distribution. Based on Total Category BuyersIncremental Non-increme...
4.2Development plans
TNS © 1.24.2013Test projectConcept 2Incremental winnerDevelopment guideProduct expectations:Natural ingredientsSpicy flavo...
TNS © 1.24.2013Test projectConcept 1Winning Cannibal?Growth191938Development guideProduct expectations:Strong flavour , cr...
4.3Recommendations
TNS © 1.24.2013Test projectGrowth potentialDe-prioritize Investigate Winning Cannibals? Incremental WinnersConcept 4I TCon...
TNS © 1.24.2013Test projectRecommendationsFast trackFast Track Diagnosis RationaleConcept 2 Incremental winner Strong tria...
TNS © 1.24.2013Test projectRecommendationsProceedProceed Diagnosis RationaleConcept 1 WinningCannibal?Concerns over cannib...
TNS © 1.24.2013Test projectRecommendationsStopStop Diagnosis RationaleConcept 4 De-prioritize Weak incrementality. Resourc...
5Successful growth through innovation
Innovation & Product Development© TNSTNS identifies winning ideas and products for growth Biggest isn’t always best. Incr...
Innovation & Product Development© TNSTNS-Sifo Consumer & Retail Contact Information50Astrid van den Brink Erlandsson+46 70...
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The Trouble with Innovation - TNS Sifo seminarium 2013

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Sälja eller sälja mer? Mät vilken tillväxt dina nya produktidéer genererar!
Vid det här seminariet berättar David Soulsby, globalt ansvarig för TNS erbjudande av produktutveckling och volymestimat, hur företag kan tjäna mer pengar på sina produktlanseringar genom mer träffsäkra tester och genom att våga satsa på nya idéer.

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The Trouble with Innovation - TNS Sifo seminarium 2013

  1. 1. Innovation & Product Development© TNSThe Trouble with InnovationPresented by: David SoulsbyApril 2013
  2. 2. Innovation & Product Development© TNSInnovation is the ‘go to’ strategy to deliver againststretch financial expectationsToday’s BaseBusinessTomorrow’sTargetToday’s BaseBusinessTomorrow’sIdentifiedOpportunities(incremental)Growth GapTomorrow’sIdentified Risksto Base?2
  3. 3. Innovation & Product Development© TNSWhat do the Best Innovators Do?The TNS view“If you’re not failing every now and again, it’s a signyou’re not doing anything very innovative”Woody Allen1. They create a culture which accepts honest risk and failure3
  4. 4. Innovation & Product Development© TNSWhat do the Best Innovators Do?Entrepreneurs help big brands hatch new models of innovationPharmaceutical giant GlaxoSmithKline (GSK) signed a deal with the McLarenFormula 1 team last September to try to learn from a company known for itsworld-class racing and super quick tyre changes.“The idea is to work with McLaren and learn how it operates such a leading-edge,fast-paced innovative company” says Kerry O’Callaghan head of GSK’s globalbrand communications team.“There’s a culture at McLaren about being open about mistakes – a philosophy ofconstant innovation and learning. From a cultural point of view, that’s a greatthing to bring into the business”Marketing Week 22 March 20121. They create a culture which accepts honest risk and failure4
  5. 5. Innovation & Product Development© TNSWhat do the Best Innovators Do?The TNS view1. They create a culture which accepts honest risk andfailure2. They create a consistent flow of good ideas5
  6. 6. Innovation & Product Development© TNSThey create a consistent flow of good ideas“The best way to have a good idea is to have lots of ideas”Linus Pauling: Chemist and multiple Nobel prize winnerTNS think he was only half rightHaving lots of ideas is a great start, but it won’t getyou very far unless you can recognise which are thegood ones6
  7. 7. Innovation & Product Development© TNSWhat do the Best Innovators Do?The TNS view1. They create a culture which accepts honest risk andfailure2. They create a consistent flow of good ideas3. They ruthlessly screen and prioritise“Do the right projects, not just do projects right”7
  8. 8. Innovation & Product Development© TNSWhat do the Best Innovators Do?The TNS view1. They create a culture which accepts honest risk and failure2. They create a consistent flow of good ideas3. They ruthlessly screen and prioritise4. They are first to get it right in the marketDeveloped at Hendry CorporationNormal Order-of-Entry Shares are:First 70% 57% 50%Second 30% 25% 22%Third 18% 16%Fourth 12%8
  9. 9. Innovation & Product Development© TNSWhat do the Best Companies Do?The TNS view1. They create a culture which accepts honest risk and failure2. They create a consistent flow of good ideas3. They ruthlessly screen and prioritise4. They are first to get it right in the market5. They overplan and overmanage launches9
  10. 10. Innovation & Product Development© TNSWhat do the Best Companies Do?The TNS view1. They create a culture which accepts honest risk and failure2. They create a consistent flow of good ideas3. They ruthlessly screen and prioritise4. They are first to get it right in the market5. They overplan and overmanage launches6. They embrace systematic learning to create best practice throughout theinnovation process10
  11. 11. Innovation & Product Development© TNSBut generally failure rates for innovation areunacceptable….
