Name: Suzanne
Bio: Suzanne is a consumer goods researcher with 15 years experience. She has a keen interest in new product development and innovation helping clients through the product journey.
Posts by :
- Woolworths Select - 53%
- Homebrand - 39%
- You’ll Love Coles - 34%
- Coles Smart Buy - 34%
- Aldi Brands - 21%
- Identifying white space opportunities
- Developing relevant ideas
- Filtering those ideas through early stage screening
- Prioritising and optimising those that make it through the screening
- Testing them against established volumetric benchmarks to minimise financial risk and ensure a successful launch, and
- Monitoring product success in the marketplace, our clients’ position versus competitors, and helping find ways to reduce costs while simultaneously building brand equity and maintaining quality standards.
- The Committed Cost Cutters (12% of the population): Who view buying private label as a responsible use of their often limited family budgets and are perfectly happy with the quality.
- The Smart Selectors (24% of the population): Who believe that brands are all hype and are happy that they can see through them to know that private label products are really just the same thing.
- The Success Symbolisers (30% of the population): Often young, this segment feels that their budget has forced them into private label. They are not convinced of its quality and feel self conscious about buying it.
- The Label Lovers (11% of the population): Will sneak a private label product or two but only if no one sees – they’re put off by poor packaging and a lack of innovation.
- The Belt Tighteners (10% of the population): Often facing tougher circumstances due to the recession they feel forced into purchasing private label due to their finances but are hoping it’s just a temporary thing.
- The Brand Believers (13% of the population): Feel strongly that brands are better and are annoyed that Private Label products are taking over the shelves.
The role of occasion in innovation
September 7th, 2010
As I touched on in a previous post, occasion plays a crucial role in the innovation process for fast moving consumer goods. In order to influence consumer choice, we must first comprehensively understand it. To do this we need to understand usage occasion and occasion requirements.
Consumers are confronted with a wide assortment of occasions, each with a unique set of requirements driven by the occasion circumstances/ facts. We need to understand the occasion at a level far deeper than occasion facts (the who, what, when, where, facts of an occasion). For example, each person sitting in a restaurant at a specific location and time of day are in the exact same occasion-fact situation; however, everyone orders something different. We need to understand the why underlying occasion choice, not just the what/when/where aspects, which are just not as actionable.
Each unique occasion sparks a set of occasion requirements and consumers perceptually align existing market alternatives to these needs to help formulate a consideration set. Choice is then a ‘best available’ fit exercise, using past experiences to evaluate which of the alternatives is the most desired for the occasion at hand.
At this point, we have the opportunity to identify white space in the market, as not all occasions have the ideal option available to fulfill the consumer’s needs. Opportunity surfaces when existing market alternatives fall short of ideal occasion or product requirements.
Hence, it is vital to study the usage occasion, as each one is unique and drives its own set of unique requirements. It is important to note the distinction between purchase occasion and usage occasion – purchase occasion drivers are too blunt to capture the granularity of occasion choice.
For example, a consumer makes a single purchase decision when they buy a 12-pack of Coke; however, that 12-pack can be emptied in 12 highly unique consumption occasions with varied levels of product satisfaction. The Coke may be used as a mid-morning energy pickup, a lunchtime food companion, an alcoholic mixer, or an afternoon sweet snack and so on. The performance ability of each can of Coke in each unique occasion is likely very different – perfect as a food partner yet lacking key benefits as an ideal energy boost. We need to understand the occasion-centric performance of market alternatives against occasion needs to identify opportunities to innovate.
Occasion is one of the primary building blocks in the innovation process. A gap between ideal need and best available performance can only be discovered by studying the usage occasion, and can deliver the power to shift purchase behavior.
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Private label – wax or wane in the upturn?
June 29th, 2010
In 2009, we ran a study on shopper consideration of private label products to look at consumer perceptions, attitudes and usage of these value-based offers during the GFC. Since then, the economic climate has changed with stability and consumer confidence returning. But does this mean that people have moved back to branded products, from their private label habits? A study we conducted in June this year, found the majority had not.
When we first looked at this study we hypothesised that shoppers had a variety of attitudes towards buying private label. Some were doing it to cut costs, others to display thrift, and some were even doing it despite an aversion to the private label offer as they felt they could ‘get away with it’ in certain categories. We segmented consumers into six groups based on their attitudes and behaviours toward private label, which I discussed in a previous post. To recap, the segments and their size a year on are displayed below.
