BrainTrust Query: Reinventing Innovation Processes is About Behavior

Through a special arrangement, presented here for discussion is an excerpt from an article from the Joel Rubinson on Marketing Research blog.

When I was chief research officer at the Advertising Research Foundation in 2008, two big elements came out of an initiative called Research Transformation. First, we must reinvent the innovation process so that more effort goes against creating powerful ideas from repeatable processes rather than ideas coming from the spray and pray approach. The second was the importance of listening to social media conversations so we can hear the unexpected, rather than have a dialogue with consumers that is restricted to marketing research questionnaire vocabulary.

With 80 percent of new products failing and with most of the breakthroughs, according to the SymphonyIRI Pacesetters report, actually being line extensions, the CPG approach to innovation is broken and must be reinvented.

There are five principles, I propose, around which we can reinvent the innovation process:

  • It is more important to segment moments than consumers. What is the landscape of consumption situations and what drives choice in each respective moment? To do this, you must have a discovery process. Social media and immersive research are great. With social media, remember that people are talking about their lives in an unscripted way. Social media is not only rich for insight extraction, it is behavior itself.
  • Go beyond discovery to quantification. So many in the innovation business stay with qualitative research to springboard into new ideas. Who knows the size of the prize from qualitative alone? You must have a valid way of quantifying this. Cluster moments into segments then profile consumers, not the other way around. Develop behavior markets rather than product category defined markets. This will also give you much more powerful media placement as moments will reveal themselves in digital life, especially via smartphones.
  • Uncover cues that signal a product would be what someone is looking for in a given situation. More than half of brand purchase decisions are made at point of purchase, according to my research at Synovate in addition to other well known sources. Isn’t that a sign that the behavioral economists and other choice scientists are right about the impact of cues on instantaneous choice behavior? Shouldn’t marketing make it a top priority to crack the code on cues?
  • How do we test new product ideas with the same specificity with which they were created? If we are looking to address the choices people make in a given behavioral situation, why ask purchase intent, which is not choice based? Get specific to the behavior market and study the choices people make in those situations. Understand the drivers of choice.
  • Evolve the measure of uniqueness into a measure of disruption. What a marketer really wants to do is to disrupt the habitual behavior that people have so their new product gets noticed and considered. Seeing it this way, the traditional uniqueness question in concept research is incomplete and inadequate.

 

BrainTrust

Discussion Questions

Discussion Questions: Should a more behavioral approach be used to drive new product idea generation and testing for new product decisions? Is purchase intent still the most efficient method?

Poll

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Dr. Stephen Needel
Dr. Stephen Needel
12 years ago

While purchase intent may be efficient, it’s been shown over and over again in academic literature to be a mediocre predictor. Especially when we have other behavioral methods to understand new product performance, there’s no reason not to use them.

David Biernbaum
David Biernbaum
12 years ago

No, no, no, let’s not pretend that the inventors are not inventing. The real issue is two-fold. First, that inventors and entrepreneurs lack the wherewithal and skill sets on their own to market their new products. Second, that today’s SKU-rationalized retail environment discourages invention. The good news is that I do see a slightly changing trend be it ever so slight. But inventors and new brands absolutely must get some help from experienced knowledgeable people to make it work!

Max Goldberg
Max Goldberg
12 years ago

This article points to many of the reasons why large CPG companies fail to innovate. Line extensions do not represent innovation; they are more of the same. Big companies, by nature, are not risk takers. Management is focused on quarter by quarter revenues rather than innovation. It’s easier for big companies to buy smaller companies that have created a new consumer good and quickly ramp up production, distribution and marketing.

Ian Percy
Ian Percy
12 years ago

Love this topic. First let me quibble with the term “reinvent” especially when applied to the concept of innovation. I propose true innovation wasn’t “invented” and thus cannot be “reinvented.” That may sound like pointless wordplay but it gets to the heart of the issue.