  12. 12. 1Delivering successful innovation
  13. 13. ©TNS 2012What is the definition of a successful innovation?13• Survival?• Providing growth to the business that is stronger than the categorydevelopment = “successful growth”• To understand what drives successful growth TNS haveundertaken R&D across a range of categories based on KantarWorldPanel data, ie household purchase panel.• We looked at the importance of:• Total sales for the new product• Incrementality = 100% - Cannibalisation %
  14. 14. ©TNS 2012Incrementality has a strong impact on the chance ofsuccessful growth - Savoury snacks category140%20%40%60%80%Hi VOL - Hi INC Med VOL - Hi INC Hi VOL - Low INC Med VOL - Low INC Low volumeProbability of successful growthSource: Kantar WorldPanel
  15. 15. Innovation & Product Development© TNSSo TNS believe incrementality must be built into theway we assess new products throughout the processBiggest is not always the bestOverall potential doesn’t necessarily measure the growth potential of an ideaProduct A Product B Product C Product DProduct A Product B Product C Product DSales six months after launch (€m)CannibalisationIncremental volume15
  16. 16. Innovation & Product Development© TNSOnce the decision has been made to invest in product development it is difficultto ‘put the brakes on’ a projectSource: Cooper & Kleinschmidt29%Prelim market assessIdea screeningPrelim tech assessMarket studyFinancial analysisProduct developmentIn-house prod testCustomer prod testTest marketPilot productionBusiness analysisProductionMarket launchAverage % of innovation spend16And, you need to know you are backing growth ideasearly in the process
  17. 17. Innovation & Product Development© TNSAt TNS, we don’t think it’s good enough to keep gettinginnovation wrong, so we do things differently17The research industry needs to look at its trackrecord and reject the status quo
  18. 18. Innovation & Product Development© TNSAn innovation process that ensures you take the bestgrowth opportunities to marketCorporate goals& capabilitiesIdeationMarket opportunities Concept prioritisation Concept /productdevelopment andrefinementVolumeestimation/launch18MatrixNeedScopeU&AConcepteValuateProducteValuateLauncheValuateSuperGroupWorkshop
  19. 19. 2Identifying the innovations which can deliver growth
  20. 20. Innovation & Product Development© TNSThe current norm – biggest is best….but trial potential is only part of the story20Trial potential HighLowSTOP REWORK PROGRESS
  21. 21. Innovation & Product Development© TNS% IncrementalLowOur database shows considering incremental growthpotential provides a better perspectiveConcepts that could grow the business, butwould be traditionally screened outHighLowShould we progress thesecannibalistic concepts?HighTrial potential21
  22. 22. Innovation & Product Development© TNSUnderstanding incremental growth potentialprovides better adviceTraditional categorisation based on highest trial potentialProgress StopRework22
  23. 23. Innovation & Product Development© TNSUnderstanding incremental growth potentialprovides better adviceWhen we build in incrementality, in 40% of casesyou would make a different screening decisionProgress StopRework23
  24. 24. Innovation & Product Development© TNSWinning cannibal?Initiatives with broadappeal that will cannibalisethe existing franchise.Incremental winnerInitiatives with stronggrowth potentialDe-prioritiseInitiatives with narrowappeal and limited growthpotentialInvestigateInitiatives with moderategrowth potential whichhave stronger appealamong Early Adopters24Concept eValuate identifies the new product ideas thatwill drive growth early in the innovation processCannibalisation isn’t always bad:• Better margin (but rare)• Defensive when you have a weakparent
  25. 25. Innovation & Product Development© TNSUnderstanding incremental growth potentialmeans better adviceNew categorisation taking account of growth potentialIncremental winnersInvestigateDe-prioritiseWinning cannibals?25
  26. 26. Innovation & Product Development© TNSUniqueness does not guarantee incrementalityIn fact, you cannot predict incrementality from other traditionalmeasuresCorrelation (R) with:Purchase intent -0.32Uniqueness 0.21Liking -0.24Value for money -0.02Believability -0.0526
  27. 27. Innovation & Product Development© TNS“Definitely would” buyers are more important than “probably would” buyersTo predict incremental growth accurately you need tounderstand people as individualsAggregate analysis treats all respondents as equals - butHeavy buyers of the new product are more important than light buyers27
  28. 28. Innovation & Product Development© TNSProof that individual modelling doubles the accuracyof the incremental growth estimateMoreaccurateLessaccurateSalad dressing Toothpaste DishwashertabletsSnacks CSD Shower gelTraditional aggregate model TNS individual modelAccuracy of cannibalisation estimate28
