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Get More Innovation into Market
                              Ideas to Drive New Product Success
                                           InnoQuest*Vantis
                                                     March 2013



                     Break                                           Price
Average   Luxury    Through    Commodity   Novelty     Curiosity   Resistant   Premium   Winner   Value Brand   Want
InnoQuest*Vantis - Range




        EXPLORE      EVALUATE   OPTIMIZE     FINALIZE       MONITOR
         FUZZY       CONCEPTS              PROPOSITION   PERFORMANCE &
       FRONT END                             & LAUNCH      MAXIMIZE ROI




                                                                          2
Experience

Large Durables        Financial Services   Technology                  New to the World
Appliances            Banking              Computing                   Surgical techniques
Garage Organization   Mortgages            Tablets                     Robots
Bath                  Investments          Software
Yard                  Mobile Payments
Building Materials


Small Durables        Consumer             Telecom                     Smart body
Cleaning              Electronics          Smart phones                Fitness
Tools                 Video                Cable                       Disease monitoring
Bath                  Audio                Other “content” providers   Tracking
Lighting              Camera               Other “data” applications
Decor


Smart house
Climate control                                                 25 years
Security
Appliance control                                  30 thousand products
Sensory management
Personal emergency                                          84 countries
                                                                                             3
4
On the one hand, perhaps consumers can’t tell us what’s
innovative, especially in a quantifiable way


On the other hand, without voice of the customer, most
companies innovate too much based on what they can
produce


And in between the extremes of consumer- vs. tech-centric
are a variety of approaches: lead users, gurus, process
oriented…that may or may not be predictive
Innovation is hard!



  46% of resources devoted to failed/cancelled products
  About 80% of ideas and concepts tested will never launch

  About 70% of launched products will disappear within two years


                                  Source: Booz Allen
                                                                   6
Problems with Innovation Funnels




         70%                                                 10%
                                                                 Core
               Core


                                                             20%
                                                              Adjacent
        20%
         Adjacent

                                                               70%
          10%                                           Transformational
Transformational



                                  Innovation Activity                      Innovation Returns
Source: Harvard Business Review

                                                                                                7
Test Well, Don’t Do Well
     Things past peak on trend (e.g., investment advice, energy
     savings appliances, more points per dollar on loyalty programs)
     Incremental line extensions
     Straight give-aways on profit per unit

Do Well, Don’t Test Well
   Things a little before their time (e.g., Personal Readers,
     PVR, Single Serve Coffee Machines, Netflix)
     ‘A little too different’ things that strike an
     emotional cord – done well (e.g., Snuggie)
What Could Be Improved

The traditional measurement system is mis-used

The evaluative view is not broad enough

Insights erode on their journey to commercialization
#1
Typical Measurement Systems Mis-used
                Look for the right things



                                            10
The Trouble With One Measure




                                                                                                               Top Two Box %
                   16%       21%        18%    34%             26%             28%              21%          19%           33%




                                                 8%
Purchase Intent




                                                                                                                          12%
                                                                               8%
                                                                9%
                              6%                                                                 4%
                                        5%                                                                   6%
                    3%
                                               26%
                                                                               20%                                        21%
                             15%                               17%                              17%
                   13%                  13%                                                                  13%


                   Nokia    Amazon     Apple   HP              Apple          Palm               LG         Apple         Dell
                  Booklet    Kindle     TV     Mini           iPhone           Pre            Chocolate     iPad        Inspiron
                    3G         2                                3Gs                                                       11z



                                                  Definitely Would Buy   Probably Would Buy

                                      Failed                                                              Succeeded
                                                                                                                                   13
Multiple Measures is Better, But Not Enough

                                                  Placement in Vantis Database

                                     Raw        Bottom   Below           Above    Top
           Key Measure Question                                  Avg.
                                    Score        20%     Avg.            Avg.    20%
Seek Information (Top Two Box %)     95%

     Purchase Intent (Top Box %)     22%

 Purchase Intent (Top Two Box %)     45%

      Liking (Mean 6-Point Scale)    3.2

 Price/Value (Mean 5-Point Scale)    2.3

 Uniqueness (Mean 5-Point Scale)     3.6

         Believability (Top Box%)    41%

Need Fulfillment (Top Two Box %)     22%


            Market Success Score                                        115
                                            0              67            133            200



