SlideShare una empresa de Scribd logo
1 de 44
Descargar para leer sin conexión
 
                           E x c h a n g e o f I d e a s   |  January/February 2010  |  $10.95 




HUB
     �e

M A G A Z I N E




      A publication of Reveries.com and Cool News of the Day
WOULDA
COULDA
SHOULDA

3 words you won’t have to say next time.
At Upshot, we not only help you develop innovative ideas,
we help you get them to market first. So next time,
it’s the other guy saying, “I wish I had done that.” Not you.

For more information, visit upshot.net.




© Upshot Inc. 2010
HUB
                                                                                                �e
P I VOT P OINT

                                                                                           M A G A Z I N E




      Razor Sharp                                                              JANUARY/FEBRUARY 2010




     A    lmost 15 years ago, I started asking the best and
     brightest in marketing questions about the future of



                                                                    22
     this business, first on Reveries.com and now in the Hub.
         That probably translates into thousands of questions
     asked. But, in fact, I’ve really only posed variations of
     one, pivotal probe: Where’s it all headed?                     COVER STORY
         Some of the answers have been more memorable
     than others, obviously. If there’s one I recall best, it was   Positively Safeway
                               the response from Geoffrey           Safeway chief marketing officer Diane Dietz gets
     Remembering               Frost, a former chief marketing      inspiration from innovation. An exclusive Q&A
                                                                    interview by Tim Manners.
     the late, great           officer of Motorola, during late
     Geoffrey Frost.           summer, 2005.
                                   It’s memorable partly



                                                                    8
     because, tragically, Geoffrey passed away within weeks
     of our conversation. But it’s more because he was so
     damn clear about what he saw coming.
         He was remarkably prescient when he referred to            ROUNDTABLE
     his product as “the device formerly known as the cell
     phone.” He also suggested we should think about our            Better Things
     business as “the industry formerly known as advertising.”      Innovation just isn’t what it used to be. A discussion
         But my favorite part of the interview was when             featuring Claudia Poccia of Avon mark, Jevin
                                                                    Eagle of Staples, Randy Carlson of Diageo, and
     Geoffrey talked about the famous William Gibson
                                                                    Jim Porçarelli of Active International.
     quote: “The future has already arrived; it’s just not
     evenly distributed.”
         As Geoffrey explained, “What he’s saying is that



                                                                    16
     there are people of the future, already here, walking
     among us. If you can figure out who they are and
     co-create with them, you’re actually doing a rather
     amazing job of not only anticipating, but also shaping         W H I T E   PA P E R
     where the world can go.”
         It’s a new year, and a new decade. What’s new, for         Map the Gap
     you, in the industry formerly known as advertising?            Winning at retail requires innovation across
     Where’s it all headed?                                         bundles of brand benefits. By Vinit Doshi.




         Tim Manners
         tim@hubmagazine.com
Editor-in-Chief
Tim Manners

Senior Editors
Peter F. Eder
Jane Harris
                                               ALSO
Managing Publisher
Joseph McMahon



                                                5
Art Director                                          COOL NEWS
Julie Manners
                                                      Consumer Intelligence, Twittovation, Keds Collective, Little Nike,
Design Concept                                        Here/Nau/NYC and Full Yield.
Alexander Isley Inc.

Illustrator
John S. Dykes                                  12     R ESEARCH R EPORT
                                                      The New Super | What makes a supermarket innovative? An executive
                                                      summary of a Reveries.com survey.
Circulation Director
Bertha Rosenberg

Brain Trust
Active International
Arc Worldwide
                                               14     S U RV E Y A NA LY S I S
                                                      Supermarket Savvy | Innovative supermarkets tap into emotional and
                                                      functional desires. By Randi Moore.
Catapult Marketing
EURO RSCG Discovery


                                               20
Henry Rak Consulting Partners                         E SSAY
Hoyt & Company
Insight Out of Chaos                                  Popping for Shoppers | The “pop-up” trend is driving retail innovation.
Landor Associates                                     By Beth Ann Kaminkow.
McGuinn.com
Marketing Drive
Mars Advertising
Triad Digital Media
TracyLocke
WomanWise
                                               27     W H I T E PA P E R
                                                      The Shopper Aperture | Let’s put a new lens on the future of shopper
                                                      marketing. By Anne Howe.

Hub Club
PMA
RPM Connect
Upshot
                                               30     W H I T E PA P E R
                                                      The “We” Decade | Creating community and higher purpose will elevate
                                                      our brands in the 2010s. By Dori Molitor.

The Hub
David X. Manners Co.
107 Post Road East
Westport, CT 06880
                                               34     W H I T E PA P E R
                                                      Smooth Selling | Integrated Selling drives bottom-line sales and better
                                                      brand performance. By Paul Kramer.
203-227-7060 ext. 227
hub@hubmagazine.com
n Brought to you by the editors of Reveries.
com and Cool News of the Day, The Hub
magazine is dedicated to exploring insights,
                                               36     R ESEARCH R EPORT
                                                      The Socialized Shopper | New research shows how social media is changing
                                                      shopping behavior. By Mark Renshaw.
ideas and innovation as the ultimate drivers
of business success.

n Published bi-monthly since July
2004, The Hub’s circulation is exclusive
to Reveries’ proprietary database of
                                               40     E SSAY
                                                      Beauty in Virtue | Luxury brands can make us look (and feel) truly good.
                                                      By Cable Daniel-Dreyfus.
approximately 3,500 senior-level, client-
side executives in Fortune 1000 marketing



                                               42
departments and major ad agencies.
                                                      COOL BOOKS
n Advertising: For more information on
The Hub’s collaborative sponsorship and
                                                      Makers, Think Twice and Start-Up Nation.
advertising opportunities, please contact
Joseph McMahon (joseph@hubmagazine.
com) or 845-238-3516.
COOL NE W S




Consumer Intelligence                                                                                                     Keds Collective
The defense industry has a long history of feeding innovations to consumer markets — the                                  Keds is engaged in a “wholesale
internet, satellite navigation systems and the computer itself originated as military projects,                           business-model change” in which its
for instance.                                                                                                             consumers not only design footwear,
                                                                                                                          but can also sell it. “Marketing has
Now, the consumer-electronics industry is returning the favor. For example, the U.S. Air
                                                                                                                          evolved into a conversation with
Force just ordered some 2,200 Sony PlayStation 3 videogame consoles, which it will use as
                                                                                                                          the consumers,” says Kristin Kohler
“building-blocks of a supercomputer.”
                                                                                                                          Burrows, president of Keds.
Meanwhile, in Iraq and Afghanistan, soldiers “are using Apple iPods and iPhones to run
                                                                                                                          To keep that conversation going,
translation software and calculate bullet trajectories. Xbox videogame controllers have
                                                                                                                          Keds has launched a site, called Keds
been modified to control reconnaissance robots and drone aircraft.”
                                                                                                                          Collective, where consumers can
This is occurring because the military spends “only a small fraction” of its $1.5 trillion                                choose from a palette or upload their
budget on electronics, leaving it outspent on R&D by the consumer-electronics industry.                                   own design elements.

Electronics firms are also able to “move much faster than the slow,                                                       If Keds likes a design, it makes a deal
multi-year grind of military procurement programs ... And                                                                 with the consumer, who receives
the emergence of open-standards and open-source                                                                           a 10 percent cut on any sales. The
software make it easier to re-purpose off-the-shelf                                                                       shoes can either be ordered online by
technologies or combine them in novel ways.”                                                                              consumers or stocked by retailers for
Leaving such innovations to the private sector                                                                            sale in stores.
meanwhile enables the military to “focus their
                                                                                                                          So far, this hasn’t exactly made
spending on the development of new technologies,
                                                                                                                          anyone rich, but that’s not the point.
rather than reinventing the wheel.”
                                                                                                                          “I’m totally thrilled,” says Jeriana
[S o u r c e : The Economist, 12/12/09]                                                                                   San Juan, who has “sold six pairs of
                                                                                                                          Keds with her designs.”

                                                                                                                          For Keds, its all about turning

                                                    Twittovation                                                          “custom sneakers into an advertising
                                                                                                                          juggernaut when the designers ...
                                                                                                                          proudly holler about them from the
                                                         “Twitter’s smart enough, or lucky
                                                                                                                          rooftops of the internet.” Jeriana,
                                                          enough, to say, ‘Gee, let’s not try to
                                                                                                                          for instance, “has posted her Keds
                                                           compete with our users ... let’s outsource
                                                                                                                          designs on Facebook and is adding a
                                                           design to them,’” says Eric von Hippel,
                                                                                                                          Keds link to her website.”
                                                           author of Democratizing Innovation.
                                                                                                                          Similarly, Nike not only publishes
                                                    Twitter CEO Evan Williams agrees:
                                                                                                                          a “gallery” of consumer designs
                                                  “Most companies or services on the web
                                                                                                                          on NikeiD, but also provides
                                             start with wrong assumptions about what they
                                                                                                                          “convenient icons to click to ‘share’
  are and what they’re for,” he says. “Twitter struck an interesting balance of flexibility
                                                                                                                          them on Twitter, Facebook and
  and malleability that allowed users to invent uses for it that weren’t anticipated.”
                                                                                                                          MySpace.”
  Among other things, Twitter users invented the idea of putting the @ symbol before their
                                                                                                                          Champion, meanwhile, asked its
  user names (e.g., @cool_news). They also picked up the idea of using the # symbol to
                                                                                                                          “consumers to design hoodies and
  categorize topics — another innovation Twitter initially resisted.
                                                                                                                          submit them for votes.” Darren Paul
  The # idea came from open-source advocate, @chrismessina, who says Twitter thought                                      of Night Agency, the social-media
  the # concept was too nerdy for mass appeal. Well, now Twitter “hyperlinks the hash                                     consultancy that helped create the
  tags so readers can click and see all the other posts on a topic.”                                                      Keds Collective, comments: “People
                                                                                                                          feel much more connected to the
  Evan Williams says Twitter’s plan is to keep following its followers. “You get a bunch
                                                                                                                          brand because they’re part of the
  of users interacting and it’s hard to predict what they’re going to do,” he says. “We say,
                                                                                                                          advertising, in reality.”
  ‘Why are people using this and how could we make that better?’”
                                                                                                                          [S o u r c e : Christina Binkley,
  [Source: Claire Cain Miller, The New York Times, 10/26/09]
                                                                                                                          The Wall Street Journal, 12/10/09]




Cool News of the Day, a daily e-mail newsletter of marketing insights, ideas and inspiration, is edited by TIM MANNERS. For a free subscription, visit www.reveries.com
COOL NE W S W S
    COOL NE



                                                                          Little Nike
                                                                          Mark Parker thinks acting smaller will help Nike grow bigger. It’s not as
                                                                          though Nike, now 37 years old, is having any problems growing; its “stock is
                                                                          up 50 percent over the past five years while the S&P 500 is down 7.7 percent.”

                                                                           According to Interbrand, Nike’s brand value “has jumped from 31st to 26th”
                                                                           in the four years since Mark assumed leadership at the company. Despite
                                                                           this, Mark sees the Nike brand as something of a liability, particularly among
                                                                           younger consumers in action-sports categories.

                                                                           Jeanne Jackson, president of Nike’s retail division agrees: “Kids think it’s cool
                                                                           not to have a big, hairy name over the store,” she says. And so Nike’s latest
                                                                           retail venture not only doesn’t carry the Nike name, it has no name at all.

                                                                           Instead, the action-sports store, dedicated to skateboarding and snowboarding,
                                                                           simply displays the logos of “its three key brands at the entrance: Hurley,
                                                                           Converse and 6.0 (an action sports line that does have a Swoosh on it).”

                                                                            “The hardest thing for a company to do is to change when it doesn’t seem
                                                                            like change is necessary,” says Mark. One thing that hasn’t changed is Nike’s
                                                                            connections with celebrity athletes.

                                                                            “We always want to be connected with the world’s top athletes,” says
                                                                            Mark, himself a distance runner. “Our relationships with athletes fuel the
                                                                            innovations,” he says.

                                                                            And, of course, there’s China, where Nike invested some $1.5 billion in 2009,
                                                                            and may invest even more in the year ahead. “No matter how much you’re
                                                                            investing there, it’s not enough,” says Mark.

                                                                            [S o u r c e : Bruce Horovitz, USA Today, 12/7/09]




Here/Nau/NYC                                                                           Full Yield
Jean-Pierre Veillet is creating a pop-up boutique “using materials ...                 “We need to put food back in the heart of health care,” says Zoe
almost entirely rooted in New York City’s waste stream.”                               Finch Totten, chief executive of Full Yield. “It’s the cheapest way
                                                                                       to deal with health and the simplest, and definitely the most
This includes “fallen tree limbs found on the street, timber and
                                                                                       pleasurable,” she adds.
metal pipes from derelict Brooklyn factories and piles of discarded
cardboard boxes — so that when the store closes, at least the                          Zoe’s focus is on the way people eat in the workplace. Her solution
garbage won’t be new.”                                                                 is a branded “12-month nutritional program” that’s designed to
                                                                                       “take the guesswork out of what constitutes a healthy diet” and
The boutique is called Here/Nau/NYC and naturally “will carry
                                                                                       help reduce health-care costs.
products from several environmentally minded companies,
including shoes from Timberland and Toms, organic dresses and                          The Full Yield menu features “fresh items made with natural, whole
sweaters from Stewart + Brown, bags made of recycled truck tarps                       ingredients” and “will be sold in corporate cafeterias and in the
from Freitag and the sleek, athletic designs of Nau.”                                  prepared-foods section of local supermarkets” in the Boston area.
                                                                                       John Hancock, the insurance company, is among Zoe’s first customers,
And so Jean-Pierre is busy fashioning displays out of cardboard
                                                                                       with some 300 of its employees adopting Full Yield next year.
and trying to turn bubble-wrap into lampshades. He’s got clothes
“hanging from a rolling rack made of old pipes, timber and                             Meals are priced at $6 to $7 a meal, and employees will receive
mismatched wagon wheels.” His main worry, he says, “is that it                         “$100 worth of coupons that can be used in John Hancock’s
could end up looking clunky and cheap.”                                                cafeteria and at 18 local Roche Brothers grocery stores.”

Gordon Seabury, who owns Nau, refers to Jean-Pierre’s approach as                      Full Yield plans to take various biometric measurements of
“dumpster-diving” but is “confident that the resulting decor would                     Hancock participants throughout the year, and then “analyze the
ultimately reflect the company’s approach to considered design.”                       data against insurance claims to gauge improvements in health.”

