Innovation Development & Market Launch
Innovation Development
& Market Launch
Seminar for Honors Academy
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Innovation Development & Market Launch
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WELCOME!
GLAD YOU ARE HERE !!!
Innovation Development & Market Launch
Lecturer
Ales Kodat
Manager Strategy, Cheese & Grocery Category
Kraft Foods Europe Gmbh
Zürich Area, Switzerland
Food & Beverages Industry
Introduction
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Experienced & successful marketing / commercial professional
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15 years at top FMCG companies (Kraft Foods, Danone Group, Wrigley’s)
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5 years international assignments
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Businesses leadership for local and European product categories
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Rich experience in strategy development and implementation
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Delivering results through managing directly reporting and cross-functional teams
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Excellent communication skills, fast learning, flexibility
Innovation Development & Market Launch
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1.
Innovation? Why?
2.
Brand objectives vs. innovation strategy
3.
Innovation development process & case study
4.
Few hints about innovations
5.
Key terms & definitions
Seminar Content
Innovation Development & Market Launch
Seminar Ground Rules
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Participate
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Contribute
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Ask Questions
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Be On Time
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No Cell Phones
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No Beepers
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(No Laptops)
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One Speaker at a Time, please!
Innovation Development & Market Launch
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1.
Innovation? Why?
2.
Brand objectives vs. innovation strategy
3.
Innovation development process & case study
4.
Few hints about innovations
5.
Key terms & definitions
Seminar Content
Innovation Development & Market Launch
1.
GROW
key business indicators
–
revenue, profit, no. of visitors, no. of outlets…
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replace not performing products or services
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address new consumer needs
2.
DEFEND
against
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competitors (branded, non-branded )
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commodity increases (sugar, cocoa beans, oil…)
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governmental interventions (increased taxes, decreased
subsidies…)
3.
REORIENTATE business focus
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move to new market segment (e.g. from glass production to
food, BSN – Danone Group)
Why do companies and/or brands innovate?
Innovation? Why?
most often
Innovation Development & Market Launch
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How do the companies and/or brands innovate?
Development
(internal, external)
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breakthrough innovation
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new product range
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re-launch, quality improvement
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geographical roll-out
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productivity
Acquisition
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company (competitor)
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patent (technology)
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license
Innovation? Why?
most often
most often
Innovation Development & Market Launch
Ok… but who’s gonna buy it?
Consumer segmentation!
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“Strategic Value Consumer” model
used by Kraft Foods
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Strategic Value Consumer is the
behaviorally homogenous group of
people we believe we can motivate
to make the fastest & most
efficient progress towards achieving
the growth required by the
business objective
•
Based on quantitative research
data (e.g. HH penetration,
consumption per capita, frequency
of purchase, share of requirement)
and qualitative research data
Innovation Development & Market Launch
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Launch execution is critical for product’s success
When
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The golden rule is:
BE THE FIRST ONE!
Where
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Be there, where your SVC is!
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retail shops, coffee shop, internet,
post office, home delivery, hospital,
fitness…
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Make your product visible!
•
Make your offer attractive!
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Have enough of the product!
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Tell consumers about it!
Innovation Development & Market Launch
1.
Innovation? Why?
2.
Brand objectives vs. innovation strategy
3.
Innovation development process & case study
4.
Few hints about innovations
5.
Key terms & definitions
Seminar Content
Innovation Development & Market Launch
12
Clear brand objectives + sound strategy FIRST! Innovation only after!
Brand objectives vs. innovation strategy
Innovation Development & Market Launch
1.
Innovation? Why?
2.
Brand objectives vs. innovation strategy
3.
Innovation development process & case study
4.
Few hints about innovations
5.