                                                                                              14
It’s The Total Profile That Matters

                                 Placement in Vantis Database

                               Bottom   Below
                                                Avg.
                                                       Above    Top   When we look at these
                                20%     Avg.           Avg.    20%
                                                                      comparisons, we are looking at
           Seek Information                                           patterns of scores.
Purchase Intent (Committed)                                           Like a constellation.
            Purchase Intent                                           We use this pattern to
                     Liking                                           understand a concepts
                                                                      strengths and weaknesses.
                Price/Value

               Uniqueness
                                                                      And its true potential.
               Believability

           Need Fulfillment




                                                                                                       15
Seemingly ‘Middle Performers’ Are Often Dismissed Too Early




                     Winner

          Top
       performer     Under-priced
       archetypes    Good concept

                       Breakthrough                                            Potential future hit
                                                        

?
                                           Over-priced       Niche/targeted
         Middle        Me too                                                  Skeptical
                                          Average          Atypical
       performer       For Want                                                Communications
                                          Luxury           Value resistant
       archetypes      Value                                                    Challenged
                                          Commodity        Unconvincing
                        Branding                                                Caught in middle




          Poor
       performer     Laggard
       archetypes




                                                                                                        16
17
18
Each Archetype Profile is Assessed in the Context of the Commercial Game Plan




                   High Liking and Uniqueness, Top Box Purchase Intent often
                                                                                                             30,000
                   average or above, Price / Value often below average
                                                                                                              24     80


      Pricing    Normally needs to come down as quickly as production economies permit
                 Needs to be designed for the masses; generational and line management is key – having a
     Product     roadmap for the evolving product line
   Promotion     Advance PR with mass support positioned to a non-sophisticated consumer
                 Mass and elite distribution; mass distribution often rolled out slowly starting in outlets with a
  Distribution   high CDI, sales person/channel incentivizing is important but often only affordable in elite
                 channels; POS demo is useful




                                                                                                                          19
#2
The Evaluative View is Not Broad Enough
                      Look Past the Data



                                           20
5 Essential Factors Ultimately Lead to Product Success




  Sales Potential              Penetration and Revenue Potential


  Communication                Simple and single-minded, focused, effective


  Audience                     Clearly defined and sizable, interested, reachable


  Long Term                    Sustainable, Evident possibilities for new revenue streams


  Edge                        
                                  Sells itself (real benefits), generates buzz, Sustainable
                                  competitive advantage




                                                                                              21
Consumer Goods Framework




                   Innovation Performance Framework
            Consumer            Market &           Marketing
             Demand             Execution           Force

          Relevance            Market Structure      Media

                              Shelf Visibility &
          Expensiveness                             Promotion
                              Adv. Brand Recall

          Differentiation      Comparability of    Distribution
                                Size & Range




                                                                  22
#3
                          Insights Erode
(or were not the foundation in the first place)




                                                  23
Defining an Insight



                       The REVELATION of a
                         SIGNIFICANT GAP
                        between consumers’
                      ASPIRATIONS and what
                            they perceive
                       as AVAILABLE, which
                        can be turned into a
                              BUSINESS
                           OPPORTUNITY



                                               24
Framework for Insight Development



                                              Personally       Occurs in
                                              Engaging         Daily life

                   Tension            Important
                                                                      Frequent


                               Consumer is
                                Ready to
      Revelation                 Change
                                                           Credible
                                behavior




                                                                                 25
Assure Continuity of Insight




 Better                   Better    Better             Better
Insights                  Ideas    Concepts             Ads




 Product Development                     Copy Development
     Approaches                             Approaches

                                                                26
                                                                26
Assure Continuity of Insight




   Better                   Better                           Better                            Better
  Insights                  Ideas                           Concepts                            Ads



     Don’t               If insights are                    Keep it real
 compromise               known to be
high standards          strong, you can                      Measure not
                          screen more                      just appeal but
                              easily                        how the parts
                                                            of the concept
                                                               resonate
                                           Avoid feature                      Directly link
                                             myopia                          testing results
                                                                               to creative
                                                                                  briefs
                                                                                                        27
                                                                                                        27
Summary



• Consumers can definitely send us signals about true and game-changing
  innovation if we look at their feedback through the right lens – pay special attention
  to those ideas in the middle


• Consumer feedback needs to be systematically married with market and marketing
  success factors to guide the right action and excite the organization