[S o u r c e : Eric Wilson, The New York Times, 11/5/09]                               [S o u r c e : Melanie Warner, The New York Times, 11/29/09]


Cool News of the Day, a daily e-mail newsletter of marketing insights, ideas and inspiration, is edited by TIM MANNERS. For a free subscription, visit www.reveries.com
 
                                                                                                  95 
                                                                                          |  $10.
                                                                                 20 09 
                                                                    M ay   /June 
                                                      de   a s   | 
                                                 of I
                                          ange
                                   Exch




HUB
    �e

                                                                                                                                                                                   HUB              �e                          Excha
                                                                                                                                                                                                                                         nge o
                                                                                                                                                                                                                                               f Ide
                                                                                                                                                                                                                                                     as     |  Se pt
                                                                                                                                                                                                                                                                       em ber/
                                                                                                                                                                                                                                                                                 Oc tobe
                                                                                                                                                                                                                                                                                           r 2009 
                                                                                                                                                                                                                                                                                                     |  $10

            N E
      A Z I
M A G                                                                                                                                                                                 M A G A
                                                                                                                                                                                              Z I N E




                                                                                                         HUB
                                                                                                                                               Exchange o                                                    

                                                                                                                        �e
                                                                                                                                                          f I d e a s   |  July
                                                                                                                                                                                  /Aug ust 2009 
                                                                                                                                                                                                   |  $10.95 




                                                                                                            M A G A Z I N E




                                                                                                            THE HUB

                                                                                                             12
                                                                                                             TOP
                                                                                                              Shoppeng
                                                                                                                      r
                                                                                                              Marketi ce
                                                                                                              Excellen


                                                                                                               D   ay
                                                                                                          the
                                                                                                  s of
                                                                                           New
                                                                     Cool
                                                                 and
                                                        s   .com
                                              ev   erie
                                         of R
                                   ion
                       bl   icat
                  A pu

                                                                                                                                                                            A pub
                                                                                                                                                                                  li     catio
                                                                                                                                                                                               n of R
                                                                                                                                                                                                      ever      ies.c
                                                                                                                                                                                                                        om an
                                                                                                                                                                                                                              d Coo
                                                                                                                                                                                                                                    l    News
                                                                                                                                                                                                                                                 of th
                                                                                                                                                                                                                                                       e Da       y




                                                                                                             A publicati
                                                                                                                         on of Reve
                                                                                                                                    ries.com a
                                                                                                                                               nd Cool Ne
                                                                                                                                                          ws       of the Day




                                                                            Get the Hub!
                                                              Keep up with marketing’s
                                                              boldest and brightest.
                                                                                          Subscribe today.
                                      It’s easy. Just visit:
                              http://hubmagazine.com/subscribe
ROUNDTABL E




                                 Innovation just isn’t what it used to be.



                        Better Things
                           What are you trying                 up. Every single Staples store in        always been that it’s not innovative
                                                               the United States has easy-tech          if it’s a solution in search of a
                           to accomplish with                  technicians who can provide a free       problem. The goal of innovation is
                               innovation?                     tune-up of your PC.                      really to ferret out a keen insight,
                                                                                                        to deliver something that is
                       Claudia Poccia: With new products,      A product innovation is our Mailmate
                                                                                                        needed, wanted or lacking.
                       we constantly challenge ourselves       Shredder. Our customers were
                       to look outside of the cosmetic         opening their mail in their kitchens     The word “innovation” clearly is
                       industry into the broader landscape     but their shredders were in their        overused. So many people use it
                       of change. We try to leverage           offices. So, we made a shredder          as “give me something different
                       inspiration across the convergence      that’s just perfect for the kitchen.     to save me for six months” or
                       of media, technology and other          There are many more examples of          “something different for the sake of
A                      product forms.                          solving problems for customers           being different,” so that I can say
R oundtAble            We also engage with our customer
                                                               embedded in our culture.                 that I have fostered innovation.
F eAtuRing             or representative because, for the
Claudia Poccia
                       most part, she is one and the same.               We try to leverage inspiration across
                       That’s why bringing our product
Avon mark
                       to her, where she lives, and where                the convergence of media, technology
Jevin Eagle            she’s most receptive to receiving                       and other product forms.
Staples                our message, is so important.
                                                                                             C L Au DI A P o C C I A
Randy Carlson          We bring direct selling into the
Diageo                 digital age through social media and
                       other nascent technologies. We’re       Randy Carlson: The goal of               But innovation really is about
Jim Porçarelli         going to her in a place where she’s     innovation should be to bring new        paying attention and looking for
Active International   open to receiving our message and       ways to delight consumers that are       sometimes the simplest things that
                       engaging with our brand.                relevant for them. For Diageo, and       solve the issue in a way that no one
                                                               a lot of mature businesses, maybe        else has done before.
                       Jevin Eagle: At Staples, the goal
                                                               that’s more “renovation” than
                       of innovation is to provide customers
                       with value, product or an experience
                                                               “innovation,” but it’s really about        How do you create a 
                                                               breathing new life into our brands.
                       that solves a problem or helps make                                               culture of innovation?
                       their lives easier. That’s the link     Some people look at innovation
                       between the customer, the innova-       as inventing the un-invented. But        Poccia: Talent is the key ingredient
                       tion, Staples and its shareholders.     our obligation, as companies, is to      to creating a culture of innovation.
                                                               deliver business results. Inventing      If you have a team of forward-
                       For example, we offer free delivery
                                                               the un-invented is a nice, long-         thinking individuals who can
                       that, in almost all cases, arrives
                                                               term aspiration, but innovation had      look at things with a fresh, new
                       the next day. That would be an
                                                               better create revenues and profits.      lens, it creates an environment
                       experience innovation. A service
                                                                                                        that fosters innovation throughout
                       innovation is our free PC tune-         Jim Porçarelli: My mantra has




                       8   THE HUB  JANUARY/FEBRUARY 2010
the company. High emotional              Proven results are what get the organization
intelligence is also paramount.
                                                 gelled around innovation.
You need people with great,
cutting-edge ideas, but equally                                      R A N Dy C A R L S oN
important is a team that has the
ability to initiate and execute
                                      You also need an element of                In fact, she demands it. She inspires
those ideas in a strategic manner.
                                      pragmatism. Rather than just               us. She co-creates with us because
It’s important to build a team of
                                      thinking about an idea, you need           we’re both a brand and a channel.
creative thinkers who reach for
                                      to go and do it and focus on results.      So, whenever we ideate a product,
the stars, but also keep one foot
                                      Otherwise, your innovation is not          our favorite expression here is,
firmly planted on the ground so
                                      going to have a long life. Proven          “let’s take it to the Girl Lab.” That
that everything aligns with the
                                      results are what get the organization      means going to our consumer and
business objective.
                                      gelled around innovation.                  our representative and engaging
Eagle: We not only have a market                                                 her in the ideation and decision-
                                      Porçarelli: You have to give people
research department at Staples, but                                              making process up front.
                                      honest-to-goodness permission
also groups of people who are not
                                      to fail. If people aren’t afraid of        This co-creation partnership
exactly in “market research,” but
                                      making mistakes, they are going            enables us to bring forth products
are constantly doing, testing and
                                      to come up with more and more              that allow for our consumers’ and
trying new things. For example, we
                                      creative and interesting ideas.            representatives’ self-expression. So,
have what we call our “usability
                                                                                 she’s got a more immersive brand
group.” Their job is to observe how   You need people who say things that
                                                                                 experience at a higher level of
customers use things, either online   you hadn’t thought of yourself. If
                                                                                 emotional engagement with us.
or in person.                         people are just repeating everything
                                      I already know, they are not right         Eagle: I have a strong point-of-view
At any given time, we have
                                      for my team. Leaders need to allow         on this. We used to run a contest
dozens of tests going on of either
                                      themselves to be challenged by             at Staples called Invention Quest,
new products, new ways to display
                                      their teams.                               where we asked customers and
products or to develop offers. The
                                                                                 employees to create new product
culture when we go out into the       Managers have a responsibility
                                                                                 ideas. I’m so glad we did this — I
field is the culture of listening,    whenever someone comes to them
                                                                                 was one of the judges — but I don’t
whereas in traditional retail it’s    with an idea — no matter how big
                                                                                 think it was the most effective way
a culture of telling. We have         or how small — to sit with them
                                                                                 to get insights because customers
tremendous respect and awe for        and help tweak the idea until it
                                                                                 are not product developers.
our store managers, and when          works. It’s imperative to continue
they give us ideas we take            the conversation because it can            A better way to get customers
voracious notes.                      foster other ideas in other arenas         engaged is for us to listen to them.
                                      that will solve bigger problems.           How do you live your life? How do
Carlson: Innovation really starts
                                                                                 you work? How do you play? How
at the top. There may be a heretic
who’s trying to push innovations       How should consumers                      do you use products today? That’s
                                                                                 where the much bigger ideas come
uphill, but heretics have a very         be involved in the                      from. We listen, observe, and take
low probability of getting anything
                                        innovation process?                      it from there.
done without leadership support.
                                      Poccia: Bonding over beauty and            Carlson: For us, the involvement
Second, you need people who
                                      fashion fosters community and              is three-tier, including consumers,
believe in possibilities and are
                                      brings young women together.               customers and distributors. If you
willing to beat their heads against
                                      Because direct selling is inherently       have a brokered sales organization,
the wall. With innovation, you are
                                      participatory, it’s really natural for     you should include them, as well.
going to hear “no” a lot. You have
                                      us to engage with our customers            It’s critical.
to have people who are willing to
work in that kind of environment      and representatives to create a co-        I personally find that the trade —
and aren’t brought down by it.        branding experience.                       including distributors and sales




                                                                         JANUARY/FEBRUARY 2010  THE HUB               9
organizations — has a kind of
                                                      What is the most               taking any money you make and
“fingertip feel” for what’s right or                                                 applying it to lower prices, and
wrong with your product offerings.                    innovative idea                then focusing everything in your
It’s a great thing to get that kind of                  you’ve seen?                 culture on leveraging scale to get
feedback sooner than later.                                                          lower prices. I think Starbucks was
                                            Poccia: True innovators create           the first to not require a signature
On the other hand, your customers,          products or services that customers      at the register when you use your
your consumers or the trade are not         can personalize to meet their            credit card. That was brilliant.
going to come to you with the next,         needs. I find TiVo fascinating. For
big breakthrough idea. That’s just          decades, all of us were happy to         I do think that Staples’ ink
not going to happen. So, hopefully          view pre-determined and                  recycling program is breathtaking.
that’s where the innovator’s thinking       scheduled programming and then           We give three dollars back for
comes in. It’s really up to the             out of the blue comes TiVo.              every cartridge you bring back to
innovator to identify the problem                                                    recycle. This meets the customer’s
being solved, and how to solve it.          Now we have the power to                 need for doing something good for
                                            decide when we want to watch             the environment, while also giving
Porçarelli: First of all, their             this programming. This TV-by-            them money for it. We’re going to
involvement is about the due                appointment culture has created a        recycle more than 50 million ink
diligence of the marketer.                  seismic shift in consumers.              jet cartridges this year.
There’s so much information
and data available to us today,             Something that we’ve done at mark        Carlson: My favorite innovator
but you need to understand the              is a franchise called Hook Ups. Hook     right now is Tesla Motors.
attitudes, concerns and buying              Ups are dual ended, customizable         What Tesla has done is make a
behaviors that are intrinsic to your        makeup products for eyes, lips           completely electric car using cell-
consumers. So, don’t be afraid to           and cheeks. We provide a wide            phone battery technology. It’s the
preview ideas with your audience.           assortment of textures, tones and        same kind of battery you have in
                                            product forms. The consumer can          your Blackberry, just stacked up.
Procter & Gamble had a wonderful            put together over 2,000 combinations
formula where every single brand            and make it their own. That has          They make a sports car that’s
                                                                                     super light, looks a lot like the
                                                                                     Lotus, and can go from zero to 60
                                                                                     mph in 3.9 seconds, with a 250-
   The culture when we go out into the field is                                      mile range. It costs $100,000, but
 the culture of listening, whereas in traditional                                    it is twice as efficient as a Prius.
                                                                                     They are also making a 4-door
          retail it’s a culture of telling.                                          sedan for 2011 delivery.
                                  J E v I N E AgL E                                  What Tesla has done is turn the
                                                                                     efficiency issue on its ear. They’re
                                                                                     taking this notion of a car you
had to set aside a little bit of its        really gotten the industry’s attention   want to be in and the right thing
budget every year for testing — even        because it puts creativity in the        to be doing for the world, and
though they knew that 80 percent of         hands of the consumer.                   put them together. And they’ve
the results may not give them an                                                     actually executed it. It’s brilliant!
                                            Eagle: With Amazon, one innovation
insight worth acting on. But the
                                            was giving away shipping and             Porçarelli: There’s a product
other 20 percent was invaluable. As
                                            tying that to extremely low prices.      called New Energy Solutions — it’s
a result, they had the greatest insight
                                            Most business people would have          this pad that you can put on your
into the package-goods consumer.
                                            said “no” to that. Another innovation    dresser, and it charges all of your
While consumers generally don’t             was buying back used books and           electronic devices without having
really know what they do want,              then reselling them, which               to plug them in. That really adds
they pretty much know what they             GameStop does with games.                to your quality-of-life because
don’t want. By knowing what to                                                       they’ve solved an everyday
                                            At Walmart, the innovation
eliminate, it’s often a lot easier to                                                problem.
                                            was Sam Walton’s concept of
figure out what to offer.




10   THE HUB  JANUARY/FEBRUARY 2010
T HOUGHT L E ADER S




In a very different realm, there’s          for us — if not at the moment,
a technology in radiology called            then over the life of customer.
micro-bubbles that are injected
                                            There are plenty of things we do
into the bloodstream to take better
                                            where we’re not maximizing profits
“pictures” of a specific organ.                                                    -
                                            on a transaction basis, but we are
The idea is that if you inject the
                                            on a customer basis. That’s the key.                         CLAUDIA POCCIA is global
bubbles with chemotherapy, you
                                                                                                         president of mark, Avon’s trend
might be able to treat cancer more          For example, during back-to-
                                                                                                         beauty and fashion boutique brand,
effectively. It’s still being tested,       school season, we offered free
                                                                                                         where she is reinventing the direct
but could have a huge impact.               backpacks — 100 percent back in                              selling business model for the
                                            Staples rewards on any backpack.                             next generation by tapping into

      How do you                            Why did we do that? Not because
                                                                                                         the world of social media.

   measure the return                       we thought we were going to
                                                                                                         JEVIN EAGLE is executive vice
                                            make money that day. The
    on innovation?                                                                                       president of merchandising and
                                            innovation is in how we create                               marketing for Staples. Jevin was
Poccia: R.O.I., at mark, means              value for customers. It all comes                            a principal architect in developing
“Return On Innovation.” It’s a              back to our customer economics.                              the Staples brand promise to make
                                                                                                         buying office products easy.
metric for success that has never           Carlson: At Diageo, we have
been more critical to the bottom            business performance metrics
line. We measure it through our             that are attributed to innovation.                           RANDY CARLSON is global
most important asset, and that’s the        In fact, in our annual report,                               innovation director for Diageo.
mark representative. That’s because         half of our growth last year                                 Previously with Ralston Purina,
not only is she our consumer, but           came from innovation. It’s a real                            Tropicana and PepsiCo, Randy has
she’s also our retailer.                                                                                 a diverse perspective on common
                                            number. There’s real bookkeeping
                                                                                                         success factors for innovations
So, for us, the innovation imperative       and accounting associated with
                                                                                                         across marketplaces.
is to deliver an entrepreneurial            innovation that’s done both in
platform to this representative             aggregate and individually.
                                                                                                         JIM PORÇARELLI is chief strategy
                                                                                                         officer at Active International,
                                                                                                         a global marketing and business
   If people aren’t afraid of making mistakes,                                                           solutions firm. He can be reached at
                                                                                                         jporcare@activeinternational.com.
 they are going to come up with more and more
         creative and interesting ideas.
                               J I M P oRç A R E L L I



that reinvents direct selling for           In a broader context, your return          on innovation and reinventing
them, and allows them to play               on innovation requires short-term          themselves. Is there a return on
in a digital space through their            metrics in addition to the long-           innovation? You bet your life
social networking platform. As              term investments, and you have to          there is, because innovation is the
her engagement and connection               roll them up together. If you start        lifeblood of every business.
through these platforms rises, so           doing activity-based costing on each
                                                                                       There’s a huge return because
does her sales productivity. So, it         individual innovation, there will
                                                                                       innovation fosters innovation.
generates organic growth.                   be more things you kill than you
                                                                                       When someone comes up with an
                                            launch. When that happens, then
Eagle: Innovation is all about the                                                     innovative idea it becomes almost
                                            somebody else invents the future.
notion that if we do things for our                                                    addictive because as you begin to
customers that meet their needs,            Porçarelli: Without innovation,            have success with innovation you
they will reward us. Our underlying         a company will begin to die.               want to have more success, and more
assumption is that doing good               Great companies falter because             innovations follow. Innovation is its
things for customers is also good           they didn’t put enough emphasis            own impetus for greater innovation. n