These segments, and the behaviours and attitudes of the groups have remained largely unchanged, but there have been some shifts since stability returned. Many predicted that with less financial pressure people would move back to the more highly reputed branded products. This is true to a certain degree, but only for groups who are Brand Believers or Success Symbolisers and only on a small scale. These groups were observed to grow in size and reduce their number of private label purchases between 2009 and 2010. However, groups that are pro private label have remained the same or increased in terms of size, as can be seen in the Committed Cost Cutters group. These groups show no sign of waning and have boosted the share of private label in their baskets indicating their appreciation for the offer is growing.
Top 5 private label brands:
The attitudinal profiling and figures over the past year to me display that private label will continue to grow, even without cost cutting as an urgent driver. Woolworths enjoys the greatest share for a single private label brand, with 53% of Australians currently purchasing the Woolworths Select brand. Similarly Coles performs well with two of their private label products currently bought by 34% of the population. And Aldi brands continue to show growth, combining to be the fifth most purchased private label offer. These brands will continue to grow as challenges for branded goods, making the importance of innovation and differentiation to the branded manufacturers ever more critical.
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Suzanne’s top 5 innovation tips
June 28th, 2010
Capitalising on true ‘white space’ opportunities in a competitive market is no longer required for growth alone – it is a matter of survival. There are threats out there to even the strongest brands these days; no-one can afford to get complacent. Identifying opportunities based on consumer needs sounds easy enough, but so often innovation attempts fail. With new product failure rates higher than ever, what we need is a well defined process with clear objectives involving the right internal and external stakeholders to help find better ideas and find them fast!
To reduce risk, we need to reduce our reliance on intuitive decision making. The steps to achieving innovation are easy enough to grasp, but in practice it is easy to lose sight of the details. So how can we stay more focussed in our quest to achieve innovation-based growth?
My top five areas to focus on are:
1. The Consumer: It all starts with consumers, of course! Each consumer has varied attitudes towards different facets of life (e.g. health, money, family, etc.) which predisposes them towards certain preferences. We need to understand consumer choice to influence it in the future, how consumer mind-frames and lifestyles impact choice and keep these insights at the heart of everything we do.
2. Relevance: The innovation must address a genuine consumer need. Consumers are confronted with many purchase occasions, each with a unique set of requirements every day. Consumers perceptually align existing market alternatives to these requirements to help formulate their consideration set; their choice is then a ‘best available fit’ exercise. However, the option chosen does not always perfectly align with the ideal occasion needs. Opportunity arises from this unfulfilled need. I will cover the role occasion plays in a subsequent blog.
3. Differentiation: The innovation must have a recognisable point of difference. It is surprising how many products come to ever more cluttered market places, with no discernible difference from the competition. The fact that a new product has a particular ingredient or feature compared to others does not count as differentiation if the consumer is not aware of this feature in the first place. Most consumers are not aware of the inner workings of the products they use and cannot be expected to appreciate what to them may be meaningless differences. Crucially, the differentiation has to be recognisable. Being ‘new and improved’ is not good enough – originality is paramount to success.
4. Benefit: The point of difference has to be perceived as a benefit. Assuming that the new product has a point of differentiation, the next critical element is that this differentiation leads to a benefit. Put another way, it is not enough to be different, the product has to be better. As marketers, we tend to start with the benefits to the consumer and determine what functionality is required to deliver them. This is usually achieved using studies that understand consumer needs, or try to develop insights based on where current products are letting consumers down. But this isn’t always perfect. While starting with the required benefit would appear to solve the problems, the trouble is that one then has to design the appropriate product that actually does have a functional point of difference that delivers this benefit. Many new products fail because they simply fail to deliver the promised benefit.
5. Excitement: The benefit must create enough excitement to overcome barriers to trial and usage. The final hurdle is that the strength of the benefit is sufficient to overcome any barriers to trial. Factors such as price, concerns over safety or basic inertia can be major obstacles that have to be overcome. Many consumers in a lot of categories do not like to take the ‘risk’ of change, even though it appears to be against their own interests. People sticking with a more expensive utility supplier or a bank that offers little benefit are obvious examples. We have found that when a consumer is genuinely excited about an idea this ‘wow factor’ provides a means of overcoming a consumer’s natural inertia and barriers to trial. Look no further than the iPad – the excitement generated overcame it’s widely discussed limitations and whipped the market into a frenzy. Ideas that offer a clear, tangible benefit get people excited, in any category.
With these five tips in mind, it is possible to generate a granular-level understanding of what success looks like and prescriptive direction to achieve it. But beyond this, a mindset to constantly challenge and think outside the square is required to spawn the innovation process. Companies often find themselves in an innovation decision making comfort zone. We need to step outside that comfort zone to generate the authenticity and originality that no other brand can mimic.