Key terms & definitions
Seminar Content
Innovation Development & Market Launch
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A new product development process has 4 standardized phases
Idea
Development
Development
Project
Execution
Project
Evaluation
Innovation development process
Key advantages of one process in one company:
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Focus on fewer, bigger, better ideas
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Flawless delivery
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Measurement of the process effectiveness
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Identification of best practices, sharing of learning, continuous
improvement
Innovation Development & Market Launch
Idea
Development
Development
Project
Execution
Project
Evaluation
7 – 25 moths required to get a new product to the market
Innovation development process
Identification of
innovation focus area
Consumer opportunity
exploration
Ideas & concepts
generation
Consumer testing
Innovation Project
Request
___
Product and
packaging
development
Communication
strategy and media
plan
Confirmatory testing
Develop market
launch plan
Launch Request
Materials order
Capex approval
Manufacturing
& Logistics plan
Sales Communication
Final forecast
First production
First shipments
___
3 – 7 months
3 months
6 months
12 months
(various KPIs)
Innovation Development & Market Launch
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CASE STUDY
Innovation Development & Market Launch
Background:
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3 Bit is an important chocolate bar brand for Kraft Foods
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Sold across all CE countries (CZ, SK, PL, HU, Baltics), produced in SK
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Launched in mid 1990’s as 1 product, later on XXL version launched
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Brand regularly animated through media support (TV, cinema), consumer
promotions (+25% free, samplings, Send&Win) and various promotions in trade
(price cuts, special displays, leaflets)
Brand situation in 2003-04:
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Years of the brand’s growth are over (revenue, profit and market share flat or
declining); the market of chocolate bars has been growing
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Key competitors (Mars, Nestle, Ferrero) became very active and attack your market
position through new & more affordable pricing, many new innovations,
significantly increased marketing spending (TV, promotions)
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High brand awareness; key brand image items: “for young people”,
“biscuit-cream-chocolate”, “3 pleasures in 1”
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Low loyalty to the brand; product considered too sweet and packaging too dark;
next generation of innovation not clearly identified
Case study
Innovation Development & Market Launch
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2005: tactical activities + new CE strategy development
2005
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Tactical media & promotion campaign (Win a date
with celebrity)
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Consumer promotion (+25% free)
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Renovation: new recipe & pack design
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Brand strategy review:
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Brand Positioning, SVC & Mktg. challenge
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Innovation Plan
(next 3 years)
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Develop new campaign idea & execution
Innovation Development & Market Launch
2006: breakthrough 360 campaign + first innovation in years
2006
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New 360 Campaign (“Granny”)
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Innovation: 3Bit Inverso
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Consumer promotion (+25% free)
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Brand strategy review:
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Develop new campaign execution
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Innovation Plan: identify the new generation concept
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2007: new 360 campaign + 2 innovations (limited editions)
2007
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New 360 Campaign (“Hydrant”)
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Inno: 3Bit Inverso XXL, Hot Edition (LED)
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Renovation: new pack design
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Consumer promotion (+25% free)
•
Brand strategy review:
–
Develop new campaign idea & execution
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Accelerate new innovation generation
Innovation Development & Market Launch
2008: new 3Bit generation launch + 360 campaign
2008
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New 360 Campaign (“Magnetic”)
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Innovation: 3Bit Intenssimo
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Promotion: 3Bit Hot Edition (LED)
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Brand strategy review:
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Improve P&L
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Develop new non-TV campaign
Innovation Development & Market Launch
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Key 3Bit activities 2005 – 2008 overview
2005
•
Tactical media & promotion campaign
(Win a date with celebrity)
•
Consumer promotion (+25% free)
•
Renovation: new recipe & pack design
•
Brand strategy review:
–
Brand Positioning, SVC & Mktg. challenge
–
Innovation Plan (next 3 years)
–
Develop new campaign idea & execution
2006
•
New 360 Campaign (“Granny”)
•
Innovation: 3Bit Inverso
•
Consumer promotion (+25% free)
•
Brand strategy review:
–
Develop new campaign execution
–
Innovation Plan: identify the new
generation concept
2007
•
New 360 Campaign (“Hydrant”)
•
Inno: 3Bit Inverso XXL, Hot Edition (LED)
•
Renovation: new pack design
•
Consumer promotion (+25% free)
•
Brand strategy review:
–
Develop new campaign idea & execution
–
Accelerate new innovation generation
2008
•
New 360 Campaign (“Magnetic”)
•
Innovation: 3Bit Intenssimo
•
Promotion: 3Bit Hot Edition (LED)
•
Brand strategy review:
–
Improve P&L
–
Develop new non-TV campaign
Case study
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Innovation Development & Market Launch
1.
Innovation? Why?
2.
Brand objectives vs. innovation strategy
3.
Innovation development process & case study
4.
Few hints about innovations
5.
Key terms & definitions
Seminar Content
Innovation Development & Market Launch
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1.
Innovation launch will not solve fundamental problems of a brand
(e.g. wrong pricing of the core range, poor image, product quality)
2.
Innovation will most probably not change the “brand loyalty”
3.
Innovation must have clear “brand fit”
4.
There is a high chance, that your innovation will fail (7-9 out of 10
innovations are said to be failures globally)
5.
Too much innovations can kill your brand
6.
Know your consumers inside out – get into their brains, think like
them, eat with them, sleep with them
7.
Know & closely monitor your competitors (they sometimes do good
job
)
8.
Use your imagination, brain & common sense to predict the future.
Remember, the past is well described in all the quantitative
& qualitative research data you have
9.
Learn from your mistakes and do not give up !
To bring an innovation to a day light is not a rocket science, but…
Innovation Development & Market Launch
1.