  29. 29. Innovation & Product Development© TNSIndividual modelling isn’t easy.TNS has 20 years experience and validation that our models arepredictiveIn-markettrialrateTrial index weighted by marketing plans29
  30. 30. 3Reducing the time to being market-ready
  31. 31. Innovation & Product Development© TNSDiagnostics support fast decision-making to get theright products to market fasterSHOP31
  32. 32. Innovation & Product Development© TNSIt is important not to test products in a vacuumTo get the concept-product fit right you need to test the productversus expectationsRepeatpotentialSynergyHighLowProduct weakvs. conceptexpectationsProduct strongvs. conceptexpectations32
  33. 33. Innovation & Product Development© TNSTo check we have met consumer expectations wecalculate a Synergy Index by comparing individualconcept and product purchase probabilities33100% asked atproduct stage100% asked atconcept stage254530OtherProbably buyDefinitely buy1186172442820304030
  34. 34. Innovation & Product Development© TNSWe know what good looks like….34Database analysis for key measures: concept, product, synergySummarised by the Launch Health Check scoreHealthyUnhealthy50-25% Top 25%Concept Bottom 50%SynergyProduct
  35. 35. 4Case study
  36. 36. TNS © 1.24.2013Test projectThe purpose of this research was to: Assess consumer acceptance and growth potential for each of theseconcepts Prioritize and provide guidance as to which to take forward to thenext stage of developmentN=200 category buyers per conceptQuestionnaire covered key dimensions: Purchase intention, Source of Trial, Value for Money, Uniqueness,Relevance, Excitement, Liking, Credibility, ClarityContextFour new Snacks ideas were tested in a standard Concept eValuate
  37. 37. 4.1Key screening and prioritization criteria
  38. 38. TNS © 1.24.2013Test projectAssuming 100% awareness and distribution. Based on Total Category Buyers% Trial Bottom 50% 50 - 25% Top 25% Bottom 50% benchmark Top 25% benchmarkTrial50037Concept 132Concept 221Concept 321Concept 43036Identifying the concepts with strong trial potential isonly part of the story
  39. 39. TNS © 1.24.2013Test projectAssuming 100% awareness and distribution. Based on Total Category BuyersIncremental Non-incremental Bottom 50% 50 - 25% Top 25% Bottom 50% benchmark Top 25% benchmarkTrial50026Concept 221Concept 319Concept 118Concept 42025Winningcannibal?IncrementalwinnerInvestigate De-prioritiseTo maximise your chance of success you need anunderstanding of incremental potential
  40. 40. 4.2Development plans
  41. 41. TNS © 1.24.2013Test projectConcept 2Incremental winnerDevelopment guideProduct expectations:Natural ingredientsSpicy flavourPrice point:€2TargetBrand X buyersWatch outWeak credibilityGrowth62632Topspin45Uniqueness35Early Adoptertrial42ExcitementBased on Total Category BuyersIncremental growth Brand cannibalization Bottom 50% 50 - 25% Top 25%Precise development plans aid speed tomarket
  42. 42. TNS © 1.24.2013Test projectConcept 1Winning Cannibal?Growth191938Development guideProduct expectations:Strong flavour , crispy texturePrice point:€1.50TargetWatch outTopspin56Uniqueness35Early Adoptertrial55ExcitementBased on Total Category BuyersIncremental growth Brand cannibalization Bottom 50% 50 - 25% Top 25%Low excitementHouseholds with children under 10
  43. 43. 4.3Recommendations
  44. 44. TNS © 1.24.2013Test projectGrowth potentialDe-prioritize Investigate Winning Cannibals? Incremental WinnersConcept 4I TConcept 3I TConcept 1I TConcept 2I TBased on Total Category BuyersI Incrementality T Trial Bottom 50% 50 - 25% Top 25%
  45. 45. TNS © 1.24.2013Test projectRecommendationsFast trackFast Track Diagnosis RationaleConcept 2 Incremental winner Strong trial and high growth potentialProduct must deliver against expectation ofnatural ingredients
  46. 46. TNS © 1.24.2013Test projectRecommendationsProceedProceed Diagnosis RationaleConcept 1 WinningCannibal?Concerns over cannibalisationProduct development must focus on at leastretaining margin versus existing productConcept 3 Investigate Strong interest among Early Adopters plus highincrementality suggest this idea should benurtured
  47. 47. TNS © 1.24.2013Test projectRecommendationsStopStop Diagnosis RationaleConcept 4 De-prioritize Weak incrementality. Resource can be betterfocussed on ‘winners’
  48. 48. 5Successful growth through innovation
  49. 49. Innovation & Product Development© TNSTNS identifies winning ideas and products for growth Biggest isn’t always best. Incrementality provides the key to growthpotential Individual-based modelling provides more accurate screening andprioritisation based on incremental growth potential Back the right projects early in the innovation process Concept Product Synergy is vital for in-market success49
  50. 50. Innovation & Product Development© TNSTNS-Sifo Consumer & Retail Contact Information50Astrid van den Brink Erlandsson+46 70 184 23 85astrid.brink@tns-sifo.seMaria Rönnberg+46 73 358 63 12maria.ronnberg@tns-sifo.sePetra Laru+46 701 84 21 85petra.laru@tns-sifo.se

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