                                                                              JANUARY/FEBRUARY 2010  THE HUB               11
RE SE ARCH REP ORT




  What makes a supermarket innovative? 
  Where would shoppers most like to see 
  innovation? Which supermarkets are 
  most innovative?
                                                         The New
                                                         How innovative is the supermarket you shop most often?
       Conventional wisdom has it that many — if
  not most — supermarkets haven’t changed much           Somewhat                                             55.0%
  for about 50 years. True, there’s more in the way
  of prepared meals. And the number of products          Very                        21.7%
  offered has grown. Store brands may have
  improved in quality, too.                              Not at all              17.1%
       But has the basic construct of aisles of
  ingredients really budged all that much? We put        Extremely               6.3%
  this question to Reveries.com readers and the
  answer came back somewhere down the middle:
  A majority of 55 percent said the supermarket
                                                         In which ways is your supermarket innovative?
  they shop most frequently is only “somewhat”
                                                         (pick as many as apply)
  innovative.
       As one respondent put it: “It seems grocery
                                                         Product Selection                                  54.3%
  retailers perceive innovation as being creative with
  inventory and don’t give enough consideration to       Prepared Foods                                 46.6%
  environment and space.”
       The only area a majority deemed innovative        Private Labels                           38.9%
  was “product selection” (54 percent), followed
  by “prepared foods” (47 percent) and “private          Store Layout                        31.7%
  labels” (39 percent).
       However, in nine out of ten areas, survey         Checkout                            31.7%

  more in the way of innovation: product selection;
  respondents suggested they would like to see
                                                         Customer Service                 29.8%
  format/store layout; checkout; customer service;
  promotions; new services; online tools; and
                                                         Promotions              17.3%
  displays. The only area shoppers indicated they
                                                         Displays                17.3%
  are satisfied is “private labels.”
       Online shopping tools appear to be especially
                                                         Online Tools         13.5%
  ripe for innovation, as an overwhelming majority
  of respondents (74 percent) said they do not use       New Services        12.0%
  retailer websites. An even larger majority of 80
  percent said they do not use “any other online
  planning tools for grocery shopping.”
       Some remarked that they weren’t aware that        How important is a supermarket’s prices versus its
  such tools exist, while others confirmed that this     innovations to you?
  may well be the case: “I wish I could get ads via
  my phone and use mobile coupons. I would also          Somewhat                                 39.6%
  love to be able to upload coupons to my loyalty
                                                         Very                                   37.1%
  card and not have to deal with paper coupons.”
       Frustrations were many, with crowded
                                                         Extremely                18.3%
  stores and slow checkouts being the most
  frequently cited complaints. Others aimed their        Not at all             5.0%
  ire at stores that rearrange aisles for no apparent
  reason: “Shuffling where categories are found,




12 THE HUB  JANUARY/FEBRUARY 2010
   THE HUB  JANUARY/FEBRUARY 2010
Super
Where would you most like to see innovation at your
supermarket? (pick as many as apply)
                                                             sometimes just from the right to the left are
                                                             annoyances, not innovations.”
                                                                  Self-checkouts also received mixed reviews.

                                                             others said they only benefit retailers. One
                                                             Some said they liked the convenience while

                                                             respondent had a similar complaint about store
                                                             formats: “I’m tired of grocery stores being laid out
                                                             to help the grocer and the vendors.”
Product Selection                                    51.5%        Overall, there was no shortage of suggestions
                                                             on where supermarkets could improve in ways
Store Layout                                         50.6%   both big and small:

Checkout                                     41.6%           “ Why can’t grocery bakeries make good,
                                                               healthful, preservative-free breads?”
Prepared Foods                         35.5%
                                                             “ This business of forcing me up and down aisles
                                                               and across the store to find the things I need is
Customer Service                     33.3%
                                                               tiresome and makes me tired and angry.”
Promotions                           31.6%                   “ I wish I didn’t have to go to three different stores
                                                               in order to supply our home.”
New Services                         31.6%
                                                             “ So many carts with wheels that don’t work right!”
Online Tools                     29.9%                             Despite such grievances, a perhaps surprisingly
                                                             large majority of 70 percent said they generally
Displays                       25.5%                         enjoy grocery shopping, especially discovering
                                                             new items. And even though most do not consider
Private Labels         15.2%
                                                             their supermarkets to be innovative, a plurality
                                                             of 43 percent felt their grocers were up-to-date.
                                                                   But as one respondent observed, the
In general, do you enjoy grocery shopping?                   innovations of the future may well be rooted
                                                             in the past: “I shop at a small, family-owned
Yes                                            70.3%         supermarket that prides itself on personal service.

                                                                   Another hinted that maybe it isn’t up to
                                                             Its innovation is old-fashioned customer service.”
No                    29.7%
                                                             supermarkets to be innovative at all: “Since I
                                                             purchase groceries from three stores and one farmer’s
                                                             market each month, maybe I’m the innovator.”
Overall, which era does the supermarket at which you
                                                                   And this comment may provide the greatest
usually shop most resemble?
                                                             insight of all: “Here’s the deal, when money is
2000s                                        42.7%           in short supply and entertainment dollars are
                                                             small or non-existent, grocery shopping becomes
1990s                        21.4%                           entertainment … When money is flowing and we
                                                             can eat out more often and I’m cooking less, then
1980s                11.5%                                   grocery shopping goes back to being a chore.”
                                                                   The supermarket picked at the number-one
2010s & beyond      10.7%                                    most innovative? Whole Foods, followed by Trader
                                                             Joe’s and Wegmans. Curiously, nowhere near as

                                                             the supermarkets they shop most frequently. n
1970s               7.7%                                     many respondents selected these same stores as

1950s                 3.8%
                                                             Complete survey results can be found at:
1960s                2.1%                                    www.hubmagazine.com/survey/supermarkets




                                                                       JANUARY/FEBRUARY 2010  THE HUB 13
                                                                        JANUARY/FEBRUARY 2010  THE HUB
SURVE Y ANALY S I S




        Supermarket
           Savvy
         T
                      he latest Reveries.com survey asked a                          I m pl I c at I o n s : Improve navigation — beginning
                      savvy shopping crowd whether today’s                     in the parking lot and continuing through the store
                      supermarkets are innovative. What we                     and checkout. Create a shopper-centric store layout
                      heard back was how shoppers want us to                   with intuitive assortments and adjacencies in an
                      innovate today’s shopping experience.                    uncluttered environment.
             What do they want? Well, as one respondent                             Fix the broken carts. Smooth the checkout
         succinctly said, “I want it all.” And today, to get it all,           experience — if not with technology with good, old
         shoppers go everywhere.                                               fashioned, helpful, happy, engaged employees.
             When asked, our shoppers reported that they                            Relevant Rewards. This means delivering more
         patronize an average of three different supermarkets,                 than price incentives in a format that is relevant to
         making one or two trips per week. But that’s not                      today’s shoppers. It is about innovating both in terms
         the whole story. When we dig into where they are                      of content and delivery. It is about informing and
         shopping, we unearth an eclectic, channel-blurring                    motivating shoppers along their paths-to-purchase.
                                                                                     I m pl I c at I o n s : Provide relevant, convenient
                                                                               rewards and tools that are customized to shoppers’
Innovative supermarkets tap into                                               needs and localized to their markets. It is about
                                                                               consistently reinforcing that membership in retail
emotional and functional desires.                                              reward programs has privileges.
                                                                                    To do this, retailers need to build in additional
                                                                               value and convenience. To help communicate, augment
         list that includes traditional supermarkets, specialty                outbound retail email campaigns with innovative
         stores, club, mass and drug.                                          product information, planning tools, recipes and a link to
               What drives them? From a functional perspective,                coupons. Consider extending to mobile applications.
         shoppers want:                                                             From an emotional perspective, shoppers connect
               Product selection. Provide affordable, one-stop                 with retailers and brands that:
         shopping without sacrifices. This starts with providing                    Understand them by having the right assortment,
         quality produce — including both local and organic                    right offers and then something extra. Strive to
         choices. It extends to value-added product options,                   understand the cooking-shopping-nurturing connection
         with shoppers looking for specialty, gourmet and                      that drives both the function and emotion around
         prepared-foods offerings.                                             many shopping trips. Don’t underestimate shopper
                I m pl I c at I o n s : Provide an array of quality products   commitment to more sustainable and green solutions,
         that meet their needs and their wants to build baskets.               even in a down economy.
         Be consistent in your product offerings and eliminate                       I m pl I c at I o n s : Understand your shoppers and
         the critical out-of-stocks that drive shoppers out of                 their preferences. Become a resource for more than
         your store.                                                           merchandise, and become a partner that helps provide
               Convenience. It’s not all about location, location,             innovative solutions that entertain and nurture their
         location. It is about time: Get shoppers in, get them                 families.
         out — fast, with everything on their list. Provide them                    Engage them personally with communications
         with helpful and happy personal service.                              that inform and educate — before and during the




         14    THE HUB  JANUARY/FEBRUARY 2010
shopping trip. Shoppers are looking for information
that provides ideas and inspiration. Ask them their
opinions!                                                             Truly Super Markets
      I m pl I c at I o n s : Understand your shoppers’ paths-
to-purchase and engage them along the way. Don’t                      In survey respondents’ own words, here’s what
undervalue the role of personal service. Create simple,               makes supermarkets super:
relevant planning tools that integrate with how                       Whole Foods: Product Selection; Convenience
they plan today. Engage them visually in-store with                   (Store Layout and Service); Engagement
attractive displays and signage — remembering that                    (Communications and Causes).
value is much more than price.
     Entertain them. Take the mundane out of the                      Trader Joes: Product Selection; Convenience
shopping experience — make shopping an event. You                     (Checkout and Service); Entertainment
have a live audience. Make it fun for them and for                    (Sampling and Surprises).
family members in tow.                                                Wegmans: Shopping Experience; Product
      I m pl I c at I o n s : Add music, demonstrations,              Selection; Convenience (Layout and Signage);
sampling, wine tastings, product specialists and good,                Engagement (Communications, Causes, Recipes
old-fashioned customer service to add a personal                      and Service); Entertainment (Sampling).
element. Introduce them to new products and invite
                                                                      Tesco Fresh & Easy: Product Selection;
them to explore.
                                                                      Convenience (Checkout Options and Layout);
     Success requires solutions that drive the mutual
                                                                      Engagement (Social Media).
goals of both the retailer and the manufacturer. This
means listening to the shopper and delivering against
multiple shopper needs.
     Manufacturers need to find connecting points
between their brands and the retailer. If your                        Build programs to deliver against shoppers’
product benefit is about convenience or speed, partner           multiple needs. For example, when we create
with retailers to deliver convenient solutions and               programs that inform and educate (e.g., recipes, meal
services. For example: This checkout or checker                  plans, activities, in home entertaining tips, healthy
brought to you by Brand X.                                       living guides, etc.) We show that we understand that
     If your product makes folks smile, sponsor an               our shoppers are looking for ideas and solutions.
employee recognition program that delivers improved                   When these ideas include complimentary (and
customer service that engages shoppers and improves              potentially private-label) products, we are building
convenience. If your brand entertains, find a way to             baskets in a way that leverages the retailer’s product
bring that into store in a way that builds on both the           selection. When we overlay incentives in a tips booklet,
brand and retail platform.                                       or through shopper targeting, we are providing relevant
     Listen to the voice of the shopper and understand           rewards.
the impact of changing shopper behavior. Irrespective                 By collaborating with retailers to develop in
of any shortcomings, 70 percent of our survey                    store “solution centers” with attractive fixtures and
respondents say they like shopping and discovering               informative signage, we maximize convenience while
new things.                                                      engaging shoppers. Add an educated, animated
     So, create events that encourage shoppers to go             demonstrator, and we entertain the shopper, as well.
on a “treasure hunt.” Purposefully drive consumers               When we bring these elements together, we are on the
throughout the store to fulfill their missions to discover       road to true super marketing. n
something new — it both engages and entertains.
     Shoppers are pre-planning as never before, but
according to this survey 60 percent of them are                                      RANDI MOORE is vice-president
not using retail circulars and 74 percent are not                                    and account director with
leveraging retail websites.                                                          Marketing Drive. She leads the
     Engage consumers where they plan by integrating                                 agency’s shopper-marketing
into relevant online activities like popular cooking                                 practice. Randi can be reached at
                                                                                     randi.moore@marketingdrive.com.
(Epicurious, Food Network) and couponing sites to
build on planning behavior.




                                                                             JANUARY/FEBRUARY 2010  THE HUB              15
WHI T E PAPER




             Map the
                Gap                               By Vinit DoShi
                                        h e n r y r a k c o n S u l t i n g Pa r t n e r S




T
          he real story behind the growth of store brands is less often about price gaps 
          than the shrinking value gap between national and store brands. This narrowing 
          value gap is real, and marketers anticipating an economic recovery to lift their 
          sales in a “rising tide” effect are bound to be disappointed.

     Consumers are fundamentally changing their                    consumer behavior that holds as true today as ever:
attitudes towards more conscientious consumption                   National brand manufacturers need to innovate across
on matters of environment, health and value. The                   the entire value bundle that comprises the brand —
heightened importance of value-for-money is leading                positioning, product, packaging, pricing, etc. — in
them to rethink their attitudes and behaviors                      order to deliver relevant benefits to the right targets in
concerning the value of branded products and the                   a superior way and align with consumers’ needs and
price premiums they are willing to pay for frequently              desired benefits.
consumed necessities.                                                   Mature markets demonstrate these principles
                                                                   of consumer preferences all the time. In the last
                                                                   five years, for example, marketers have successfully
      Winning at retail                                            tapped into consumers’ health and wellness needs
                                                                   with a variety of innovatively-positioned and
     requires innovation                                           precisely-targeted beverage products that promise
                                                                   to deliver specific functional benefits such as quick
       across bundles                                              and lasting energy, meal replacement, or vegetable
                                                                   nutrition — often to selected targets during specific
      of brand benefits.                                           parts of the day.
                                                                        These consumer preferences lead to consistent
                                                                   behaviors that collectively create markets organized
     The trend is further reinforced by better consumer            around bundles of relevant benefits. This results in
perception of store brands, backed by improvements                 product groupings that deliver primarily against one
in the quality and range of these products (according              of those benefit areas and compete closely with other
to a recent study, 70 percent of millennial women                  products in the same group.
perceive the quality of store brands to be “excellent”).                Regardless of the market, price-value invariably
This portends the potential continuation of store                  manifests itself somewhere in the structure, although
brand sales and share growth, and a steep challenge                the role of price-value relative to the role of brand
to the growth of branded products.                                 varies considerably across different markets. The
     To look for answers, we turn to a key principle of            price-value dynamic depends on the importance and