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The front end of innovation
April 27th, 2010
By nature, innovation and new product development is a road littered by failure – most new product development programs require in excess of 3,000 ideas to achieve a single market success. The delicate balance of matching well understood consumer needs with a relevantly designed product or service is hard to reach. But with the right approach, companies can negotiate this path to arrive at a product that generates the excitement required to break into the market and capture the imagination of consumers.
New products fail for a variety of reasons – product problems or defects, lack of effective marketing effort, higher-than anticipated costs, competitive reaction, and so on – but the number one cause of new product failure is inadequate market analysis – failure to understand and adequately respond to unmet consumer needs.
Because identifying and qualifying genuine growth opportunities is challenging, many companies leap from high-level product category interest to concept development. It’s not that they ignore category assessment overall, but the urge to “innovate” quickly leads to a compacted process that skips necessary steps. The “front end,” if you will, is incomplete, so there isn’t a clear link between consumer needs and products that are ultimately developed.
As a research partner in the Product of the Year program, and a company with a proud heritage in innovation and new product development, we’ve found that concepts lead to more successful product launches when several steps are included to make the process more robust – including a complete analysis of the competitive arena, identification of specific situation-based unmet consumer needs, formation of a clear understanding of the white spaces where your brand can compete effectively, and ideation that is focused on the opportunities uncovered during this strategic foundation.
Building in the consumer need
Research we conducted recently as part of the Product of the Year awards found that some of the core desires consumers have are products that make their lives easier and save them time, products that are environmentally friendly, or products that improve their health. Companies that dig deeper to find out exactly what that means in their categories will take a longer term view, re-think business strategies and focus resources on a smaller number of targeted innovation opportunities. They understand that, if they invest properly in the front end of the innovation process, it may take a little longer to start developing alternatives, but they save time and money in the long run, and have a much better chance of developing successful new products.
TNS has been conducting research and uncovering marketing insights for 60 years, covering issues surrounding branding and communications, retail strategy, shopper attitudes and behavior, stakeholder management, Innovation and Product Development, which we refer to as “IPD” for short. Today TNS has thousands of employees worldwide dedicated to IPD research, making it one of our strongest areas of expertise. There are very few IPD issues or objectives we have not encountered or worked on.
Whatever techniques we use, we believe it is important to keep consumer input at the heart of product development and innovation initiatives by:
Since we evaluate so many new product ideas, we get a unique opportunity to see successful products well before they make it to market – and many, many more that never get anywhere near the launch pad. Whether a client is focusing on very close-in product improvements, line extensions, category launches in unfamiliar categories, or disruptive innovation, we find that their chance of success is greatly enhanced by emphasising upfront strategic planning and alignment of goals – the front end of innovation.
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New purchasing mentality installs private label as a long-term threat to brands
March 10th, 2010
The battle for the supermarket floor between private label and branded goods has not subsided in the aftermarth of the GFC. Having been given permission to re-assess what constitutes value, consumers are continuing to show growing interest and trial of private label, even in categories traditionally resistant to the threat.
Branded goods face the prospect of further erosion in their market, unless they’re able to convince shoppers that, at a higher price point, their product is tangibly or emotionally better than the competition. Alarmingly for brands, perceptions of poor quality, inferior status image, poor packaging and lack of innovation, which are still associated with private label, no longer turn us off – a large portion of Australians buy despite these concerns. Let’s look at the reasons behind this phenomenon.
Private label’s growth (to over 20% of the market) was accelerated greatly by the economic downturn, but when we look at the motivators behind its purchase, we find that consumers are buying it for a multitude of reasons. People opt for the cheaper private label offer to save money to spend on the family, out of the belief that brands are all hype and not of superior quality, and to fulfil a desire to display thrift. We can group private label buyers into six distinct segments:
The message for branded manufacturers is clear – be complacent at your own risk. We can say with certainty that, the smartbuys, homebrands, and black ‘n golds will continue to grow into serious threats to brands. Consumers have a new purchasing mentality, a desire to be thrifty with their spending and are learning to trial private label as it might be just as good.
There is a need to understand how shoppers evaluate the private label offer in your category. Purchasing behaviour is being driven by a variety of motivation and does not always reflect loyalty to private label, but can also be an indication that branded manufacturers have few true ‘brand believers’. The implication for retailers and manufacturers is there is no one-size-fits-all approach to tackling the challenge of private label.
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