There are two roads to innovation: the ‘mechanistic’ or 17th century Newtonian model where the universe is a collection of parts and we spend all our time fiddling to see if we can make the parts work better. This is where retail and 99% of other businesses spend their time and money. This is why 80% of the fiddling fails and why most ‘breakthroughs’ are line extensions — they can be nothing else.

The other road is the “energetic” or quantum model that sees the universe as one integrated inseparable bundle of energy in various forms. What I’m trying to get businesses to see is that this is the next frontier because if we understand how energy works we literally become “creators,” discovering possibilities previously unseen…the next Big Idea if you will. We know how to do this and thus access more innovation, creativity or invention than you can imagine.

You have more of these “create-ive” ideas in your sleep than you do while working. I’ve offered this quote before: “No one has ever had a good idea in the middle of a meeting!” And there is way too much truth in that. Why? Because meetings are mechanistic experiences. Look at most world-changing discoveries and you’ll find that the “breakthrough” came during sleep or in some idle moment, not while pouring over engineering diagrams and spread sheets.

To be etymologically correct: “innovation” means to change something that already exists — i.e. line extensions. “Invent” means to discover something new. “Create” means to bring forth out of what we think is nothing, but is actually everything. So which do we really want?

Ryan Mathews
Ryan Mathews
12 years ago

Respectfully, I think that’s “an” issue, but not “the” issue. First of all, the entire product development process needs to be blown up and replaced by a real customer-up instead of manufacturer-down approach. This would require a radical repositioning of how we gather, analyze and categorize consumer data.

Next, we need real innovation! The world doesn’t need a Cream of Guava soup, a low calorie Cream of Guava soup, a chunky Cream of Guava soup and a Taste of the Islands Cream of Guava soup. If you want people to buy products, make them real, make them taste good, and make sure they appeal to some consumer-based value.

We need to understand that the reason there isn’t a direct correlation between an increase in new products and “choices” in a supermarket and a decline in total supermarket share of stomach. We keep trying to think about this as a product problem when its really a lifestyle issue. Giving people more cooking options won’t necessarily make them cook more as history demonstrates.

There’s also the issue of qualification, Lots of marketers like to sound like social scientists, but they aren’t! Dressing up and old problem in new language makes it easier to deal with — but only for a while. Break faith with the consumer and you lose sales. Follow them — on their own terms — and, depending on what you are selling, you should be O.K. Try to sell them products they really don’t need, like or want, no matter what behavioral theory you choose to wrap around it won’t work.

Of course, there are a lot of potential consulting dollars here. Maybe I should rethink my position … Yeah … I can see it all now … a line of Jungian Archetype products like Essence of Earth Mother organic foods … a Freudian line which would come in a can that couldn’t be opened … maybe a full line of products based on Maslow’s hierarchy of needs starting with an MRE-like generic and moving upward toward a line of gourmet items ….

Sorry, have to run and build a deck….

Dr. Emmanuel Probst
Dr. Emmanuel Probst
12 years ago

The principles outlined by Rubinson above are all great ideas and his approach is refreshing. The reason why most traditional research fails is because consumers don’t act the same locked in a focus group suite in front of a two-way mirror as they do in-store. There are some great new technologies coming up that will enable quantifying precisely shoppers’ behavior in-store. I’m thinking of heat maps or any technology that piggybacks on the store CCTVs, for example.

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
12 years ago

I can not imagine that Steve Jobs would have agreed with the move to more segmentation, quantification, and testing to generate better innovation! Success of innovation is whether or not the innovation is communicated well to consumers and provide a product or service they really need and want. There is more than one way to get to this result but, certainly, a deep understanding of consumers and how they live their lives is critical.

Phil Masiello
Phil Masiello
12 years ago

Joel is correct that the CPG approach to innovation is no longer relevant and needs a fresh approach. Segmenting purchase behaviors is certainly one that should be implemented and studied. Disrupting the norm is an approach that I am always in favor of. My only caveat is that all customers are not the same and all customers do not act the same in all categories of products. I believe different approaches need to be used depending on the category and the essential needs hierarchy of the customer.

