WisconsInnovation

Improving Innovation at Consumer Packaged Goods Companies
Author: Jackie Aperi
[Full PDF]

Summary: Consumer Packaged Goods(CPG) managers frequently struggle to deliver new products that meet consumer needs and create lasting differentiation from competitors. Some of the innovation challenges CPG companies face are risk aversion for mature brands, inarticulate consumers and nearsighted focus on short term profits. These forces can trap CPG's into creating incremental innovations when discontinuous innovation is a more sustainable and profitable long-term strategy. This paper offers three breakthrough tactics to deliver new products that meet consumer needs without increasing R&D budgets.

See the January 2009 edition of the journal Nature for a story on a "distributed, volunteer science" project which has been ongoing since 1900.

The Wisconsin State Journal recently published an article titled, "At the University of Wisconsin-Madison, Cooperation Equals Graduation." Using Professor Deborah Mitchell's Consumer Behavior course and attendant "Project MBA" as an example, the article discussed the widespread use of teams as an educational tool at the University.

As MBA students in the Wisconsin School of Business, we are extremely accustomed to teamwork, being assigned or forming our own teams in nearly every course in the program. What occurred to me in reading this article, however, was the role teams play in the creation of our educational experiences. While we all sit in the same classroom, participate in the same course discussions, and study the same course materials, we each arrive at the end of the semester with different educational experiences by virtue of the teamwork components of our classes. In other words, teams are truly a form of educational co-creation.

According to the article, "some instructors believe the group activities can push all students to achieve at a higher level than they would in traditional college courses emphasizing individual performance." Teamwork as a form of co-creation can lead to enriched educational outcomes, forcing students to learn from each others' real-world experiences and providing a platform for instant feedback - the type of collaboration that will be expected of us in our jobs after graduation.

As we have learned, co-creation can be a powerful tool in new product development. In a very real way, our education is a product that is deeply affected by the co-creation occurring from teamwork. While we do not often think of our teams as a form of innovation, surely my educational experience has been shaped by the people with whom I've worked during the course of my MBA program. Each team has taught me something different, and my education will be the result, at least in part, of the individual experiences I have had with my different team projects.

Extending the theory of teamwork as a form of co-creation in new product development (our education), two points emerge. First, if our "education" product is the result of teamwork co-creation, perhaps there should be an increased focus on selecting different teams for each project. The MBA program dictates our "core" course teams during our first year with a new team each semester. These same teams are required, however, for each course. Perhaps by switching up the composition of the teams more frequently, we could expand our learning and achieve more diverse educational experiences. The same is true in the second year of the program where we are free to select our own teams. Frequently, and I am no exception, we stick with the familiarity of the team mates with whom we are comfortable. Perhaps, however, we might achieve a more diverse experience by associating with different teams for each project.

Second, it seems clear that the more tools and resources we have to work with our teams, the easier it will be to utilize this form of co-creation. Differing schedules and work preferences often make teamwork difficult. The School of Nursing, however, will soon utilize an online platform allowing team members to post work on a course Web site and will provide a portal allowing all students to co-create a final report analyzing a medical problem. These new tools would be a great addition to the School of Business, enhancing the ways in which we use teams and collaborate as students to solve problems and learn new ideas.

There are many things that are part of growing older that I am not looking forward to including the possibility of wearing Depends. However, I am encouraged by KC's recent investment into the product. For the first time in Depend's 25-year history, KC will finally offer a separate product for men and women.

I am surprised that this innovation did not occur years ago, given that men and women are shaped differently and have different leakage needs (yikes!). But, with the aging baby boomer generation, the time to invest couldn't be better. You should feel comfortable recommending these incontinence products to those in need - with this upcoming change, the product will offer 28% better leakage protection.

I am left wondering why KC didn't think of this sooner. 25% improved performance is significant. And now, couples shopping together will have to buy two bags of Depends. This change should improve sales. Way to go KC!

If you haven't already, check out the New York Times 8th Annual Year in Ideas magazine. Though some of the entries describe social experiments or academic research findings, a few detail user-generated innovations, for example inflatable airbags to break falls sustained by the elderly, the leading cause of death for people over the age of 65 or spray-on condoms for the man who just can't find that right fit.

These ideas made me think about an issue not discussed in class - the economic viability of an innovation and how to market it. While most likely not an issue for most of us, individual resources and the market severely limit the number of innovations we see. So while we have a tendency to believe innovations are incremental and do not fulfill consumer needs, the innovations we actually see represent of fraction of what exists. For all we know, there is something out there that satisfies our unmet demand. We just don't know about it.

Many of us may have heard or read the book ‘Seven Habits of Highly Effective People’, but you may not know ‘Seven Habits of Highly Innovative People’. No, it’s not created by me. I hope so though. At the very end of this semester and inspired by the ideas shared in the class and here, I had the question: “Is innovation a talent or a habit?” I don’t think myself as a very creative person. Yet I am interested in getting more innovative thoughts. Being innovative, or creative, is always a desirable trait in personal life or future job, isn’t it? So I found this article on habits of highly innovative people:

It’s quite encouraging for me as I went through the list:

1. Persistence – Obviously this is my strength. I can run 5 miles or have a long whole-day hiking!
2. Remove Self-Limiting Inhibitions - Think out of the box and be open to new ideas and solutions without setting limiting beliefs. I can do this better in the future.
3. Take Risks, Make Mistakes – Yes, I need to take more risks. ‘Rather than treating the mistakes as failures, think of them as experiments.’
4. Escape – ‘Ideas sometimes come to us in the shower or while we’re alone’. I agree with this especially because most of the day my head is full of things to do but I don’t really spend enough time thinking about doing something fun and differently.
5. Writing Things Down – That’s why I have this post finally!
6. Find Patterns & Create Combinations – I think this is what we did in the past several months from the class.’ Ideas come from other ideas.’ I did get some ideas from those interesting innovations presented by our classmates. Thanks a lot to you all.
7. Curiosity – This is a very important attribute of a marketer or marketing researcher, I believe.

