Confectionery is a mature market and this makes genuine innovation more difficult. The overall cost of a new innovation could be around £50M to include a new factory and a three-year TV campaign to establish the product compared to around £300K for an adaptive innovation applied to a popular brand. The cost of ingredients such as chocolate and sugar is also rising creating a confluence of soaring cost and cautious consumer spending. This has lead to manufacturers seeking more — value driven innovation for new product development.
When any attempt at genuine innovation carries such high stakes what can manufacturers do to reduce the risk and minimize costs. NPD must begin by finding a more reliable way to identify those ideas that will succeed over those doomed to failure.
Chris Horne is a senior partner at iQube Marketing which is taking a radical approach to the food industry. He believes that reliably identifying the right target depends on much deeper research than is frequently done and requires what few companies dare to do – to put the customer in the driving seat.
This means turning the traditional marketing perspective through 180 degrees to view everything from the customer perspective. This may sound like common practice but few companies genuinely do it.
There are often too many assumptions made in-house which are not founded on customer responses. Everything should be based on functional, economic and emotional values. These are then broken down in a stepped process where the ruling principle is to suspend all judgement.
The multidisciplinary approach includes market research but is much more comprehensive. iQube’s approach is based on a RISC methodology (Research, Innovation, Strategy, Change). Horne admits that the process is more complex than the usual approach taken by food companies but then this is necessary to understanding all the interrelating factors that affect customer behavior especially when new product development is such a high cost and high risk endeavor.
Some food companies may find a values-based approach difficult to embrace because it uses complex facilitation statistics, is resource consuming and challenging because the process may require the company to do something outside the core competence. Horne says “marketers operating in an intuitive decision making environment will find the customer-values approach counter-intuitive”.
Whilst more sophisticated than more typical market research, a value-driven synthesis of customer needs and expectations could become an ivory-tower behavioral science theoretical discussion. If this is a danger Horne insists it must be continually grounded in a hard methodology than can be rigorously tested.
This more demanding customer-value approach to understanding the customer perspective has produced successful results in markets related to the food sector. It is now being introduced to this sector where it should have an immediate impact on the ingredients supply chain.
Horne's colleague and innovation expert Mike Heisig will be holding a webinar on NPD in the Food Industry. He will be discussing the problems faced by the industry and the methodology required to implement a customer value based approach.
Name: Chris Horne
Email: Send Email
Organization: iQube Marketing Limted
Address: Davidson House Forbury Square Reading RG1 3EU
Phone: 0845 868 6477
Release ID: 6452