16   THE HUB  JANUARY/FEBRUARY 2010
types of consumer needs, nature of product usage,                A market map provides a precise understanding
role of trust and imagery in the category, the presence     of how consumers are behaving, for what reasons,
and strength of dominant brands and levels of               and with what trade-offs. It is a proven platform for
marketing and innovation.                                   evaluating and predicting the impact of different
     Ultimately, however, the price-value relationship      marketing strategies. As such, it is an essential
depends on how well marketers have managed to define        foundation for managing a brand to a better outcome.
and deliver relevant benefits. In some cases, marketers          Unfortunately, many organizations do not fully
have created benefit-structured markets based on years      appreciate or understand the power of a correct,
of advertising, innovation, and effective positioning       precise, and behaviorally-based understanding of
against relevant functional and emotional benefits.         their market. Too often, a brand’s competitive frame is
     In these situations, brands or brand groups play a     based on category definitions, consumers’ opinions, or
significant higher-order role in which they effectively     a less-than-rigorous evaluation of consumer behavior.
stand for and own key benefits to the exclusion of               As a result, the hierarchy of benefits may be
other brands. Store brands may play a smaller role —        out of order, or the spheres of influence through
existing but interacting in an undifferentiated way —       which consumers make choices and trade-offs may
or in a limited way that does not preclude the growth of    be misrepresented. Managing a brand with a flawed
branded players. The example of soy milk demonstrates       understanding of the market is bound to inhibit or
how branded products used precise positioning,              even derail growth.
marketing, and innovation to establish and own a value-          So, the first challenge is to understand how the
added position as a tasty, healthy, nutritious, dairy-      market is organized, what your brands really compete
free alternative to conventional milk, leaving behind       with, and on what basis. After developing a precise,
the commodity dynamics of the dairy milk category.          behavior-based understanding of the market, you
     At the other extreme, markets that lack meaningful     are ready to understand how to guide your brands
differentiation of relevant benefits to consumers,          to more advantageous positions of sustainable and
significant marketing, and effective innovation,            profitable growth. You can also identify and prioritize
predictably degrade into attribute-driven markets in        the most viable innovation opportunities among many
which form, flavor, price-tiers, or easily replicable       seemingly reasonable options.
factors become the primary organizing principle of
the market (for example, conventional dairy milk).          Finding growth opportunities
     In such cases, national brands often play a                 The logical first place to look for growth is among
weakened role in the structure, and store brands do         your established brands in their current, competitive
well as consumers reward the brands that deliver the        frames-of-reference. In some cases, a brand may have
only differentiating benefit of relevance — price-value.    significant upside potential in terms of consumer
     Most markets fall into a continuum between these       behavior that can be accessed. Well-differentiated
extremes in which many national brands are fighting a       brands often find that their strong loyalty puts them
losing battle, struggling to stem losses or eke out small   in the enviable position of being able to bring in new
gains. Some are dealing with the added burden of budget     buyers or increase usage simply by increasing media
cuts and cost reductions that affect product quality.       spending.
All the while, store brands are racking up growth.               More often than not, however, brands have not
     Fortunately, the picture is not all gloom-and-doom     fully optimized their potential from a positioning
for marketers of national brands. If they are committed     standpoint. Many brands may be competing in an
to understanding and leveraging the principles of           undifferentiated way with other brands, representing
consumer preferences and benefit-structured markets,        the same benefits to the same consumers in more or
they have good reason for optimism. In a previous           less similar ways.
issue of The Hub, my colleague Eric Greifenberger                Insights based on the market map can provide
introduced the concept of a market map (see: Map the        a breakthrough understanding of how to deliver the
Market, July/August, 2009).                                 functional and emotional benefits of a market in a




                                                                        JANUARY/FEBRUARY 2010  THE HUB           17
Concentric spheres of competitive interaction illustrate
                        the range of competition from close-in to furthest-out




                   Fruit-flavor    All flavors of     Desserts/         Desserts in other
                    Ice Cream       Ice Cream        Sweet treats          situations




                                                                        S o u r c e : Henry Rak Consulting Partners




more compelling, effective or different way. Or, it       differentiated itself as a high-quality, more effective
can show how to expand the benefit appeal to more         laundry care product. Chanel owns a certain mystique
consumers, or across more occasions.                      in perfumes and luxury accessories. Victoria’s Secret
     In recent years, some brands have leveraged          and Starbucks have come to stand for distinct benefits
consumer trends by emphasizing the simplicity and         to selected consumers that allow each to transcend the
freshness of their ingredients to consumers who are       products themselves to own an experience.
most motivated by health and wellness. One particular          An integrated view of the market with consumer
brand of lunch and dinner products has done well by       needs and usage behaviors can also help identify
elevating its appeal from basic product attributes to a   emerging opportunities to meet unaddressed or
sharper connection with old-world Italian sentiments.     unknown needs. The bigger and further out the idea,
In other cases, positioning a brand to bridge multiple    the more likely it is to require significant product
benefits has proven effective in improving relative       innovation. The process begins by examining the
value perceptions versus store brands.                    different needs that people experience across occasions
     A market map represents “concentric spheres          and their satisfaction with the current solutions, all of
of consumer interaction,” in which each sphere            which helps identify problem areas and gaps.
represents gradually broader sets of needs being met           For example, the basic “hydration” benefit of
by a wider array of competitors (see chart). In this      beverages has been redefined and segmented to meet
sense, a brand can look for growth by extending its       different nuances of the basic need, including portable
positioning to stand for something bigger and broader.    hydration for everyone/everywhere/anytime (bottled
     Taken to its logical conclusion, such brands can     water), hydration with replenishment (isotonics),
begin to own a “benefit platform” to a sufficiently       hydration with nutritional benefits (vitamin and
distinct degree that they command greater loyalty and     enhanced waters), and so forth.
source volume from brands in other segments of a               Exploiting the sufficiently large and viable white-
market. This is known as “partitioning the market.”       spaces can sometimes provide more significant and
     A brand that has partitioned the market is           sustainable growth opportunities than battling for
characterized not only by strong market-share, but        share within crowded areas of the market. Effective
also by strong loyalty and a price premium. Tide has      innovation requires brands to extend their positioning




18   THE HUB  JANUARY/FEBRUARY 2010
platforms and equities to reach further out (or develop   competitive frame includes Subway and Quiznos,
new brands), secure larger marketing budgets, and         then product testing on that brand should include
manage to a longer-term investment horizon.               the sandwich chains’ products. Following that,
     An effective portfolio plan that balances risks      simulating the trade-offs between different levels of
and rewards by optimizing the shorter-term and            product positioning, quality, pricing, and margins can
longer-term opportunities of established brands and       provide management a quantitative range of options to
innovation simultaneously, can enjoy significant          factually determine what size business is most viable
competitive advantages and drive sustainable growth.      from a total perspective of volume, revenue and margin.
                                                               Drive ROI at the Expense of Growth. Optimizing
Av o i d Q u i c k F i x e s                              the marketing mix is a powerful way to understand the
     Having examined some examples of how to              drivers of the business, to quantify what works and
use the market map to one’s advantage, it is equally      what doesn’t, and to evaluate the mix of tactics and
important to note some principles of what not to do,      campaigns. However, when used in an isolated fashion
or what to avoid as singular quick-fixes.                 to reduce costs or improve ROI without effective growth
     Fight Fire with Fire. The temptation to fight        strategies to guide the decisions, such “optimization”
store brand growth by “right-pricing” the brand, or       does nothing more than facilitate a more efficient
increasing price promotion, may yield short-term          deterioration of the brand (using proven tactics to do it!).
relief. However, unless the brand aspires to become            Of course, continuous improvement in execution
just like a store brand, this is unlikely to drive        is important, but effective marketers seldom use the
profitable, long-term growth. It may even focus the       efficiencies only to cut costs, reduce risk, or make
brand on fighting an unwinnable battle in the wrong       minor corrections to the mix. Effective marketers
part of the competitive frame.                            use it primarily to fund their most promising top-line
     That said, pricing and promotion clearly play        growth strategies — and to do it smarter along the way.
critical roles in the overall marketing mix. Our
                                                                                     •••
recommendation is to simulate and test pricing and
promotion strategies. This should be done as part of a         Marketers need a precise, fact-based understanding
comprehensive growth strategy in which these levers       of the market to determine the linkage between consumer
play a precise supporting role to the main storyline of   needs, benefits and behaviors. Knowing the basis of
a consumer benefit-centered strategy.                     competition is critical, not only against store brands,
     Undermine Product Effectiveness. Every               but against the entire relevant frame of reference.
promising strategy is ultimately predicated on the             A market map is a dynamic reflection of the ever-
assumption that the product must deliver on consumer      changing ways that consumers prioritize needs and
expectations. Reducing costs to improve margin can        organize behavior. With this knowledge, the marketer
be risky. For some brands, years of small, seemingly      will understand the benefits a brand should reasonably
innocuous cost reductions affecting ingredients,          strive to own through positioning and innovation.
packaging, amount, and quality have compounded                 Markets can be changed by the actions or inactions
themselves into noticeable changes in overall product     of marketers — to the benefit of some brands and the
appeal. It is clear that the growth of store brands       detriment of others. Only the fittest will survive. n
in several categories is due to years of gradual cost
reductions by the branded products.
     Without meaningful product differentiation                                VINIT DOSHI is a principal with Henry
versus store brands, justifying a price advantage                              Rak Consulting Partners, a growth-
becomes difficult for a branded product. For this                              strategy consulting firm. Vinit can be
reason, we recommend testing for relative product                              reached at vdoshi@hrcpinsights.com
preference in the context of a brand’s full competitive                        or (203) 540-5524. To learn more about
                                                                               HRCP, visit www.hrcpinsights.com.
frame-of-reference.
     For example, if a frozen sandwich brand’s true




                                                                      JANUARY/FEBRUARY 2010  THE HUB                    19
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34
The HubMagazine #34

Más contenido relacionado

La actualidad más candente

Cannes resume sem videos
Cannes resume sem videosCannes resume sem videos
Cannes resume sem videosLuiz Masagao
 
The Pop Up Store - Vector for Customer Engagement
The Pop Up Store - Vector for Customer EngagementThe Pop Up Store - Vector for Customer Engagement
The Pop Up Store - Vector for Customer EngagementDaniel Dutesco
 
The Innovation HitList: If You're A Startup Looking To Work With Brands, Thes...
The Innovation HitList: If You're A Startup Looking To Work With Brands, Thes...The Innovation HitList: If You're A Startup Looking To Work With Brands, Thes...
The Innovation HitList: If You're A Startup Looking To Work With Brands, Thes...Partnered
 
Leo-Burnett!
Leo-Burnett!Leo-Burnett!
Leo-Burnett!mridu2903
 
Pop Idol as Your Business Model
Pop Idol as Your Business ModelPop Idol as Your Business Model
Pop Idol as Your Business ModelPaul Marsden
 
SID LEE | Conversational capital
SID LEE | Conversational capitalSID LEE | Conversational capital
SID LEE | Conversational capitalSid Lee
 
Urban Lifestyle Report - New Media (Oct 08)
Urban Lifestyle Report - New Media (Oct 08)Urban Lifestyle Report - New Media (Oct 08)
Urban Lifestyle Report - New Media (Oct 08)Urban Lifestyle
 
Kapow Software Robots Help Luxury Travel Site Jetsetter Track and Stay Ahead ...
Kapow Software Robots Help Luxury Travel Site Jetsetter Track and Stay Ahead ...Kapow Software Robots Help Luxury Travel Site Jetsetter Track and Stay Ahead ...
Kapow Software Robots Help Luxury Travel Site Jetsetter Track and Stay Ahead ...Dana Gardner
 
Urban Lifestyle Report - New Media (Aug 08)
Urban Lifestyle Report - New Media (Aug 08)Urban Lifestyle Report - New Media (Aug 08)
Urban Lifestyle Report - New Media (Aug 08)Urban Lifestyle
 
The 2011 Digital Outlook
The 2011 Digital Outlook The 2011 Digital Outlook
The 2011 Digital Outlook Engauge
 
H&m proposal by miki sim
H&m   proposal by miki simH&m   proposal by miki sim
H&m proposal by miki simAPSOTW
 
BrandSmart 2011 Presentation Line-up
BrandSmart 2011 Presentation Line-upBrandSmart 2011 Presentation Line-up
BrandSmart 2011 Presentation Line-upChicago AMA
 
What is consumer insight in advertising?
What is consumer insight in advertising?What is consumer insight in advertising?
What is consumer insight in advertising?Aleksas Drozdovskis
 
Gen Z: The Future of Retail at Cosmoprof NA
Gen Z: The Future of Retail at Cosmoprof NAGen Z: The Future of Retail at Cosmoprof NA
Gen Z: The Future of Retail at Cosmoprof NAFITCH
 
(Graham Brown mobileYouth) #Trends 10 Key Youth Marketing Concepts Explained
(Graham Brown mobileYouth) #Trends 10 Key Youth Marketing Concepts Explained(Graham Brown mobileYouth) #Trends 10 Key Youth Marketing Concepts Explained
(Graham Brown mobileYouth) #Trends 10 Key Youth Marketing Concepts ExplainedGraham Brown
 

La actualidad más candente (18)

Cannes resume sem videos
Cannes resume sem videosCannes resume sem videos
Cannes resume sem videos
 
Are You Experienced?
Are You Experienced?Are You Experienced?
Are You Experienced?
 
The Pop Up Store - Vector for Customer Engagement
The Pop Up Store - Vector for Customer EngagementThe Pop Up Store - Vector for Customer Engagement
The Pop Up Store - Vector for Customer Engagement
 
The Innovation HitList: If You're A Startup Looking To Work With Brands, Thes...
The Innovation HitList: If You're A Startup Looking To Work With Brands, Thes...The Innovation HitList: If You're A Startup Looking To Work With Brands, Thes...
The Innovation HitList: If You're A Startup Looking To Work With Brands, Thes...
 
Leo-Burnett!
Leo-Burnett!Leo-Burnett!
Leo-Burnett!
 
Pop Idol as Your Business Model
Pop Idol as Your Business ModelPop Idol as Your Business Model
Pop Idol as Your Business Model
 
SID LEE | Conversational capital
SID LEE | Conversational capitalSID LEE | Conversational capital
SID LEE | Conversational capital
 
Urban Lifestyle Report - New Media (Oct 08)
Urban Lifestyle Report - New Media (Oct 08)Urban Lifestyle Report - New Media (Oct 08)
Urban Lifestyle Report - New Media (Oct 08)
 
Kapow Software Robots Help Luxury Travel Site Jetsetter Track and Stay Ahead ...
Kapow Software Robots Help Luxury Travel Site Jetsetter Track and Stay Ahead ...Kapow Software Robots Help Luxury Travel Site Jetsetter Track and Stay Ahead ...
Kapow Software Robots Help Luxury Travel Site Jetsetter Track and Stay Ahead ...
 
Urban Lifestyle Report - New Media (Aug 08)
Urban Lifestyle Report - New Media (Aug 08)Urban Lifestyle Report - New Media (Aug 08)
Urban Lifestyle Report - New Media (Aug 08)
 
The 2011 Digital Outlook
The 2011 Digital Outlook The 2011 Digital Outlook
The 2011 Digital Outlook
 
H&m proposal by miki sim
H&m   proposal by miki simH&m   proposal by miki sim
H&m proposal by miki sim
 
BrandSmart 2011 Presentation Line-up
BrandSmart 2011 Presentation Line-upBrandSmart 2011 Presentation Line-up
BrandSmart 2011 Presentation Line-up
 
What is consumer insight in advertising?
What is consumer insight in advertising?What is consumer insight in advertising?
What is consumer insight in advertising?
 