Tony Orlando
Tony Orlando
12 years ago

I’m not sure if I am answering the question correctly, but this is how I see innovation from a “foodie” perspective. I have created many new dishes and desserts, out of a desire to serve people great tasting products with a unique twist to them. My test market is the consumers themselves, as we introduce new foods slowly; first through my employees’ taste buds, and then through the customer, gaining insight as to the valued opinions on taste, texture, quality, and finally would they purchase this product at said price. Sometimes it takes a few months to get it right, but as a small independent, time to get a new food to market will vary from 1 week to 3 months, due to procurement of the unique ingredients, all the way to final thumbs up from my tasters. I follow the needs of my focus group, i.e. diabetics, gluten free, and dessert-aholics. This is where good money could be made, by offering up goods, that only you can provide, as no one else is doing in your marketing area.

Does this make sense? I hope I am not trampling on the science in this well written article, but grass roots innovations are the results of creative thinking outside the box, and a dogged determination to succeed, without compromising your quality based on price alone.

James Tenser
James Tenser
12 years ago

New product innovation is driven by need. Sadly, it’s more often the brand marketers’ need to accomplish something besides re-optimizing existing offerings. The needs of the consumer are considered after the needs of career, and the emphasis on gauging purchase intent favors self-deception. “It tested well in the focus groups” is the all-purpose safety phrase.

That may seem a little cynical, but it largely explains why so many “new” products are merely slight tweaks in packaging, formulation or flavors.

Joel Rubinson’s advice that marketers look first at the variation in “moments” when attempting to understand consumer/shopper segmentation is an excellent way to reform the reasoning process. Better than old-fashioned demographic segmentation, this will help marketers zero in on needs that could lead to breakthrough products and promotions.

Raymond D. Jones
Raymond D. Jones
12 years ago

The traditional innovation process in CPG has either been find an unmet need in a market or find a segment to target with a product.

I think Joel has some good points on the weakness of this approach. Too often it has resulted in a myriad of mundane line extensions or products that target smaller and smaller segments.

New products today are more often about context or life moments, as Joel calls them. This requires a different view of innovation and a different type of research to help develop and evaluate.

We would do well to reexamine the innovation process in the light of emerging life experiences.

Kai Clarke
Kai Clarke
12 years ago

Yes. We don’t really understand the most efficient method which drives success of new products in the retail marketplace. However, our current process is broken and expensive. New products have numerous issues which must be overcome in order for their presence to reflect the true needs of the consumer. Identifying and streamlining these needs is critical to a new products’ success.

Herb Sorensen, Ph.D.
Herb Sorensen, Ph.D.
12 years ago

Behavior is pretty much the only thing that matters, and behavior is largely a matter of habit, not thinking. No wonder Neale Martin says that habit is the 95% of behavior that marketers IGNORE! Of course they ignore it, because they are THINKING about it, and assume customers are thinking, too. They are not. They are acting based on instincts and formed habits. The only way to know this is to observe and measure their behavior. Neither of these scientific skills are much in evidence among people who occupy offices, or even labs.

It’s always been curious to me how market research was down over the phone, (now the internet,) or in a “laboratory” (focus group facility,) when within 10 miles of the ostensible researchers, tens of millions of relevant behaviors were actually occurring, you know, in actual stores! Shocking. Maybe a walk through now and then to form highly subjective impressions, but no systematic observation tied to measurable numbers. Too HARD! H – A – R -D is more properly spelled L – A – Z – Y!

I’m pretty sure that during the many thousands of days over the past 40 years I have been personally conducting in-store research, I could count on one hand the number of times I have encountered someone else doing the same. Of course, there are a lot of stores, and I do know a few people globally who do this type of work. 😉

Joan Treistman
Joan Treistman
12 years ago

Most of the research I conduct is behavioral so I want to agree with Joel 100%. However, in the spirit of full disclosure, I think there is something to be said for creating “context” when behavior is not accessible. Creating a framework that simulates where the decision is made…or triggers that same environment can suffice. Tradeoffs are virtuous when budgets and timing are high priorities. And then we have several research options that can provide dependable outcomes.