• Rigor in what constitutes an Insight and how it is shepherded through the
  commercialization process will lead to more success


• Doesn’t require reinventing the wheel
                                                                                       28
                                                                                       28
Jason Brown
President, InnoQuest*Vantis

 jason.brown@ipsos.com
     P: 212-584-9248




                              29
                                   2
Segment Potential Index and Incidence – Bose SoundLink wireless music system

    Target Segment for Bose SoundLink consists of:                    Market Success Score
       Age 18-34
       Smartphone owners                                                                                            78
       Value quality over price, brand etc
                                                                          0                                 67                           133                      200

                                                                       Key Measure Scorecard
         Segment Incidence:           24% - Sizable
                                                                                                            Bottom 20      Below                 Above     Top 20
                             SPI:     135 - Interested                                                      Percentile    Average     Average   Average   Percentile
                                                                    Seek Information (Top Two Box %)             
                                                                          Purchase Intent (Top Box %)                                             
   Likely buyers for this concept are heavy                           Purchase Intent (Top Two Box %)                       
   newspaper and magazine subscribers, providing
                                                                              Liking (Mean 6-Point Scale)                                                     
   a direct channel to reach the right audience
                                                                       Price/Value (Mean 5-Point Scale)                     Good/
                                                                      Uniqueness (Mean 5-Point Scale)                                             

            Sales Potential                                                    Believability (Top Box%)                     Strong                           
                                                                      Need Fulfillment (Top Two Box %)                      
            Communication                         
                 Audience                        
                                                                       Communications Indices

                Long Term                                                     Message Power Score                                      
                                                                                                                                                             
                      Edge                        
                                                                                   Buzz Power Score


Note: The target profile for this concept was used to define the appropriate segment.                                           Strong Buzz
                                                                                                                                                                        30
Example 2 – Dell Cloud Computer




                                  31
Segment Potential Index and Incidence – Dell Cloud Computer

    Target Segment for Bose Dell Cloud Computer                       Market Success Score
     consists of:
       Smartphone owners
                                                                                                                               106
       More frequent streaming of content
                                                                          0                                 67                          133                      200

                                                                       Key Measure Scorecard
         Segment Incidence:           24% - Sizable
                                                                                                            Bottom 20     Below                 Above     Top 20
                             SPI:     135 - Interested                                                      Percentile   Average     Average   Average   Percentile
                                                                    Seek Information (Top Two Box %)                       
                                                                          Purchase Intent (Top Box %)                                            
   Likely buyers for this concept are heavy                           Purchase Intent (Top Two Box %)                                  
   newspaper and magazine subscribers, providing
                                                                              Liking (Mean 6-Point Scale)                              
   a direct channel to reach the right audience
                                                                       Price/Value (Mean 5-Point Scale)                     Good/                
                                                                      Uniqueness (Mean 5-Point Scale)                                            

            Sales Potential                                                    Believability (Top Box%)                   Strong
                                                                                                                           
                                                                      Need Fulfillment (Top Two Box %)                     
            Communication                         
                 Audience                        
                                                                       Communications Indices

                Long Term                                                     Message Power Score                                                          
                                                                                                                                                            
                      Edge                        
                                                                                   Buzz Power Score


Note: The target profile for this concept was used to define the appropriate segment.                                          Strong Buzz
                                                                                                                                                                       32
Each Archetype Profile is Assessed in the Context of the Commercial Game Plan




                 30,000         cases




                   24         archetypes




                                                                                33

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Making Innovations That Inspire: A Webinar To Learn How To Get More Innovations To Market