Innovation? Why?
2.
Brand objectives vs. innovation strategy
3.
Innovation development process & case study
4.
Few hints about innovations
5.
Key terms & definitions
Seminar Content
Innovation Development & Market Launch
26
Key Marketing Terms & Definitions 1/2
Key Terms & Definitions
Term
Definition
Benefit Ladder Defines the range of benefits from rational product attributes to emotional benefits to the consumer. Elementsinclude Emotional Benefit, Consumer Benefit, Product Benefit and Product Attributes. Brand Equity Undeniable brand equity or ownable elements that you can see, hear, taste. These elements or devices may be
rooted in history or have strong credentials with the consumer. They help define the brand or brand experience.
Brand Essence Describes what the brand means to most often heavy users, emphasizing more emotional and intangibleaspects. This is where the brand lives in the hearts and minds of consumers. Brand Foundation (BF) A document, which captures the core elements that define the brand, consisting of the benefit ladder, brand
positioning, brand essence and brand equities. Acts as starting point for all marketing strategy development.
Brand Positioning
Defines what the brand does for the consumer, tending to focus on rational and tangible benefits. Statement contains a clear frame of reference (FOR) for which competing products may be traded out and a point of difference (POD) that captures a distinctive “reason for being” within the FOR. Defines how a brand best competes in the market relative to other substitutes
Brand Strategy The broad approaches used with each Marketing Mix element that help achieve the brand’s Marketing Objective
Campaign / Communication Campaign
A coordinated communications effort, usually consisting of advertising, promotion, digital, PR etc. intended to continue thematically over time.
Category / Portfolio
Strategy Defines what the category or portfolio needs to do in order to achieve the business objectives)
Communication Strategy Encompasses the development of a communication platform/idea which serves as the basis upon which the
brand communicates to consumers through communications tools.
Consumer Promotion
Consumer Promotion (CP) is a marketing communications tool designed to positively change or reinforce specific consumer purchase and/or consumption behavior by adding value over and above the basic benefits of the brand. If done well (with value-added vs. price incentives), CP can also build brand equity.
Creative Development Strategy (CDS)
Creative Development Strategy (CDS), also called the creative brief, is a stimulus that inspires great work from an agencies creative team and provides a succinct, clear summary of the consumer and key message(s) for the communication.
Innovation Development & Market Launch
Key Marketing Terms & Definitions 2/2
Key Terms & Definitions
Term
Definition
IM
Integrated Marketing (IM) is a comprehensive process of understanding the needs of the consumer, orientating the company's manufacturing and sales process to meet those needs, applying integrated thinking to all marketing and management decisions and co-ordinating all company based messages (planned & unplanned)
IMC
Integrated Marketing Communications (IMC) is the practice of unifying the appropriate marketing
communications tools to send the consumer a consistent, persuasive message(s) that helps meet the assigned Task(s), and ultimately the communication goal.
Innovation Strategy Describes the Guiding Principles and Objectives, the Innovation Platforms and Focus Areas, the Innovation
Roadmap as well as the Roles and Responsibilities which apply to Innovation in that Category.
Media Flow Chart
A graphical and visual representation of the media mapped out in time (typically weeks) and by Medium. It includes: scheduling strategies, media mix, key holidays and other important dates, net-net media spend broken out monthly and quarterly, performance level by medium (GRP, Reach, etc), creative formats being used (30”, 1/1 page 4c). Usually provided in Excel format sourced by Mediatools.
Media Strategy & Planning
Is an elaborate and systematic plan of action designed to achieve the communication goal. Key elements of a media Strategy are Media Target group (“who” - based on the SVC), Media Channel mix (“where”) including budget allocation and performance (Reach, Frequency, GRP) and Scheduling strategy (“when”) - often
described as the phasing or timing strategy. The media strategy should also reflect the competitive environment and cover key competitive insights
Packaging Brief
The packaging brief is given to an outside agency to design the packaging. It usually includes information on the brand strategy, product, intended consumer, competition, and objectives of Integrated Marketing Communication ("IMC"). Agency is usualy briefed for Packaging Graphic Design or Packaging Structural Design.
Pricing Strategy
Aims to provide superior consumer brand value by optimising the price (the amount the consumer is expected to pay) relative to the brand benefit bundle and competitive frame, to achieve the brand business and marketing objectives.
Strategic Plan (SP) Document synthesizing the three-year strategy of the EOC. A plan intended to identify priority actions at both the
EOC and category level, which is rigorous, decisive, simple, clear and integrated holistically.
SVC
Strategic Value Consumer (SVC), or Growth Consumer, is the behaviorally homogenous group of people we believe we can motivate to make the fastest & most efficient progress towards achieving the growth required by
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