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Insights

Know Your Consumer!

Innovation | 26-07-2013
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By Taddy Hall, Senior Vice President, Nielsen

Sometimes people just don’t know what they want. As Henry Ford once famously observed, if he had asked people what they wanted, they would have said faster horses. More recently, Steve Jobs noted that consumers can’t describe what they’ve never experienced.

But everyone knows it’s no easy feat to innovate in new and unique ways that consumers will embrace into their everyday lives. Consumers don’t live their lives within the crisp confines of existing UPC classifications, and latent demand rarely pops neatly from customer surveys or focus groups. And that’s the challenge for innovators today on their quest for breakthrough innovation success—understand your consumer and more importantly, identify their unmet needs.

The quest for the next Kraft Mio or Unilever Magnum, both heralded by Nielsen as 2013 Breakthrough Innovation winners, begins by identifying unarticulated desires, partially expressed needs, and recurring frustrations in consumers’ lives. Breakthrough winners painstakingly sift through extensive research and complex data to identify the weak signals and map the hazy contours of latent demand. Expertise, curiosity and persistence are required for this work. In studying this year’s winners, as well as those from 2012, we’ve learned that there is no simple demand-driven-insight cookbook. However, we have identified six successful approaches that innovators often employ.

How to Identify Unmet Demand

Synthesize and refine major trends using your current brands. Consider how mega-trends might create new consumer demands, new opportunities and organizational capabilities. For example, by tapping into consumer demand for weight management, health benefits and tasty indulgence, Fiber One created a brownie that was 90 calories, with a large serving of fiber and great flavor.

Alternatively, search for the “pain points” and nuisances that recur in consumers’ lives. For example, as soon as researchers at Monster Beverage Co. observed consumers pouring energy drinks into their workout bottles, they knew there was an opportunity for a non-carbonated energy plus hydration offering. The insight eventually led to Monster Rehab.

Identify non-consumers, or circumstances of non-consumption: Identify groups of potential customers who find consumption impossible, inconvenient, or unsatisfying. This group can pose a great opportunity for category expansion. For example, Downy Unstopables dramatically expanded the laundry detergent additives category by drawing in a neglected pool of consumers seeking long-lasting fragrance. Also, Hershey’s journey to launch Reese’s Minis began with research to identify “barriers to consumption.” Specifically, the innovation team asked one key question: “What did candy eaters consume when they were not choosing Reese’s?”

Identify over-served consumers and develop a suitable offering. Opportunity can often present itself when a current product offering might not fit a specific consumer’s needs. In many cases, for example, this involves tailoring a “professional-grade” product to meet mainstream demand. For example, Colgate’s Optic White product line was a game-changer for consumers seeking effective teeth whitening without the cost or inconvenience of strips or professional services.

Leverage your distinct brand to provide value. Are there emerging growth categories in which certain consumers would be attracted by qualities that are powerfully associated with your brand? For example, it would have been easy for Dannon to cede the Greek yogurt market to Chobani, but Dannon perceived that a great product with its brand could expand the category and fuel growth. So the company moved very quickly with a taste-test-winning product, broad distribution, and a powerful brand, propelling Dannon Oikos past $275 million in first year sales. Dannon also found that Greek was an attribute that could profitably expand its established Activia and Light & Fit brands. Notably, Dannon wasn’t deterred by Chobani’s impressive foothold in the category. If anything, Chobani’s success expanded Dannon’s horizons and energized it.

Challenge assumptions about everything: what consumers value, growth drivers, true competition, category boundaries and current business models. Forget about what an organization thinks it can or can’t do. Recognize that value creation isn’t just about product attributes. Revisit ideas that you’d had in the past but put on hold for one reason or another. Be relentlessly curious and keep asking why? And above all, abandon perhaps the most debilitating assumption of all: a “we can’t innovate” attitude.

Tagged:  INNOVATION
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