Gen Z: The Future of Retail at Cosmoprof NA
Gen Z: The Future of Retail at Cosmoprof NAGen Z: The Future of Retail at Cosmoprof NA
Gen Z: The Future of Retail at Cosmoprof NA
 
Activate The Market
Activate The MarketActivate The Market
Activate The Market
 
(Graham Brown mobileYouth) #Trends 10 Key Youth Marketing Concepts Explained
(Graham Brown mobileYouth) #Trends 10 Key Youth Marketing Concepts Explained(Graham Brown mobileYouth) #Trends 10 Key Youth Marketing Concepts Explained
(Graham Brown mobileYouth) #Trends 10 Key Youth Marketing Concepts Explained
 
Creative Index 2012
Creative Index 2012Creative Index 2012
Creative Index 2012
 

Destacado

Suri trabajo de redes
Suri trabajo de redesSuri trabajo de redes
Suri trabajo de redessurama18
 
Science In Sl Short Notes
Science In Sl   Short   NotesScience In Sl   Short   Notes
Science In Sl Short NotesKate Farrell
 
Balneario de Zújar
Balneario de Zújar Balneario de Zújar
Balneario de Zújar morafines
 
Reflections, New Methodologies, and Thought Processes
Reflections, New Methodologies, and Thought ProcessesReflections, New Methodologies, and Thought Processes
Reflections, New Methodologies, and Thought ProcessesBabu George
 
Non Violence And Peace Day 1
Non Violence And Peace Day 1Non Violence And Peace Day 1
Non Violence And Peace Day 1pepeperoxil
 
Hoja de vida
Hoja de vidaHoja de vida
Hoja de vidaecpb23
 
Programa ADIVAC 2012
Programa ADIVAC 2012Programa ADIVAC 2012
Programa ADIVAC 2012jehu
 
Efektivni vyvoj webovych aplikaci v Ruby on Rails (Webexpo)
Efektivni vyvoj webovych aplikaci v Ruby on Rails (Webexpo)Efektivni vyvoj webovych aplikaci v Ruby on Rails (Webexpo)
Efektivni vyvoj webovych aplikaci v Ruby on Rails (Webexpo)Karel Minarik
 
Catalogue accessoires 4x4 nissan x trail 09-2010
Catalogue accessoires 4x4 nissan x trail 09-2010Catalogue accessoires 4x4 nissan x trail 09-2010
Catalogue accessoires 4x4 nissan x trail 09-2010autoprestige
 
FokusLeasingFleet_Juni2016
FokusLeasingFleet_Juni2016FokusLeasingFleet_Juni2016
FokusLeasingFleet_Juni2016Yannick Depr
 
Amexco kundenanlass 111122 version3
Amexco kundenanlass 111122 version3Amexco kundenanlass 111122 version3
Amexco kundenanlass 111122 version3Travelbrain GmbH
 
Presentación entrenadores (pps)
Presentación entrenadores (pps)Presentación entrenadores (pps)
Presentación entrenadores (pps)Andreu Ore
 
Que es cloud computing ?
Que es cloud computing ?Que es cloud computing ?
Que es cloud computing ?Darvin Otero
 
Presentación de empresa TECNOMUNDO S.A
Presentación de empresa TECNOMUNDO S.APresentación de empresa TECNOMUNDO S.A
Presentación de empresa TECNOMUNDO S.AMonroy03
 
Rockscripts Instalacion de plantilla | Readme file | plantilla para tienda en...
Rockscripts Instalacion de plantilla | Readme file | plantilla para tienda en...Rockscripts Instalacion de plantilla | Readme file | plantilla para tienda en...
Rockscripts Instalacion de plantilla | Readme file | plantilla para tienda en...Alexandre Rivera
 

Destacado (20)

Suri trabajo de redes
Suri trabajo de redesSuri trabajo de redes
Suri trabajo de redes
 
Cold Chain Logistics
Cold Chain LogisticsCold Chain Logistics
Cold Chain Logistics
 
Science In Sl Short Notes
Science In Sl   Short   NotesScience In Sl   Short   Notes
Science In Sl Short Notes
 
Como Vender con YouTube Marketing
Como Vender con YouTube MarketingComo Vender con YouTube Marketing
Como Vender con YouTube Marketing
 
Balneario de Zújar
Balneario de Zújar Balneario de Zújar
Balneario de Zújar
 
Reflections, New Methodologies, and Thought Processes
Reflections, New Methodologies, and Thought ProcessesReflections, New Methodologies, and Thought Processes
Reflections, New Methodologies, and Thought Processes
 
Non Violence And Peace Day 1
Non Violence And Peace Day 1Non Violence And Peace Day 1
Non Violence And Peace Day 1
 
Hoja de vida
Hoja de vidaHoja de vida
Hoja de vida
 
Programa ADIVAC 2012
Programa ADIVAC 2012Programa ADIVAC 2012
Programa ADIVAC 2012
 
Efektivni vyvoj webovych aplikaci v Ruby on Rails (Webexpo)
Efektivni vyvoj webovych aplikaci v Ruby on Rails (Webexpo)Efektivni vyvoj webovych aplikaci v Ruby on Rails (Webexpo)
Efektivni vyvoj webovych aplikaci v Ruby on Rails (Webexpo)
 
Catalogue accessoires 4x4 nissan x trail 09-2010
Catalogue accessoires 4x4 nissan x trail 09-2010Catalogue accessoires 4x4 nissan x trail 09-2010
Catalogue accessoires 4x4 nissan x trail 09-2010
 
Infographie I Les français et le casual gaming
Infographie I Les français et le casual gamingInfographie I Les français et le casual gaming
Infographie I Les français et le casual gaming
 
FokusLeasingFleet_Juni2016
FokusLeasingFleet_Juni2016FokusLeasingFleet_Juni2016
FokusLeasingFleet_Juni2016
 
Amexco kundenanlass 111122 version3
Amexco kundenanlass 111122 version3Amexco kundenanlass 111122 version3
Amexco kundenanlass 111122 version3
 
Presentación entrenadores (pps)
Presentación entrenadores (pps)Presentación entrenadores (pps)
Presentación entrenadores (pps)
 
Que es cloud computing ?
Que es cloud computing ?Que es cloud computing ?
Que es cloud computing ?
 
Presentación de empresa TECNOMUNDO S.A
Presentación de empresa TECNOMUNDO S.APresentación de empresa TECNOMUNDO S.A
Presentación de empresa TECNOMUNDO S.A
 
Rockscripts Instalacion de plantilla | Readme file | plantilla para tienda en...
Rockscripts Instalacion de plantilla | Readme file | plantilla para tienda en...Rockscripts Instalacion de plantilla | Readme file | plantilla para tienda en...
Rockscripts Instalacion de plantilla | Readme file | plantilla para tienda en...
 
Pasaporte Semana Santa 2013
Pasaporte Semana Santa 2013Pasaporte Semana Santa 2013
Pasaporte Semana Santa 2013
 
Rock and wall fountains kansas city 816 500-4198
Rock and wall fountains kansas city 816 500-4198Rock and wall fountains kansas city 816 500-4198
Rock and wall fountains kansas city 816 500-4198
 

Similar a The HubMagazine #34

Working with Uncertainty
Working with UncertaintyWorking with Uncertainty
Working with UncertaintyPaul McEnany
 
Future Brand scape - Webbdagarna i Malmö
Future Brand scape - Webbdagarna i MalmöFuture Brand scape - Webbdagarna i Malmö
Future Brand scape - Webbdagarna i MalmöCreuna Sverige
 
Future Brand scape - Webbdagarna in Malmö on the 24th of october
Future Brand scape - Webbdagarna in Malmö on the 24th of octoberFuture Brand scape - Webbdagarna in Malmö on the 24th of october
Future Brand scape - Webbdagarna in Malmö on the 24th of octoberMichael Ericsson
 
What We Learned at ANA 2015 Masters of Marketing
What We Learned at ANA 2015 Masters of MarketingWhat We Learned at ANA 2015 Masters of Marketing
What We Learned at ANA 2015 Masters of MarketingMatt Duchesne
 
Creative Disruption - A Visual Résumé
Creative Disruption - A Visual RésuméCreative Disruption - A Visual Résumé
Creative Disruption - A Visual RésuméThomas Fiehn
 
2009trendwatch Sparxoo Emerging
2009trendwatch Sparxoo Emerging2009trendwatch Sparxoo Emerging
2009trendwatch Sparxoo Emergingkath1849
 
Mac Innis Marketing Presentation
Mac Innis Marketing PresentationMac Innis Marketing Presentation
Mac Innis Marketing PresentationMacInnis Marketing
 
Hhcl how to write a creative brief
Hhcl how to write a creative briefHhcl how to write a creative brief
Hhcl how to write a creative briefRob Campbell
 
limited brands annual report 1998_full
limited brands annual report 1998_fulllimited brands annual report 1998_full
limited brands annual report 1998_fullfinance26
 
2009 Emerging Trends Sparxoo
2009 Emerging Trends Sparxoo2009 Emerging Trends Sparxoo
2009 Emerging Trends SparxooSparxoo
 
The Business of creativity
The Business of creativity  The Business of creativity
The Business of creativity Utopia
 
Customer experience design truths
Customer experience design truthsCustomer experience design truths
Customer experience design truthsDave Wieneke
 
Trends Influencing Traditional Approaches to Marketing
Trends Influencing Traditional Approaches to MarketingTrends Influencing Traditional Approaches to Marketing
Trends Influencing Traditional Approaches to MarketingInitiative
 
Brand experience and marketing trends from Cannes Lions 2014
Brand experience and marketing trends from Cannes Lions 2014Brand experience and marketing trends from Cannes Lions 2014
Brand experience and marketing trends from Cannes Lions 2014Jack Morton Worldwide
 

Similar a The HubMagazine #34 (20)

HubMagazine #31
HubMagazine #31HubMagazine #31
HubMagazine #31
 
Working with Uncertainty
Working with UncertaintyWorking with Uncertainty
Working with Uncertainty
 
Advertising in India
Advertising in IndiaAdvertising in India
Advertising in India
 
Future Brand scape - Webbdagarna i Malmö
Future Brand scape - Webbdagarna i MalmöFuture Brand scape - Webbdagarna i Malmö
Future Brand scape - Webbdagarna i Malmö
 
Future Brand scape - Webbdagarna in Malmö on the 24th of october
Future Brand scape - Webbdagarna in Malmö on the 24th of octoberFuture Brand scape - Webbdagarna in Malmö on the 24th of october
Future Brand scape - Webbdagarna in Malmö on the 24th of october
 
What We Learned at ANA 2015 Masters of Marketing
What We Learned at ANA 2015 Masters of MarketingWhat We Learned at ANA 2015 Masters of Marketing
What We Learned at ANA 2015 Masters of Marketing
 
The HubMagazine #32
The HubMagazine #32The HubMagazine #32
The HubMagazine #32
 
Creative Disruption - A Visual Résumé
Creative Disruption - A Visual RésuméCreative Disruption - A Visual Résumé
Creative Disruption - A Visual Résumé
 
2009trendwatch Sparxoo Emerging
2009trendwatch Sparxoo Emerging2009trendwatch Sparxoo Emerging
2009trendwatch Sparxoo Emerging
 
Mac Innis Marketing Presentation
Mac Innis Marketing PresentationMac Innis Marketing Presentation
Mac Innis Marketing Presentation
 
Hhcl how to write a creative brief
Hhcl how to write a creative briefHhcl how to write a creative brief
Hhcl how to write a creative brief
 
limited brands annual report 1998_full
limited brands annual report 1998_fulllimited brands annual report 1998_full
limited brands annual report 1998_full
 
4 e of marketing
4 e of marketing4 e of marketing
4 e of marketing
 
2015 Summit Keynote
2015 Summit Keynote2015 Summit Keynote
2015 Summit Keynote
 
2009 Emerging Trends Sparxoo
2009 Emerging Trends Sparxoo2009 Emerging Trends Sparxoo
2009 Emerging Trends Sparxoo
 
The Business of creativity
The Business of creativity  The Business of creativity
The Business of creativity
 
Customer experience design truths
Customer experience design truthsCustomer experience design truths
Customer experience design truths
 
Trends Influencing Traditional Approaches to Marketing
Trends Influencing Traditional Approaches to MarketingTrends Influencing Traditional Approaches to Marketing
Trends Influencing Traditional Approaches to Marketing
 
Brand Attraction eBook
Brand Attraction eBookBrand Attraction eBook
Brand Attraction eBook
 
Brand experience and marketing trends from Cannes Lions 2014
Brand experience and marketing trends from Cannes Lions 2014Brand experience and marketing trends from Cannes Lions 2014
Brand experience and marketing trends from Cannes Lions 2014
 

Más de Batjargal Shasnaabadraa

Más de Batjargal Shasnaabadraa (6)

Business the power of strategy innovation-a new way of linking creativity a...
Business   the power of strategy innovation-a new way of linking creativity a...Business   the power of strategy innovation-a new way of linking creativity a...
Business the power of strategy innovation-a new way of linking creativity a...
 
Rock star
Rock starRock star
Rock star
 
Getting Things Done - The Art Of Stress Free Productivity
Getting Things Done -  The Art Of Stress Free ProductivityGetting Things Done -  The Art Of Stress Free Productivity
Getting Things Done - The Art Of Stress Free Productivity
 
Steve Jobs on Fortune
Steve Jobs on FortuneSteve Jobs on Fortune
Steve Jobs on Fortune
 
The HubMagazine #33
The HubMagazine #33The HubMagazine #33
The HubMagazine #33
 
Generation Y
Generation YGeneration Y
Generation Y
 

Último

IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...AustraliaChapterIIBA
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfAnhNguyen97152
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access
 
Intellectual Property Licensing Examples
Intellectual Property Licensing ExamplesIntellectual Property Licensing Examples
Intellectual Property Licensing Examplesamberjiles31
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGlokeshwarmaha
 
Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toumarfarooquejamali32
 
Data skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story pointsData skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story pointsyasinnathani
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...Brian Solis
 
Tata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakTata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakEditores1
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfJohnCarloValencia4
 
Anyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agencyAnyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agencyHanna Klim
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsWristbands Ireland
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfSourav Sikder
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView
 
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfHajeJanKamps
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxJemalSeid25
 

Último (20)

IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
IIBA® Melbourne - Navigating Business Analysis - Excellence for Career Growth...
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdfGraham and Doddsville - Issue 1 - Winter 2006 (1).pdf
Graham and Doddsville - Issue 1 - Winter 2006 (1).pdf
 
Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024Borderless Access - Global Panel book-unlock 2024
Borderless Access - Global Panel book-unlock 2024
 
Investment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV IndustriesInvestment Opportunity for Thailand's Automotive & EV Industries
Investment Opportunity for Thailand's Automotive & EV Industries
 
Intellectual Property Licensing Examples
Intellectual Property Licensing ExamplesIntellectual Property Licensing Examples
Intellectual Property Licensing Examples
 
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISINGUNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
UNLEASHING THE POWER OF PROGRAMMATIC ADVERTISING
 
Lecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb toLecture_6.pptx English speaking easyb to
Lecture_6.pptx English speaking easyb to
 
Data skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story pointsData skills for Agile Teams- Killing story points
Data skills for Agile Teams- Killing story points
 
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
The End of Business as Usual: Rewire the Way You Work to Succeed in the Consu...
 
WAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdfWAM Corporate Presentation Mar 25 2024.pdf
WAM Corporate Presentation Mar 25 2024.pdf
 
Tata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerakTata Kelola Bisnis perushaan yang bergerak
Tata Kelola Bisnis perushaan yang bergerak
 
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdfAMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
AMAZON SELLER VIRTUAL ASSISTANT PRODUCT RESEARCH .pdf
 
Anyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agencyAnyhr.io | Presentation HR&Recruiting agency
Anyhr.io | Presentation HR&Recruiting agency
 
Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024Borderless Access - Global B2B Panel book-unlock 2024
Borderless Access - Global B2B Panel book-unlock 2024
 
Fabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and FestivalsFabric RFID Wristbands in Ireland for Events and Festivals
Fabric RFID Wristbands in Ireland for Events and Festivals
 
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdfChicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
Chicago Medical Malpractice Lawyer Chicago Medical Malpractice Lawyer.pdf
 
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
TalentView Webinar: Empowering the Modern Workforce_ Redefininig Success from...
 
