Consumer Understanding for Innovation Compatibility Mode

Consumer Understanding for

Innovation

A presentation to Microsoft India

October 2010

The Debate

Consumer & Market Research

• Helpful

Consumer & Market Research

• Misleading

• Required

• A must

• To know what consumers

want

• Risk reduction

Follow the Consumer

• Time wasting

• Consumers don’t know what

they want

• Willing to take risks

Lead the Consumer

Beyond Debate

Consumer Understanding is critical for

success - in NPD & Innovation

What do we mean by Innovation?

A new (way) that creates economic

value for the business

Innovative Products

What sets them apart?

All are based upon a powerful concept or idea

The Ideas Continuum

Example 1: Two Wheelers

New model of

a motor-bike or

scooter

Scooterette

A new kind of

a 2 - wheeler

scooter

Example 2: Dish wash products

A new variant of

Dish wash paste

Dish wash liquid

Vacuum-based

Suction device

for dish cleaning

A new variant of

a dish wash bar

Example 3 : Books

A new genre of

Audio

Book

E-

Book

A new genre of

book in paper back

or hard back

The kind of consumer understanding we need -

depends upon the kind of product we are aiming to create

The Task

Design a new kind of word-processing

software

Consumer profile

Usage behavior

Choice criteria

Preferences

Segmentation

Performance benchmarking

Consumer Understanding:

Due Diligence Information

Deeper probing into the real

Motivations and cultural software

behind consumer choice

Searching for Latent needs

Consumer Understanding: Insights

Intimate appreciation of

Consumer life space, product

experience and context

Consumer Understanding: Intimacy

Levels of Consumer Understanding

Due diligence Information

Stated need gaps from the product

category/brand

Consumer Insight

Deeper probe into the real motivations

and cultural software driving choice

Consumer Intimacy

Intimate appreciation of the

consumer’s life space and product

experience context – to identify

next gen problems and solutions

and dream up new concepts

The consumer faces a problem.

The product development team has identified it.

The Product Development Puzzle

They design and make a technically superior product to current options.

Would the consumer immediately want to buy it to replace their

current option?

The Irrationality of Human Choices

“Perceived to be superior” – the effect of framing / positioning

“Habit / inertia” – the effect of the comfort zone

“Price-value equation” – the effect of money and budget

Management pressures

“Peer group and social conformity” – demonstration effect

Pleasure, delight, relationships – the effect of non performance

factors

From Product Proposition

>> To Consumer Proposition

From Consumer Understanding for Product

Development – Development Research

To Consumer Validation of product concept and

marketing mix –

Validation Research

Consumer Understanding for Innovation

Information

Insight

Intimacy

Imagination

Implementation

The Debate

Consumer & Market Research

• Helpful

Consumer & Market Research

• Misleading

• Required

• A must

• To know what consumers

want

• Risk reduction

• Time wasting

• Consumers don’t know what

they want

• Willing to take risks

Lead the ConsumerFollow the Consumer

The End