Alec Maki
Alec Maki
12 years ago

When it comes to “big bet” initiatives, innovation is broken. At the very front end (pre-idea), companies struggle to identify good market opportunities and have no robust decision metrics to choose one opportunity over another. Decisions are made in the fog.

No wonder companies gravitate towards incremental initiatives! This leads us to “me too” mediocrity, product proliferation and commoditization of choice.

Even if a “big bet” initiative gets funding, traditional tools — like purchase intent and historical norms — fail to explain how well a bold new idea delivers against the original opportunity or market insight. Why? Because consumers cannot envision or articulate how well a novel, imaginative product fits into life moments. Hence, traditional tools tend to “kill” bold new growth ideas while serving as a chauffeur for more incremental ideas. To avoid this result, we should be seeking to understand how well novel products deliver against existing behavior within the context of the moment.

As Joel mentions, a behavior-driven approach evaporates the fog and brings clarity to innovation. You can start with a focused front-end and proceed with clear direction at each step of the innovation process.

That said, we know certain things won’t change: Companies still need to make decisions as to what initiatives to keep within their innovation portfolios and which to prune. They still need to make go/no-go decisions at various checkpoints throughout the innovation process. These things won’t change.

However, certain things should and can change: For “big bet” innovation, companies need better decision-making tools to select innovation initiatives (based on opportunities based on consumer behavior) and to make go/no-go decisions across each initiative (based on how well new products deliver against previously identified behaviors). These things should change.

Ronnie Perchik
Ronnie Perchik
12 years ago

Social Media allows for a new way to collect market research; namely, a more organic way. I think the above piece speaks well to the need for a more behavioral approach to general marketing strategy. Particularly, the intent to purchase at point of purchase principle is something we, as marketers, overlook at times and it’s right on. Think about how social media could play into this to present a unique solution.

Many brands/retailers are hiring on-the-floor social media managers to, in a sense, live and breathe the brand and interact directly with the consumer. What if, at a competing brand’s display at a local retailer, your social media manager shows up with an iPad, telling consumers about special offers and then tweets something personal about the shopper if they purchase your product. Sure, it could be considered a little too hard of a push. But you get the idea.

Marketers should think outside of the box in terms of how they can use social media to their benefit, and most importantly, to enrich the consumer experience.

Tim Callan
Tim Callan
12 years ago

“Go beyond discover to quantification.” To state it simply, quantification is the new great opportunity for retailing.

As a disclaimer, my firm is in the business of providing tools for measuring and extracting insights from retail environments, so I’m a little biased. But we’ve seen the results. Those who empirically measure shopper behaviors and then act on the results are universally able to identify and exploit opportunities to create a better, more loyalty-building, and ultimately more lucrative retailing environment.

Current technology makes it possible to measure almost every factor of the store including layout, fixture choice, merchandising, staffing, promotions, and even the weather. Those who earnestly endeavor to measure store performance in this way routinely manage to increase sales by double digit percentage points. That’s the power of quantification.

A good topical comparison is the transformation that major league baseball went through in the last decade, as depicted in Oscar-nominated Moneyball. The film tells the story of how sabermetrics became the best practice thanks to the efforts of Oakland A’s manager Billy Beane. A major theme of the film (and the book by the same name) is the replacement of opinion and guesswork and folklore with measurable, concrete, fact-based management. The film shows a number of interactions between Beane and his scouting staff. The staff wants to choose players based on vague concepts like “grace” that are unmeasurable and ultimately have no proven connection to winning games. Beane instead wants to focus on concepts like on-base percentage which are shown to directly correlate with wins. Ultimately the performance of the 2002 A’s demonstrated the power of measuring the factors that contribute to success and optimizing them.