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdfPDT 89 - $1.4M - Seed - Plantee Innovations.pdf
PDT 89 - $1.4M - Seed - Plantee Innovations.pdf
 
Introduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptxIntroduction to The overview of GAAP LO 1-5.pptx
Introduction to The overview of GAAP LO 1-5.pptx
 

The HubMagazine #34

  • 1. E x c h a n g e o f I d e a s   |  January/February 2010  |  $10.95  HUB �e M A G A Z I N E A publication of Reveries.com and Cool News of the Day
  • 2. WOULDA COULDA SHOULDA 3 words you won’t have to say next time. At Upshot, we not only help you develop innovative ideas, we help you get them to market first. So next time, it’s the other guy saying, “I wish I had done that.” Not you. For more information, visit upshot.net. © Upshot Inc. 2010
  • 3. HUB �e P I VOT P OINT M A G A Z I N E Razor Sharp JANUARY/FEBRUARY 2010 A lmost 15 years ago, I started asking the best and brightest in marketing questions about the future of 22 this business, first on Reveries.com and now in the Hub. That probably translates into thousands of questions asked. But, in fact, I’ve really only posed variations of one, pivotal probe: Where’s it all headed? COVER STORY Some of the answers have been more memorable than others, obviously. If there’s one I recall best, it was Positively Safeway the response from Geoffrey Safeway chief marketing officer Diane Dietz gets Remembering  Frost, a former chief marketing inspiration from innovation. An exclusive Q&A interview by Tim Manners. the late, great  officer of Motorola, during late Geoffrey Frost. summer, 2005. It’s memorable partly 8 because, tragically, Geoffrey passed away within weeks of our conversation. But it’s more because he was so damn clear about what he saw coming. He was remarkably prescient when he referred to ROUNDTABLE his product as “the device formerly known as the cell phone.” He also suggested we should think about our Better Things business as “the industry formerly known as advertising.” Innovation just isn’t what it used to be. A discussion But my favorite part of the interview was when featuring Claudia Poccia of Avon mark, Jevin Eagle of Staples, Randy Carlson of Diageo, and Geoffrey talked about the famous William Gibson Jim Porçarelli of Active International. quote: “The future has already arrived; it’s just not evenly distributed.” As Geoffrey explained, “What he’s saying is that 16 there are people of the future, already here, walking among us. If you can figure out who they are and co-create with them, you’re actually doing a rather amazing job of not only anticipating, but also shaping W H I T E   PA P E R where the world can go.” It’s a new year, and a new decade. What’s new, for Map the Gap you, in the industry formerly known as advertising? Winning at retail requires innovation across Where’s it all headed? bundles of brand benefits. By Vinit Doshi. Tim Manners tim@hubmagazine.com
  • 4. Editor-in-Chief Tim Manners Senior Editors Peter F. Eder Jane Harris ALSO Managing Publisher Joseph McMahon 5 Art Director COOL NEWS Julie Manners Consumer Intelligence, Twittovation, Keds Collective, Little Nike, Design Concept Here/Nau/NYC and Full Yield. Alexander Isley Inc. Illustrator John S. Dykes 12 R ESEARCH R EPORT The New Super | What makes a supermarket innovative? An executive summary of a Reveries.com survey. Circulation Director Bertha Rosenberg Brain Trust Active International Arc Worldwide 14 S U RV E Y A NA LY S I S Supermarket Savvy | Innovative supermarkets tap into emotional and functional desires. By Randi Moore. Catapult Marketing EURO RSCG Discovery 20 Henry Rak Consulting Partners E SSAY Hoyt & Company Insight Out of Chaos Popping for Shoppers | The “pop-up” trend is driving retail innovation. Landor Associates By Beth Ann Kaminkow. McGuinn.com Marketing Drive Mars Advertising Triad Digital Media TracyLocke WomanWise 27 W H I T E PA P E R The Shopper Aperture | Let’s put a new lens on the future of shopper marketing. By Anne Howe. Hub Club PMA RPM Connect Upshot 30 W H I T E PA P E R The “We” Decade | Creating community and higher purpose will elevate our brands in the 2010s. By Dori Molitor. The Hub David X. Manners Co. 107 Post Road East Westport, CT 06880 34 W H I T E PA P E R Smooth Selling | Integrated Selling drives bottom-line sales and better brand performance. By Paul Kramer. 203-227-7060 ext. 227 hub@hubmagazine.com n Brought to you by the editors of Reveries. com and Cool News of the Day, The Hub magazine is dedicated to exploring insights, 36 R ESEARCH R EPORT The Socialized Shopper | New research shows how social media is changing shopping behavior. By Mark Renshaw. ideas and innovation as the ultimate drivers of business success. n Published bi-monthly since July 2004, The Hub’s circulation is exclusive to Reveries’ proprietary database of 40 E SSAY Beauty in Virtue | Luxury brands can make us look (and feel) truly good. By Cable Daniel-Dreyfus. approximately 3,500 senior-level, client- side executives in Fortune 1000 marketing 42 departments and major ad agencies. COOL BOOKS n Advertising: For more information on The Hub’s collaborative sponsorship and Makers, Think Twice and Start-Up Nation. advertising opportunities, please contact Joseph McMahon (joseph@hubmagazine. com) or 845-238-3516.
  • 5. COOL NE W S Consumer Intelligence Keds Collective The defense industry has a long history of feeding innovations to consumer markets — the Keds is engaged in a “wholesale internet, satellite navigation systems and the computer itself originated as military projects, business-model change” in which its for instance. consumers not only design footwear, but can also sell it. “Marketing has Now, the consumer-electronics industry is returning the favor. For example, the U.S. Air evolved into a conversation with Force just ordered some 2,200 Sony PlayStation 3 videogame consoles, which it will use as the consumers,” says Kristin Kohler “building-blocks of a supercomputer.” Burrows, president of Keds. Meanwhile, in Iraq and Afghanistan, soldiers “are using Apple iPods and iPhones to run To keep that conversation going, translation software and calculate bullet trajectories. Xbox videogame controllers have Keds has launched a site, called Keds been modified to control reconnaissance robots and drone aircraft.” Collective, where consumers can This is occurring because the military spends “only a small fraction” of its $1.5 trillion choose from a palette or upload their budget on electronics, leaving it outspent on R&D by the consumer-electronics industry. own design elements. Electronics firms are also able to “move much faster than the slow, If Keds likes a design, it makes a deal multi-year grind of military procurement programs ... And with the consumer, who receives the emergence of open-standards and open-source a 10 percent cut on any sales. The software make it easier to re-purpose off-the-shelf shoes can either be ordered online by technologies or combine them in novel ways.” consumers or stocked by retailers for Leaving such innovations to the private sector sale in stores. meanwhile enables the military to “focus their So far, this hasn’t exactly made spending on the development of new technologies, anyone rich, but that’s not the point. rather than reinventing the wheel.” “I’m totally thrilled,” says Jeriana [S o u r c e : The Economist, 12/12/09] San Juan, who has “sold six pairs of Keds with her designs.” For Keds, its all about turning Twittovation “custom sneakers into an advertising juggernaut when the designers ... proudly holler about them from the “Twitter’s smart enough, or lucky rooftops of the internet.” Jeriana, enough, to say, ‘Gee, let’s not try to for instance, “has posted her Keds compete with our users ... let’s outsource designs on Facebook and is adding a design to them,’” says Eric von Hippel, Keds link to her website.” author of Democratizing Innovation. Similarly, Nike not only publishes Twitter CEO Evan Williams agrees: a “gallery” of consumer designs “Most companies or services on the web on NikeiD, but also provides start with wrong assumptions about what they “convenient icons to click to ‘share’ are and what they’re for,” he says. “Twitter struck an interesting balance of flexibility them on Twitter, Facebook and and malleability that allowed users to invent uses for it that weren’t anticipated.” MySpace.” Among other things, Twitter users invented the idea of putting the @ symbol before their Champion, meanwhile, asked its user names (e.g., @cool_news). They also picked up the idea of using the # symbol to “consumers to design hoodies and categorize topics — another innovation Twitter initially resisted. submit them for votes.” Darren Paul The # idea came from open-source advocate, @chrismessina, who says Twitter thought of Night Agency, the social-media the # concept was too nerdy for mass appeal. Well, now Twitter “hyperlinks the hash consultancy that helped create the tags so readers can click and see all the other posts on a topic.” Keds Collective, comments: “People feel much more connected to the Evan Williams says Twitter’s plan is to keep following its followers. “You get a bunch brand because they’re part of the of users interacting and it’s hard to predict what they’re going to do,” he says. “We say, advertising, in reality.” ‘Why are people using this and how could we make that better?’” [S o u r c e : Christina Binkley, [Source: Claire Cain Miller, The New York Times, 10/26/09] The Wall Street Journal, 12/10/09] Cool News of the Day, a daily e-mail newsletter of marketing insights, ideas and inspiration, is edited by TIM MANNERS. For a free subscription, visit www.reveries.com
  • 6. COOL NE W S W S COOL NE Little Nike Mark Parker thinks acting smaller will help Nike grow bigger. It’s not as though Nike, now 37 years old, is having any problems growing; its “stock is up 50 percent over the past five years while the S&P 500 is down 7.7 percent.” According to Interbrand, Nike’s brand value “has jumped from 31st to 26th” in the four years since Mark assumed leadership at the company. Despite this, Mark sees the Nike brand as something of a liability, particularly among younger consumers in action-sports categories. Jeanne Jackson, president of Nike’s retail division agrees: “Kids think it’s cool not to have a big, hairy name over the store,” she says. And so Nike’s latest retail venture not only doesn’t carry the Nike name, it has no name at all. Instead, the action-sports store, dedicated to skateboarding and snowboarding, simply displays the logos of “its three key brands at the entrance: Hurley, Converse and 6.0 (an action sports line that does have a Swoosh on it).” “The hardest thing for a company to do is to change when it doesn’t seem like change is necessary,” says Mark. One thing that hasn’t changed is Nike’s connections with celebrity athletes. “We always want to be connected with the world’s top athletes,” says Mark, himself a distance runner. “Our relationships with athletes fuel the innovations,” he says. And, of course, there’s China, where Nike invested some $1.5 billion in 2009, and may invest even more in the year ahead. “No matter how much you’re investing there, it’s not enough,” says Mark. [S o u r c e : Bruce Horovitz, USA Today, 12/7/09] Here/Nau/NYC Full Yield Jean-Pierre Veillet is creating a pop-up boutique “using materials ... “We need to put food back in the heart of health care,” says Zoe almost entirely rooted in New York City’s waste stream.” Finch Totten, chief executive of Full Yield. “It’s the cheapest way to deal with health and the simplest, and definitely the most This includes “fallen tree limbs found on the street, timber and pleasurable,” she adds. metal pipes from derelict Brooklyn factories and piles of discarded cardboard boxes — so that when the store closes, at least the Zoe’s focus is on the way people eat in the workplace. Her solution garbage won’t be new.” is a branded “12-month nutritional program” that’s designed to “take the guesswork out of what constitutes a healthy diet” and The boutique is called Here/Nau/NYC and naturally “will carry help reduce health-care costs. products from several environmentally minded companies, including shoes from Timberland and Toms, organic dresses and The Full Yield menu features “fresh items made with natural, whole sweaters from Stewart + Brown, bags made of recycled truck tarps ingredients” and “will be sold in corporate cafeterias and in the from Freitag and the sleek, athletic designs of Nau.” prepared-foods section of local supermarkets” in the Boston area. John Hancock, the insurance company, is among Zoe’s first customers, And so Jean-Pierre is busy fashioning displays out of cardboard with some 300 of its employees adopting Full Yield next year. and trying to turn bubble-wrap into lampshades. He’s got clothes “hanging from a rolling rack made of old pipes, timber and Meals are priced at $6 to $7 a meal, and employees will receive mismatched wagon wheels.” His main worry, he says, “is that it “$100 worth of coupons that can be used in John Hancock’s could end up looking clunky and cheap.” cafeteria and at 18 local Roche Brothers grocery stores.” Gordon Seabury, who owns Nau, refers to Jean-Pierre’s approach as Full Yield plans to take various biometric measurements of “dumpster-diving” but is “confident that the resulting decor would Hancock participants throughout the year, and then “analyze the ultimately reflect the company’s approach to considered design.” data against insurance claims to gauge improvements in health.” [S o u r c e : Eric Wilson, The New York Times, 11/5/09] [S o u r c e : Melanie Warner, The New York Times, 11/29/09] Cool News of the Day, a daily e-mail newsletter of marketing insights, ideas and inspiration, is edited by TIM MANNERS. For a free subscription, visit www.reveries.com
  • 7. 95  |  $10. 20 09  M ay /June  de a s   |  of I ange Exch HUB �e HUB �e Excha nge o f Ide as   |  Se pt em ber/ Oc tobe r 2009  |  $10 N E A Z I M A G M A G A Z I N E HUB Exchange o   �e f I d e a s   |  July /Aug ust 2009  |  $10.95  M A G A Z I N E THE HUB 12 TOP Shoppeng r Marketi ce Excellen  D ay  the s of  New Cool and s .com ev erie of R ion bl icat A pu A pub li catio n of R ever ies.c om an d Coo l  News  of th e Da y A publicati on of Reve ries.com a nd Cool Ne ws  of the Day Get the Hub! Keep up with marketing’s boldest and brightest. Subscribe today. It’s easy. Just visit: http://hubmagazine.com/subscribe
  • 8. ROUNDTABL E Innovation just isn’t what it used to be. Better Things What are you trying  up. Every single Staples store in always been that it’s not innovative the United States has easy-tech if it’s a solution in search of a to accomplish with  technicians who can provide a free problem. The goal of innovation is innovation? tune-up of your PC. really to ferret out a keen insight, to deliver something that is Claudia Poccia: With new products, A product innovation is our Mailmate needed, wanted or lacking. we constantly challenge ourselves Shredder. Our customers were to look outside of the cosmetic opening their mail in their kitchens The word “innovation” clearly is industry into the broader landscape but their shredders were in their overused. So many people use it of change. We try to leverage offices. So, we made a shredder as “give me something different inspiration across the convergence that’s just perfect for the kitchen. to save me for six months” or of media, technology and other There are many more examples of “something different for the sake of A product forms. solving problems for customers being different,” so that I can say R oundtAble We also engage with our customer embedded in our culture. that I have fostered innovation. F eAtuRing or representative because, for the Claudia Poccia most part, she is one and the same. We try to leverage inspiration across That’s why bringing our product Avon mark to her, where she lives, and where the convergence of media, technology Jevin Eagle she’s most receptive to receiving and other product forms. Staples our message, is so important. C L Au DI A P o C C I A Randy Carlson We bring direct selling into the Diageo digital age through social media and other nascent technologies. We’re Randy Carlson: The goal of But innovation really is about Jim Porçarelli going to her in a place where she’s innovation should be to bring new paying attention and looking for Active International open to receiving our message and ways to delight consumers that are sometimes the simplest things that engaging with our brand. relevant for them. For Diageo, and solve the issue in a way that no one a lot of mature businesses, maybe else has done before. Jevin Eagle: At Staples, the goal that’s more “renovation” than of innovation is to provide customers with value, product or an experience “innovation,” but it’s really about How do you create a  breathing new life into our brands. that solves a problem or helps make culture of innovation? their lives easier. That’s the link Some people look at innovation between the customer, the innova- as inventing the un-invented. But Poccia: Talent is the key ingredient tion, Staples and its shareholders. our obligation, as companies, is to to creating a culture of innovation. deliver business results. Inventing If you have a team of forward- For example, we offer free delivery the un-invented is a nice, long- thinking individuals who can that, in almost all cases, arrives term aspiration, but innovation had look at things with a fresh, new the next day. That would be an better create revenues and profits. lens, it creates an environment experience innovation. A service that fosters innovation throughout innovation is our free PC tune- Jim Porçarelli: My mantra has 8 THE HUB  JANUARY/FEBRUARY 2010