  • 1. Get More Innovation into Market Ideas to Drive New Product Success InnoQuest*Vantis March 2013 Break Price Average Luxury Through Commodity Novelty Curiosity Resistant Premium Winner Value Brand Want
  • 2. InnoQuest*Vantis - Range EXPLORE EVALUATE OPTIMIZE FINALIZE MONITOR FUZZY CONCEPTS PROPOSITION PERFORMANCE & FRONT END & LAUNCH MAXIMIZE ROI 2
  • 3. Experience Large Durables Financial Services Technology New to the World Appliances Banking Computing Surgical techniques Garage Organization Mortgages Tablets Robots Bath Investments Software Yard Mobile Payments Building Materials Small Durables Consumer Telecom Smart body Cleaning Electronics Smart phones Fitness Tools Video Cable Disease monitoring Bath Audio Other “content” providers Tracking Lighting Camera Other “data” applications Decor Smart house Climate control 25 years Security Appliance control 30 thousand products Sensory management Personal emergency 84 countries 3
  • 4. 4
  • 5. On the one hand, perhaps consumers can’t tell us what’s innovative, especially in a quantifiable way On the other hand, without voice of the customer, most companies innovate too much based on what they can produce And in between the extremes of consumer- vs. tech-centric are a variety of approaches: lead users, gurus, process oriented…that may or may not be predictive
  • 6. Innovation is hard! 46% of resources devoted to failed/cancelled products About 80% of ideas and concepts tested will never launch About 70% of launched products will disappear within two years Source: Booz Allen 6
  • 7. Problems with Innovation Funnels 70% 10% Core Core 20% Adjacent 20% Adjacent 70% 10% Transformational Transformational Innovation Activity Innovation Returns Source: Harvard Business Review 7
  • 8. Test Well, Don’t Do Well Things past peak on trend (e.g., investment advice, energy savings appliances, more points per dollar on loyalty programs) Incremental line extensions Straight give-aways on profit per unit Do Well, Don’t Test Well Things a little before their time (e.g., Personal Readers, PVR, Single Serve Coffee Machines, Netflix) ‘A little too different’ things that strike an emotional cord – done well (e.g., Snuggie)
  • 9. What Could Be Improved The traditional measurement system is mis-used The evaluative view is not broad enough Insights erode on their journey to commercialization
  • 10. #1 Typical Measurement Systems Mis-used Look for the right things 10
  • 11.
  • 12.
  • 13. The Trouble With One Measure Top Two Box % 16% 21% 18% 34% 26% 28% 21% 19% 33% 8% Purchase Intent 12% 8% 9% 6% 4% 5% 6% 3% 26% 20% 21% 15% 17% 17% 13% 13% 13% Nokia Amazon Apple HP Apple Palm LG Apple Dell Booklet Kindle TV Mini iPhone Pre Chocolate iPad Inspiron 3G 2 3Gs 11z Definitely Would Buy Probably Would Buy Failed Succeeded 13
  • 14. Multiple Measures is Better, But Not Enough Placement in Vantis Database Raw Bottom Below Above Top Key Measure Question Avg. Score 20% Avg. Avg. 20% Seek Information (Top Two Box %) 95% Purchase Intent (Top Box %) 22% Purchase Intent (Top Two Box %) 45% Liking (Mean 6-Point Scale) 3.2 Price/Value (Mean 5-Point Scale) 2.3 Uniqueness (Mean 5-Point Scale) 3.6 Believability (Top Box%) 41% Need Fulfillment (Top Two Box %) 22% Market Success Score 115 0 67 133 200 14
  • 15. It’s The Total Profile That Matters Placement in Vantis Database Bottom Below Avg. Above Top When we look at these 20% Avg. Avg. 20% comparisons, we are looking at Seek Information patterns of scores. Purchase Intent (Committed) Like a constellation. Purchase Intent We use this pattern to Liking understand a concepts strengths and weaknesses. Price/Value Uniqueness And its true potential. Believability Need Fulfillment 15
  • 16. Seemingly ‘Middle Performers’ Are Often Dismissed Too Early  Winner  Top performer  Under-priced archetypes  Good concept  Breakthrough  Potential future hit   ? Over-priced Niche/targeted Middle  Me too  Skeptical  Average  Atypical performer  For Want  Communications  Luxury  Value resistant archetypes  Value Challenged  Commodity  Unconvincing Branding  Caught in middle  Poor performer  Laggard archetypes 16
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  • 19. Each Archetype Profile is Assessed in the Context of the Commercial Game Plan High Liking and Uniqueness, Top Box Purchase Intent often 30,000 average or above, Price / Value often below average 24 80 Pricing Normally needs to come down as quickly as production economies permit Needs to be designed for the masses; generational and line management is key – having a Product roadmap for the evolving product line Promotion Advance PR with mass support positioned to a non-sophisticated consumer Mass and elite distribution; mass distribution often rolled out slowly starting in outlets with a Distribution high CDI, sales person/channel incentivizing is important but often only affordable in elite channels; POS demo is useful 19