‘Innovation is more about psychology than intellect.’ Hope you like this idea too.

Marketing researchers are dedicated to clustering consumers and finding large groups of people with homogeneous demand. Find a need and fill it. If enough people are willing to buy the product, everyone is happy. However, this methodology misses the lead users who, according to von Hippel, are frequently the developers of real breakthrough products.

I recently had to trek over to the dreaded Sprint store because my Motorola Q decided to stop functioning. After I had selected my newest distraction, the Samsung Instinct aka Bush League I-phone, the surprisingly helpful sales associate did a cursory review of my account.

I find it incredible that the innovation of text messaging has completely altered the way that I communicate with the outside world. The only person I still chat with on the phone is my Mom, and that’s because she’s a laggard and hasn’t discovered texting yet.

Last week I read an article on the web about the communication revolution and its effects on personal relationships. The author suggested that the increased use of e-mailing and texting instead of speaking in person or on the phone would have a severely detrimental effect on peoples’ relationships with others.

This does not bode well for my future.

Recently, a classmate turned me on to an addicting website called Sporcle.com. If you choose to check it out, I'll apologize right now for wasting - most likely - countless hours of your time.
In class today, I was giving further thought to the idea of creation without monetary aspects, and I couldn't help but thinking of this site. To me, it's almost like a Wikipedia line extension. Like Wikipedia, all the content is created by users, and while the checks on accuracy might not be quite as strict, I've found it to be a very accurate site. Ultimately, I just thought it was yet another interesting example of people co-creating for their own personal reasons; maybe it's to be recognized as the creator, maybe it's to increase content on the page, maybe it's something else entirely. At the end of the day, whatever the reasons for creating, it's an addicting site.
Countries of the World anyone?

Although it's been around for a few years, the last six months has shown frenetic growth for an emerging social media platform known as Twitter. And it's a platform that has tremendous potential to help marketers better understand and interact with their customers -- leading to improvements in new product development and innovation.

Many may be skeptical of this claim. In fact, you may not have even heard of Twitter before, but if you question whether it is becoming mainstream, consider that the Wall Street Journal has published no less than 30 (as of this posting) different articles mentioning Twitter since September of this year -- including an October piece that headlined, "Twitter Goes Mainstream." A pretty bold statement.


What is Twitter?

Katherine Boehret wrote a "Mossberg Solution" column in the Wall Street Journal explaining the service: "In short, Twitter is a free social-networking tool that keeps people connected with one another and with sources of information. Twitter users submit updates about whatever they're currently doing, and these updates cannot exceed 140 text-based characters."

Some refer to it as 'micro blogging.' Basically, you write updates on what you're doing, thinking about, seeing, etc., in real time, and the sum total of these items is your Twitter stream (your micro blog). People then choose to Follow your stream, and vice versa, much as you would via the RSS stream on a blog. It's very stream of consciousness, which from a marketing research standpoint is very intriguing.


How can it can it help improve customer insights?

Twitter has tremendous potential for garnering customer insights, and in fact many businesses, including Comcast and Ford are already engaging in Twitter-moderated interactions with current and potential customers.

Some normative examples include:

• Ethnographic observation of Lead Users,
• Customer sentiment tracking and
• Live, real-time interactive focus groups.

There also have been some great recent articles and blog postings on this topic -- pointing to using Twitter for engaging with customers.

> Observing behaviors and actions: Chris Wilson, who writes The Marketing Fresh Peel blog, posted a recent presentation in which he focused on how businesses can use Twitter for customer insights. "I stressed the importance of understanding people’s behaviors and actions," he notes on his blog, "because no matter what happens to Twitter years down the road, behaviors will be the same."

> Making dialogue two way; not getting caught up in the medium: On my own Propelling Brands blog I posted a response to a blog post by Tony Hung on the Conversation Agent Blog in which he commented on the role of Twitter in brand management. He points out that the key is to facilitate what is a two-way dialogue with customers, and he argues that brands using Twitter should "really listen to customers, show your commitment to participating in direct dialogue and identify and interact with true thought leaders." My additional thoughts, which I posted in my response, were that, "[t]he issue is that too often the medium becomes the message and as marketers we forget the role each channel plays in the ongoing dialogue between brands and customers. Also, all too often, we treat these mediums as a chance to shout at customers but never to really communicate with them."

The key to using Twitter for garnering customer insights is to keep in mind that it's just another tool in our arsenal. As marketers and marketing researchers we should have an objective in mind, first, and then assess whether Twitter is the right venue for communicating with our channel.

But this is the case for any social media technology. I presented on this topic last week, together with some other colleagues at the Wisconsin School of Business. We looked at the role of social media in new product development innovation, including providing points on how to assess whether any given platform is the right fit for the type of insight you wish to garner. You can check out the presentation on SlideShare here.


How can you begin using Twitter?

Set up an account, follow other's Twitter feeds and give it a try!