  • 9. the company. High emotional Proven results are what get the organization intelligence is also paramount. gelled around innovation. You need people with great, cutting-edge ideas, but equally R A N Dy C A R L S oN important is a team that has the ability to initiate and execute You also need an element of In fact, she demands it. She inspires those ideas in a strategic manner. pragmatism. Rather than just us. She co-creates with us because It’s important to build a team of thinking about an idea, you need we’re both a brand and a channel. creative thinkers who reach for to go and do it and focus on results. So, whenever we ideate a product, the stars, but also keep one foot Otherwise, your innovation is not our favorite expression here is, firmly planted on the ground so going to have a long life. Proven “let’s take it to the Girl Lab.” That that everything aligns with the results are what get the organization means going to our consumer and business objective. gelled around innovation. our representative and engaging Eagle: We not only have a market her in the ideation and decision- Porçarelli: You have to give people research department at Staples, but making process up front. honest-to-goodness permission also groups of people who are not to fail. If people aren’t afraid of This co-creation partnership exactly in “market research,” but making mistakes, they are going enables us to bring forth products are constantly doing, testing and to come up with more and more that allow for our consumers’ and trying new things. For example, we creative and interesting ideas. representatives’ self-expression. So, have what we call our “usability she’s got a more immersive brand group.” Their job is to observe how You need people who say things that experience at a higher level of customers use things, either online you hadn’t thought of yourself. If emotional engagement with us. or in person. people are just repeating everything I already know, they are not right Eagle: I have a strong point-of-view At any given time, we have for my team. Leaders need to allow on this. We used to run a contest dozens of tests going on of either themselves to be challenged by at Staples called Invention Quest, new products, new ways to display their teams. where we asked customers and products or to develop offers. The employees to create new product culture when we go out into the Managers have a responsibility ideas. I’m so glad we did this — I field is the culture of listening, whenever someone comes to them was one of the judges — but I don’t whereas in traditional retail it’s with an idea — no matter how big think it was the most effective way a culture of telling. We have or how small — to sit with them to get insights because customers tremendous respect and awe for and help tweak the idea until it are not product developers. our store managers, and when works. It’s imperative to continue they give us ideas we take the conversation because it can A better way to get customers voracious notes. foster other ideas in other arenas engaged is for us to listen to them. that will solve bigger problems. How do you live your life? How do Carlson: Innovation really starts you work? How do you play? How at the top. There may be a heretic who’s trying to push innovations How should consumers  do you use products today? That’s where the much bigger ideas come uphill, but heretics have a very be involved in the  from. We listen, observe, and take low probability of getting anything innovation process? it from there. done without leadership support. Poccia: Bonding over beauty and Carlson: For us, the involvement Second, you need people who fashion fosters community and is three-tier, including consumers, believe in possibilities and are brings young women together. customers and distributors. If you willing to beat their heads against Because direct selling is inherently have a brokered sales organization, the wall. With innovation, you are participatory, it’s really natural for you should include them, as well. going to hear “no” a lot. You have us to engage with our customers It’s critical. to have people who are willing to work in that kind of environment and representatives to create a co- I personally find that the trade — and aren’t brought down by it. branding experience. including distributors and sales JANUARY/FEBRUARY 2010  THE HUB 9
  • 10. organizations — has a kind of What is the most  taking any money you make and “fingertip feel” for what’s right or applying it to lower prices, and wrong with your product offerings. innovative idea   then focusing everything in your It’s a great thing to get that kind of you’ve seen? culture on leveraging scale to get feedback sooner than later. lower prices. I think Starbucks was Poccia: True innovators create the first to not require a signature On the other hand, your customers, products or services that customers at the register when you use your your consumers or the trade are not can personalize to meet their credit card. That was brilliant. going to come to you with the next, needs. I find TiVo fascinating. For big breakthrough idea. That’s just decades, all of us were happy to I do think that Staples’ ink not going to happen. So, hopefully view pre-determined and recycling program is breathtaking. that’s where the innovator’s thinking scheduled programming and then We give three dollars back for comes in. It’s really up to the out of the blue comes TiVo. every cartridge you bring back to innovator to identify the problem recycle. This meets the customer’s being solved, and how to solve it. Now we have the power to need for doing something good for decide when we want to watch the environment, while also giving Porçarelli: First of all, their this programming. This TV-by- them money for it. We’re going to involvement is about the due appointment culture has created a recycle more than 50 million ink diligence of the marketer. seismic shift in consumers. jet cartridges this year. There’s so much information and data available to us today, Something that we’ve done at mark Carlson: My favorite innovator but you need to understand the is a franchise called Hook Ups. Hook right now is Tesla Motors. attitudes, concerns and buying Ups are dual ended, customizable What Tesla has done is make a behaviors that are intrinsic to your makeup products for eyes, lips completely electric car using cell- consumers. So, don’t be afraid to and cheeks. We provide a wide phone battery technology. It’s the preview ideas with your audience. assortment of textures, tones and same kind of battery you have in product forms. The consumer can your Blackberry, just stacked up. Procter & Gamble had a wonderful put together over 2,000 combinations formula where every single brand and make it their own. That has They make a sports car that’s super light, looks a lot like the Lotus, and can go from zero to 60 mph in 3.9 seconds, with a 250- The culture when we go out into the field is mile range. It costs $100,000, but the culture of listening, whereas in traditional it is twice as efficient as a Prius. They are also making a 4-door retail it’s a culture of telling. sedan for 2011 delivery. J E v I N E AgL E What Tesla has done is turn the efficiency issue on its ear. They’re taking this notion of a car you had to set aside a little bit of its really gotten the industry’s attention want to be in and the right thing budget every year for testing — even because it puts creativity in the to be doing for the world, and though they knew that 80 percent of hands of the consumer. put them together. And they’ve the results may not give them an actually executed it. It’s brilliant! Eagle: With Amazon, one innovation insight worth acting on. But the was giving away shipping and Porçarelli: There’s a product other 20 percent was invaluable. As tying that to extremely low prices. called New Energy Solutions — it’s a result, they had the greatest insight Most business people would have this pad that you can put on your into the package-goods consumer. said “no” to that. Another innovation dresser, and it charges all of your While consumers generally don’t was buying back used books and electronic devices without having really know what they do want, then reselling them, which to plug them in. That really adds they pretty much know what they GameStop does with games. to your quality-of-life because don’t want. By knowing what to they’ve solved an everyday At Walmart, the innovation eliminate, it’s often a lot easier to problem. was Sam Walton’s concept of figure out what to offer. 10 THE HUB  JANUARY/FEBRUARY 2010
  • 11. T HOUGHT L E ADER S In a very different realm, there’s for us — if not at the moment, a technology in radiology called then over the life of customer. micro-bubbles that are injected There are plenty of things we do into the bloodstream to take better where we’re not maximizing profits “pictures” of a specific organ. - on a transaction basis, but we are The idea is that if you inject the on a customer basis. That’s the key. CLAUDIA POCCIA is global bubbles with chemotherapy, you president of mark, Avon’s trend might be able to treat cancer more For example, during back-to- beauty and fashion boutique brand, effectively. It’s still being tested, school season, we offered free where she is reinventing the direct but could have a huge impact. backpacks — 100 percent back in selling business model for the Staples rewards on any backpack. next generation by tapping into How do you   Why did we do that? Not because the world of social media. measure the return   we thought we were going to JEVIN EAGLE is executive vice make money that day. The on innovation? president of merchandising and innovation is in how we create marketing for Staples. Jevin was Poccia: R.O.I., at mark, means value for customers. It all comes a principal architect in developing “Return On Innovation.” It’s a back to our customer economics. the Staples brand promise to make buying office products easy. metric for success that has never Carlson: At Diageo, we have been more critical to the bottom business performance metrics line. We measure it through our that are attributed to innovation. RANDY CARLSON is global most important asset, and that’s the In fact, in our annual report, innovation director for Diageo. mark representative. That’s because half of our growth last year Previously with Ralston Purina, not only is she our consumer, but came from innovation. It’s a real Tropicana and PepsiCo, Randy has she’s also our retailer. a diverse perspective on common number. There’s real bookkeeping success factors for innovations So, for us, the innovation imperative and accounting associated with across marketplaces. is to deliver an entrepreneurial innovation that’s done both in platform to this representative aggregate and individually. JIM PORÇARELLI is chief strategy officer at Active International, a global marketing and business If people aren’t afraid of making mistakes, solutions firm. He can be reached at jporcare@activeinternational.com. they are going to come up with more and more creative and interesting ideas. J I M P oRç A R E L L I that reinvents direct selling for In a broader context, your return on innovation and reinventing them, and allows them to play on innovation requires short-term themselves. Is there a return on in a digital space through their metrics in addition to the long- innovation? You bet your life social networking platform. As term investments, and you have to there is, because innovation is the her engagement and connection roll them up together. If you start lifeblood of every business. through these platforms rises, so doing activity-based costing on each There’s a huge return because does her sales productivity. So, it individual innovation, there will innovation fosters innovation. generates organic growth. be more things you kill than you When someone comes up with an launch. When that happens, then Eagle: Innovation is all about the innovative idea it becomes almost somebody else invents the future. notion that if we do things for our addictive because as you begin to customers that meet their needs, Porçarelli: Without innovation, have success with innovation you they will reward us. Our underlying a company will begin to die. want to have more success, and more assumption is that doing good Great companies falter because innovations follow. Innovation is its things for customers is also good they didn’t put enough emphasis own impetus for greater innovation. n JANUARY/FEBRUARY 2010  THE HUB 11
  • 12. RE SE ARCH REP ORT What makes a supermarket innovative?  Where would shoppers most like to see  innovation? Which supermarkets are  most innovative? The New How innovative is the supermarket you shop most often? Conventional wisdom has it that many — if not most — supermarkets haven’t changed much Somewhat 55.0% for about 50 years. True, there’s more in the way of prepared meals. And the number of products Very 21.7% offered has grown. Store brands may have improved in quality, too. Not at all 17.1% But has the basic construct of aisles of ingredients really budged all that much? We put Extremely 6.3% this question to Reveries.com readers and the answer came back somewhere down the middle: A majority of 55 percent said the supermarket In which ways is your supermarket innovative? they shop most frequently is only “somewhat” (pick as many as apply) innovative. As one respondent put it: “It seems grocery Product Selection 54.3% retailers perceive innovation as being creative with inventory and don’t give enough consideration to Prepared Foods 46.6% environment and space.” The only area a majority deemed innovative Private Labels 38.9% was “product selection” (54 percent), followed by “prepared foods” (47 percent) and “private Store Layout 31.7% labels” (39 percent). However, in nine out of ten areas, survey Checkout 31.7% more in the way of innovation: product selection; respondents suggested they would like to see Customer Service 29.8% format/store layout; checkout; customer service; promotions; new services; online tools; and Promotions 17.3% displays. The only area shoppers indicated they Displays 17.3% are satisfied is “private labels.” Online shopping tools appear to be especially Online Tools 13.5% ripe for innovation, as an overwhelming majority of respondents (74 percent) said they do not use New Services 12.0% retailer websites. An even larger majority of 80 percent said they do not use “any other online planning tools for grocery shopping.” Some remarked that they weren’t aware that How important is a supermarket’s prices versus its such tools exist, while others confirmed that this innovations to you? may well be the case: “I wish I could get ads via my phone and use mobile coupons. I would also Somewhat 39.6% love to be able to upload coupons to my loyalty Very 37.1% card and not have to deal with paper coupons.” Frustrations were many, with crowded Extremely 18.3% stores and slow checkouts being the most frequently cited complaints. Others aimed their Not at all 5.0% ire at stores that rearrange aisles for no apparent reason: “Shuffling where categories are found, 12 THE HUB  JANUARY/FEBRUARY 2010 THE HUB  JANUARY/FEBRUARY 2010
  • 13. Super Where would you most like to see innovation at your supermarket? (pick as many as apply) sometimes just from the right to the left are annoyances, not innovations.” Self-checkouts also received mixed reviews. others said they only benefit retailers. One Some said they liked the convenience while respondent had a similar complaint about store formats: “I’m tired of grocery stores being laid out to help the grocer and the vendors.” Product Selection 51.5% Overall, there was no shortage of suggestions on where supermarkets could improve in ways Store Layout 50.6% both big and small: Checkout 41.6% “ Why can’t grocery bakeries make good, healthful, preservative-free breads?” Prepared Foods 35.5% “ This business of forcing me up and down aisles and across the store to find the things I need is Customer Service 33.3% tiresome and makes me tired and angry.” Promotions 31.6% “ I wish I didn’t have to go to three different stores in order to supply our home.” New Services 31.6% “ So many carts with wheels that don’t work right!” Online Tools 29.9% Despite such grievances, a perhaps surprisingly large majority of 70 percent said they generally Displays 25.5% enjoy grocery shopping, especially discovering new items. And even though most do not consider Private Labels 15.2% their supermarkets to be innovative, a plurality of 43 percent felt their grocers were up-to-date. But as one respondent observed, the In general, do you enjoy grocery shopping? innovations of the future may well be rooted in the past: “I shop at a small, family-owned Yes 70.3% supermarket that prides itself on personal service. Another hinted that maybe it isn’t up to Its innovation is old-fashioned customer service.” No 29.7% supermarkets to be innovative at all: “Since I purchase groceries from three stores and one farmer’s market each month, maybe I’m the innovator.” Overall, which era does the supermarket at which you And this comment may provide the greatest usually shop most resemble? insight of all: “Here’s the deal, when money is 2000s 42.7% in short supply and entertainment dollars are small or non-existent, grocery shopping becomes 1990s 21.4% entertainment … When money is flowing and we can eat out more often and I’m cooking less, then 1980s 11.5% grocery shopping goes back to being a chore.” The supermarket picked at the number-one 2010s & beyond 10.7% most innovative? Whole Foods, followed by Trader Joe’s and Wegmans. Curiously, nowhere near as the supermarkets they shop most frequently. n 1970s 7.7% many respondents selected these same stores as 1950s 3.8% Complete survey results can be found at: 1960s 2.1% www.hubmagazine.com/survey/supermarkets JANUARY/FEBRUARY 2010  THE HUB 13 JANUARY/FEBRUARY 2010  THE HUB
  • 14. SURVE Y ANALY S I S Supermarket Savvy T he latest Reveries.com survey asked a I m pl I c at I o n s : Improve navigation — beginning savvy shopping crowd whether today’s in the parking lot and continuing through the store supermarkets are innovative. What we and checkout. Create a shopper-centric store layout heard back was how shoppers want us to with intuitive assortments and adjacencies in an innovate today’s shopping experience. uncluttered environment. What do they want? Well, as one respondent Fix the broken carts. Smooth the checkout succinctly said, “I want it all.” And today, to get it all, experience — if not with technology with good, old shoppers go everywhere. fashioned, helpful, happy, engaged employees. When asked, our shoppers reported that they Relevant Rewards. This means delivering more patronize an average of three different supermarkets, than price incentives in a format that is relevant to making one or two trips per week. But that’s not today’s shoppers. It is about innovating both in terms the whole story. When we dig into where they are of content and delivery. It is about informing and shopping, we unearth an eclectic, channel-blurring motivating shoppers along their paths-to-purchase. I m pl I c at I o n s : Provide relevant, convenient rewards and tools that are customized to shoppers’ Innovative supermarkets tap into needs and localized to their markets. It is about consistently reinforcing that membership in retail emotional and functional desires. reward programs has privileges. To do this, retailers need to build in additional value and convenience. To help communicate, augment list that includes traditional supermarkets, specialty outbound retail email campaigns with innovative stores, club, mass and drug. product information, planning tools, recipes and a link to What drives them? From a functional perspective, coupons. Consider extending to mobile applications. shoppers want: From an emotional perspective, shoppers connect Product selection. Provide affordable, one-stop with retailers and brands that: shopping without sacrifices. This starts with providing Understand them by having the right assortment, quality produce — including both local and organic right offers and then something extra. Strive to choices. It extends to value-added product options, understand the cooking-shopping-nurturing connection with shoppers looking for specialty, gourmet and that drives both the function and emotion around prepared-foods offerings. many shopping trips. Don’t underestimate shopper I m pl I c at I o n s : Provide an array of quality products commitment to more sustainable and green solutions, that meet their needs and their wants to build baskets. even in a down economy. Be consistent in your product offerings and eliminate I m pl I c at I o n s : Understand your shoppers and the critical out-of-stocks that drive shoppers out of their preferences. Become a resource for more than your store. merchandise, and become a partner that helps provide Convenience. It’s not all about location, location, innovative solutions that entertain and nurture their location. It is about time: Get shoppers in, get them families. out — fast, with everything on their list. Provide them Engage them personally with communications with helpful and happy personal service. that inform and educate — before and during the 14 THE HUB  JANUARY/FEBRUARY 2010