  • 20. #2 The Evaluative View is Not Broad Enough Look Past the Data 20
  • 21. 5 Essential Factors Ultimately Lead to Product Success Sales Potential  Penetration and Revenue Potential Communication  Simple and single-minded, focused, effective Audience  Clearly defined and sizable, interested, reachable Long Term  Sustainable, Evident possibilities for new revenue streams Edge  Sells itself (real benefits), generates buzz, Sustainable competitive advantage 21
  • 22. Consumer Goods Framework Innovation Performance Framework Consumer Market & Marketing Demand Execution Force Relevance Market Structure Media Shelf Visibility & Expensiveness Promotion Adv. Brand Recall Differentiation Comparability of Distribution Size & Range 22
  • 23. #3 Insights Erode (or were not the foundation in the first place) 23
  • 24. Defining an Insight The REVELATION of a SIGNIFICANT GAP between consumers’ ASPIRATIONS and what they perceive as AVAILABLE, which can be turned into a BUSINESS OPPORTUNITY 24
  • 25. Framework for Insight Development Personally Occurs in Engaging Daily life Tension Important Frequent Consumer is Ready to Revelation Change Credible behavior 25
  • 26. Assure Continuity of Insight Better Better Better Better Insights Ideas Concepts Ads Product Development Copy Development Approaches Approaches 26 26
  • 27. Assure Continuity of Insight Better Better Better Better Insights Ideas Concepts Ads Don’t If insights are Keep it real compromise known to be high standards strong, you can Measure not screen more just appeal but easily how the parts of the concept resonate Avoid feature Directly link myopia testing results to creative briefs 27 27
  • 28. Summary • Consumers can definitely send us signals about true and game-changing innovation if we look at their feedback through the right lens – pay special attention to those ideas in the middle • Consumer feedback needs to be systematically married with market and marketing success factors to guide the right action and excite the organization • Rigor in what constitutes an Insight and how it is shepherded through the commercialization process will lead to more success • Doesn’t require reinventing the wheel 28 28
  • 29. Jason Brown President, InnoQuest*Vantis jason.brown@ipsos.com P: 212-584-9248 29 2
  • 30. Segment Potential Index and Incidence – Bose SoundLink wireless music system  Target Segment for Bose SoundLink consists of: Market Success Score  Age 18-34  Smartphone owners 78  Value quality over price, brand etc 0 67 133 200 Key Measure Scorecard Segment Incidence: 24% - Sizable Bottom 20 Below Above Top 20 SPI: 135 - Interested Percentile Average Average Average Percentile Seek Information (Top Two Box %)  Purchase Intent (Top Box %)  Likely buyers for this concept are heavy Purchase Intent (Top Two Box %)  newspaper and magazine subscribers, providing Liking (Mean 6-Point Scale)  a direct channel to reach the right audience Price/Value (Mean 5-Point Scale)  Good/ Uniqueness (Mean 5-Point Scale)  Sales Potential  Believability (Top Box%) Strong  Need Fulfillment (Top Two Box %)  Communication  Audience  Communications Indices Long Term  Message Power Score   Edge  Buzz Power Score Note: The target profile for this concept was used to define the appropriate segment. Strong Buzz 30
  • 31. Example 2 – Dell Cloud Computer 31
  • 32. Segment Potential Index and Incidence – Dell Cloud Computer  Target Segment for Bose Dell Cloud Computer Market Success Score consists of:  Smartphone owners 106  More frequent streaming of content 0 67 133 200 Key Measure Scorecard Segment Incidence: 24% - Sizable Bottom 20 Below Above Top 20 SPI: 135 - Interested Percentile Average Average Average Percentile Seek Information (Top Two Box %)  Purchase Intent (Top Box %)  Likely buyers for this concept are heavy Purchase Intent (Top Two Box %)  newspaper and magazine subscribers, providing Liking (Mean 6-Point Scale)  a direct channel to reach the right audience Price/Value (Mean 5-Point Scale) Good/  Uniqueness (Mean 5-Point Scale)  Sales Potential  Believability (Top Box%) Strong  Need Fulfillment (Top Two Box %)  Communication  Audience  Communications Indices Long Term  Message Power Score   Edge  Buzz Power Score Note: The target profile for this concept was used to define the appropriate segment. Strong Buzz 32
  • 33. Each Archetype Profile is Assessed in the Context of the Commercial Game Plan 30,000 cases 24 archetypes 33