  • 15. shopping trip. Shoppers are looking for information that provides ideas and inspiration. Ask them their opinions! Truly Super Markets I m pl I c at I o n s : Understand your shoppers’ paths- to-purchase and engage them along the way. Don’t In survey respondents’ own words, here’s what undervalue the role of personal service. Create simple, makes supermarkets super: relevant planning tools that integrate with how Whole Foods: Product Selection; Convenience they plan today. Engage them visually in-store with (Store Layout and Service); Engagement attractive displays and signage — remembering that (Communications and Causes). value is much more than price. Entertain them. Take the mundane out of the Trader Joes: Product Selection; Convenience shopping experience — make shopping an event. You (Checkout and Service); Entertainment have a live audience. Make it fun for them and for (Sampling and Surprises). family members in tow. Wegmans: Shopping Experience; Product I m pl I c at I o n s : Add music, demonstrations, Selection; Convenience (Layout and Signage); sampling, wine tastings, product specialists and good, Engagement (Communications, Causes, Recipes old-fashioned customer service to add a personal and Service); Entertainment (Sampling). element. Introduce them to new products and invite Tesco Fresh & Easy: Product Selection; them to explore. Convenience (Checkout Options and Layout); Success requires solutions that drive the mutual Engagement (Social Media). goals of both the retailer and the manufacturer. This means listening to the shopper and delivering against multiple shopper needs. Manufacturers need to find connecting points between their brands and the retailer. If your Build programs to deliver against shoppers’ product benefit is about convenience or speed, partner multiple needs. For example, when we create with retailers to deliver convenient solutions and programs that inform and educate (e.g., recipes, meal services. For example: This checkout or checker plans, activities, in home entertaining tips, healthy brought to you by Brand X. living guides, etc.) We show that we understand that If your product makes folks smile, sponsor an our shoppers are looking for ideas and solutions. employee recognition program that delivers improved When these ideas include complimentary (and customer service that engages shoppers and improves potentially private-label) products, we are building convenience. If your brand entertains, find a way to baskets in a way that leverages the retailer’s product bring that into store in a way that builds on both the selection. When we overlay incentives in a tips booklet, brand and retail platform. or through shopper targeting, we are providing relevant Listen to the voice of the shopper and understand rewards. the impact of changing shopper behavior. Irrespective By collaborating with retailers to develop in of any shortcomings, 70 percent of our survey store “solution centers” with attractive fixtures and respondents say they like shopping and discovering informative signage, we maximize convenience while new things. engaging shoppers. Add an educated, animated So, create events that encourage shoppers to go demonstrator, and we entertain the shopper, as well. on a “treasure hunt.” Purposefully drive consumers When we bring these elements together, we are on the throughout the store to fulfill their missions to discover road to true super marketing. n something new — it both engages and entertains. Shoppers are pre-planning as never before, but according to this survey 60 percent of them are RANDI MOORE is vice-president not using retail circulars and 74 percent are not and account director with leveraging retail websites. Marketing Drive. She leads the Engage consumers where they plan by integrating agency’s shopper-marketing into relevant online activities like popular cooking practice. Randi can be reached at randi.moore@marketingdrive.com. (Epicurious, Food Network) and couponing sites to build on planning behavior. JANUARY/FEBRUARY 2010  THE HUB 15
  • 16. WHI T E PAPER Map the Gap By Vinit DoShi h e n r y r a k c o n S u l t i n g Pa r t n e r S T he real story behind the growth of store brands is less often about price gaps  than the shrinking value gap between national and store brands. This narrowing  value gap is real, and marketers anticipating an economic recovery to lift their  sales in a “rising tide” effect are bound to be disappointed. Consumers are fundamentally changing their consumer behavior that holds as true today as ever: attitudes towards more conscientious consumption National brand manufacturers need to innovate across on matters of environment, health and value. The the entire value bundle that comprises the brand — heightened importance of value-for-money is leading positioning, product, packaging, pricing, etc. — in them to rethink their attitudes and behaviors order to deliver relevant benefits to the right targets in concerning the value of branded products and the a superior way and align with consumers’ needs and price premiums they are willing to pay for frequently desired benefits. consumed necessities. Mature markets demonstrate these principles of consumer preferences all the time. In the last five years, for example, marketers have successfully Winning at retail tapped into consumers’ health and wellness needs with a variety of innovatively-positioned and requires innovation precisely-targeted beverage products that promise to deliver specific functional benefits such as quick across bundles and lasting energy, meal replacement, or vegetable nutrition — often to selected targets during specific of brand benefits. parts of the day. These consumer preferences lead to consistent behaviors that collectively create markets organized The trend is further reinforced by better consumer around bundles of relevant benefits. This results in perception of store brands, backed by improvements product groupings that deliver primarily against one in the quality and range of these products (according of those benefit areas and compete closely with other to a recent study, 70 percent of millennial women products in the same group. perceive the quality of store brands to be “excellent”). Regardless of the market, price-value invariably This portends the potential continuation of store manifests itself somewhere in the structure, although brand sales and share growth, and a steep challenge the role of price-value relative to the role of brand to the growth of branded products. varies considerably across different markets. The To look for answers, we turn to a key principle of price-value dynamic depends on the importance and 16 THE HUB  JANUARY/FEBRUARY 2010
  • 17. types of consumer needs, nature of product usage, A market map provides a precise understanding role of trust and imagery in the category, the presence of how consumers are behaving, for what reasons, and strength of dominant brands and levels of and with what trade-offs. It is a proven platform for marketing and innovation. evaluating and predicting the impact of different Ultimately, however, the price-value relationship marketing strategies. As such, it is an essential depends on how well marketers have managed to define foundation for managing a brand to a better outcome. and deliver relevant benefits. In some cases, marketers Unfortunately, many organizations do not fully have created benefit-structured markets based on years appreciate or understand the power of a correct, of advertising, innovation, and effective positioning precise, and behaviorally-based understanding of against relevant functional and emotional benefits. their market. Too often, a brand’s competitive frame is In these situations, brands or brand groups play a based on category definitions, consumers’ opinions, or significant higher-order role in which they effectively a less-than-rigorous evaluation of consumer behavior. stand for and own key benefits to the exclusion of As a result, the hierarchy of benefits may be other brands. Store brands may play a smaller role — out of order, or the spheres of influence through existing but interacting in an undifferentiated way — which consumers make choices and trade-offs may or in a limited way that does not preclude the growth of be misrepresented. Managing a brand with a flawed branded players. The example of soy milk demonstrates understanding of the market is bound to inhibit or how branded products used precise positioning, even derail growth. marketing, and innovation to establish and own a value- So, the first challenge is to understand how the added position as a tasty, healthy, nutritious, dairy- market is organized, what your brands really compete free alternative to conventional milk, leaving behind with, and on what basis. After developing a precise, the commodity dynamics of the dairy milk category. behavior-based understanding of the market, you At the other extreme, markets that lack meaningful are ready to understand how to guide your brands differentiation of relevant benefits to consumers, to more advantageous positions of sustainable and significant marketing, and effective innovation, profitable growth. You can also identify and prioritize predictably degrade into attribute-driven markets in the most viable innovation opportunities among many which form, flavor, price-tiers, or easily replicable seemingly reasonable options. factors become the primary organizing principle of the market (for example, conventional dairy milk). Finding growth opportunities In such cases, national brands often play a The logical first place to look for growth is among weakened role in the structure, and store brands do your established brands in their current, competitive well as consumers reward the brands that deliver the frames-of-reference. In some cases, a brand may have only differentiating benefit of relevance — price-value. significant upside potential in terms of consumer Most markets fall into a continuum between these behavior that can be accessed. Well-differentiated extremes in which many national brands are fighting a brands often find that their strong loyalty puts them losing battle, struggling to stem losses or eke out small in the enviable position of being able to bring in new gains. Some are dealing with the added burden of budget buyers or increase usage simply by increasing media cuts and cost reductions that affect product quality. spending. All the while, store brands are racking up growth. More often than not, however, brands have not Fortunately, the picture is not all gloom-and-doom fully optimized their potential from a positioning for marketers of national brands. If they are committed standpoint. Many brands may be competing in an to understanding and leveraging the principles of undifferentiated way with other brands, representing consumer preferences and benefit-structured markets, the same benefits to the same consumers in more or they have good reason for optimism. In a previous less similar ways. issue of The Hub, my colleague Eric Greifenberger Insights based on the market map can provide introduced the concept of a market map (see: Map the a breakthrough understanding of how to deliver the Market, July/August, 2009). functional and emotional benefits of a market in a JANUARY/FEBRUARY 2010  THE HUB 17
  • 18. Concentric spheres of competitive interaction illustrate the range of competition from close-in to furthest-out Fruit-flavor All flavors of Desserts/ Desserts in other Ice Cream Ice Cream Sweet treats situations S o u r c e : Henry Rak Consulting Partners more compelling, effective or different way. Or, it differentiated itself as a high-quality, more effective can show how to expand the benefit appeal to more laundry care product. Chanel owns a certain mystique consumers, or across more occasions. in perfumes and luxury accessories. Victoria’s Secret In recent years, some brands have leveraged and Starbucks have come to stand for distinct benefits consumer trends by emphasizing the simplicity and to selected consumers that allow each to transcend the freshness of their ingredients to consumers who are products themselves to own an experience. most motivated by health and wellness. One particular An integrated view of the market with consumer brand of lunch and dinner products has done well by needs and usage behaviors can also help identify elevating its appeal from basic product attributes to a emerging opportunities to meet unaddressed or sharper connection with old-world Italian sentiments. unknown needs. The bigger and further out the idea, In other cases, positioning a brand to bridge multiple the more likely it is to require significant product benefits has proven effective in improving relative innovation. The process begins by examining the value perceptions versus store brands. different needs that people experience across occasions A market map represents “concentric spheres and their satisfaction with the current solutions, all of of consumer interaction,” in which each sphere which helps identify problem areas and gaps. represents gradually broader sets of needs being met For example, the basic “hydration” benefit of by a wider array of competitors (see chart). In this beverages has been redefined and segmented to meet sense, a brand can look for growth by extending its different nuances of the basic need, including portable positioning to stand for something bigger and broader. hydration for everyone/everywhere/anytime (bottled Taken to its logical conclusion, such brands can water), hydration with replenishment (isotonics), begin to own a “benefit platform” to a sufficiently hydration with nutritional benefits (vitamin and distinct degree that they command greater loyalty and enhanced waters), and so forth. source volume from brands in other segments of a Exploiting the sufficiently large and viable white- market. This is known as “partitioning the market.” spaces can sometimes provide more significant and A brand that has partitioned the market is sustainable growth opportunities than battling for characterized not only by strong market-share, but share within crowded areas of the market. Effective also by strong loyalty and a price premium. Tide has innovation requires brands to extend their positioning 18 THE HUB  JANUARY/FEBRUARY 2010
  • 19. platforms and equities to reach further out (or develop competitive frame includes Subway and Quiznos, new brands), secure larger marketing budgets, and then product testing on that brand should include manage to a longer-term investment horizon. the sandwich chains’ products. Following that, An effective portfolio plan that balances risks simulating the trade-offs between different levels of and rewards by optimizing the shorter-term and product positioning, quality, pricing, and margins can longer-term opportunities of established brands and provide management a quantitative range of options to innovation simultaneously, can enjoy significant factually determine what size business is most viable competitive advantages and drive sustainable growth. from a total perspective of volume, revenue and margin. Drive ROI at the Expense of Growth. Optimizing Av o i d Q u i c k F i x e s the marketing mix is a powerful way to understand the Having examined some examples of how to drivers of the business, to quantify what works and use the market map to one’s advantage, it is equally what doesn’t, and to evaluate the mix of tactics and important to note some principles of what not to do, campaigns. However, when used in an isolated fashion or what to avoid as singular quick-fixes. to reduce costs or improve ROI without effective growth Fight Fire with Fire. The temptation to fight strategies to guide the decisions, such “optimization” store brand growth by “right-pricing” the brand, or does nothing more than facilitate a more efficient increasing price promotion, may yield short-term deterioration of the brand (using proven tactics to do it!). relief. However, unless the brand aspires to become Of course, continuous improvement in execution just like a store brand, this is unlikely to drive is important, but effective marketers seldom use the profitable, long-term growth. It may even focus the efficiencies only to cut costs, reduce risk, or make brand on fighting an unwinnable battle in the wrong minor corrections to the mix. Effective marketers part of the competitive frame. use it primarily to fund their most promising top-line That said, pricing and promotion clearly play growth strategies — and to do it smarter along the way. critical roles in the overall marketing mix. Our ••• recommendation is to simulate and test pricing and promotion strategies. This should be done as part of a Marketers need a precise, fact-based understanding comprehensive growth strategy in which these levers of the market to determine the linkage between consumer play a precise supporting role to the main storyline of needs, benefits and behaviors. Knowing the basis of a consumer benefit-centered strategy. competition is critical, not only against store brands, Undermine Product Effectiveness. Every but against the entire relevant frame of reference. promising strategy is ultimately predicated on the A market map is a dynamic reflection of the ever- assumption that the product must deliver on consumer changing ways that consumers prioritize needs and expectations. Reducing costs to improve margin can organize behavior. With this knowledge, the marketer be risky. For some brands, years of small, seemingly will understand the benefits a brand should reasonably innocuous cost reductions affecting ingredients, strive to own through positioning and innovation. packaging, amount, and quality have compounded Markets can be changed by the actions or inactions themselves into noticeable changes in overall product of marketers — to the benefit of some brands and the appeal. It is clear that the growth of store brands detriment of others. Only the fittest will survive. n in several categories is due to years of gradual cost reductions by the branded products. Without meaningful product differentiation VINIT DOSHI is a principal with Henry versus store brands, justifying a price advantage Rak Consulting Partners, a growth- becomes difficult for a branded product. For this strategy consulting firm. Vinit can be reason, we recommend testing for relative product reached at vdoshi@hrcpinsights.com preference in the context of a brand’s full competitive or (203) 540-5524. To learn more about HRCP, visit www.hrcpinsights.com. frame-of-reference. For example, if a frozen sandwich brand’s true JANUARY/FEBRUARY 2010  THE HUB 19