Fei Talk V5
Transcript of Fei Talk V5
T. SchultzT. Schultz
Polishing Nuggets into Gemstones, or Focused Innovation Application Methodologies for
Consumer Goods Successes
Thomas Schultz, Ph.D.
Vice President, Product Strategy
HCI Direct, Inc.
215-494-2900 ext 202
3 Case Studies of Successful Competition in the FMCG world
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Innovation & Product Development
Consumer Needs
Technology
Benefit
Innovation
Polish the nugget into a gemstone
Brand
Technology TRUST Relevance
ConsumerNeeds
ProductAttributes
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Successful Products Are Difficult To Make
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What makes a successful product? It’s innovative.
(1) It sells. (2) It has siblings. (3) People like the family.
Case Study 1: reflect.com, Mass Customization
Case Study 2: DuPont, Repurposing commodities into higher value streams.
Case Study 3: Playtex, Inc., Predicting SLOBS and Facing the Brutal Truths
Innovation = Consumer need + technology
Consumer Hedonics Toolset
Open Sourcing & Partnering
Early Stage Gate Disciplines
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Stage Gate Disciplines
I. EXPLORATORY PHASE II. FEASIBILITY PHASE III. DEVELOPMENT PHASE IV. PRE- LAUNCH VERIFICATION
Determine if a business opportunity exists
Evaluate if we have a viable projectDesign the product and process to meet the consumer and business
objectives
Verify the product and process meets the consumer and business objectives
Package Design, Product & PackageInternational Market Want? Product Development Testing Completed &
Initial Marketing & Testing Specs Approved & issuedEvaluation of Concept & Commercialization & Consumer
Market Potential Value Assessment Specs & Art Developed Market Research Finalized(Verify Consumer Value)
Market Research Supply, Quality & "Wet Tests" Supply Chain Plans
Technologies linked to R&D Assessments Qualified & ValidatedConsumer Needs Supply Chain
SWAG Cost, Capital & Timing Plans Developed Finalized Marketing &Mfg. Plans / Options & Business Plans
Viability (R&D / Ops / Qual) Implications Timelines Agreed ToArtwork Completion
Basic Timeline Mapped Out Updated Cost &Capital Needs Launch Timing Finalized
Costs Analysis Prepared
Basic Timeline Alignment
Win the customer
here!
The Process and the Metrics
► Know the customer: Why do they buy what they do? Why buy mine?
Use of Consumer Hedonics= consumer buys my product.
Unless it is a radically new & unknown product idea, your iteration must outperform.
+
-Product Physical & Emotional Attributes
= Target
= To Win!
►What are the winning metrics: Cost of technology entry. Product Power. Product sibling lifetimes.
$
time
Cost of Entry
Product Power =New Sales $
# New Products
Product Siblings = Products in Portfolio with high Consumer Hedonic values
2% NOS
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Case Study 1: reflect.com, Mass Customization
Consumer Need: People want to personalize their Personal Care Products.
Solution: Let the consumer define their emotional and physical wants and provide a product that “hits” on these Hedonic attributes.
Innovation?: 1. Use web-based interface to allow the selection inputs
2. Develop a supply chain that will make customized products with 2500 variations.
Done: Decision trees, Deep psychographic models on buying needs (~10 US Patents): Company total: 25 employees; partners: 75.
Done: Small batch, short-term fill cycles, proprietary product formulation & processing technologies (~ 15 US patents); partnership with external sub-contractor
Metrics: $ Sales were miserable; notoriety in the web-world and the innovation sectors were great!
Solution: Went back to the consumer and asked, Why no purchase?
Answer: Emotional triggers were high, but could not sample
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Case Study 1: reflect.com, Mass Customization
What did we learn?
• High emotional products need to be sampled
Put a store in place on Union Square (SF) Sales $$$$$
• Making the decisions takes too much physical time as opposed to mental time.
Reduced the # questions, placed Model against another product line where the consumer base would benefit
Cost of entry > > 2% NOS
Product Power < 0.1
Product Siblings were infinite, and hence did not look like a family
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Case Study 2: DuPont- Repurposing technologies to higher value streams
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Consumer Need: DuPont wanted to move into Personal Care Products.
Solution: Match technologies to address consumer needs
Innovation?: 1. Use Consumer Hedonic toolset to identify needs (i.e. performance attributes
2. Implement FMCG product development methods
Done: Need for a skin car solution: materials identified
Done: Use of subcontractor model, brought team far upstream to consumer insights unmet product needs performance attribute maps useage.
Metrics: $ Sales beat expectations; >$20 MM ongoing. 15 Materials identifed.
Sales to manpower ratio for DuPont was below operational standard.
Answer: Sold business rights to Company X @ 15X; retained supply.
Cost of entry <0.3% NOS Product Power ~ 1
T. SchultzT. Schultz
Case Study 3: EPC Multi Brand Global Company
Consumer Need: Bring New Product contribution to sales from 10% 35+%
Solution: Make products more desireable; eliminate SLOBS
Innovation?: 1. Build Product Cupboard of new problem solving technologies with 24 month planned recycling.
2. Teach R&D organization Stage Gate process and Consumer Insights
Created 48 month product portfolio aligned with Global Market Plan
Moved Consumer Insights under R&D; all Cupboard items required top box metric of 65%.
Metrics: New product contribution moved from 11% 38% in 3 years; #1 in market share in Sun care; #2 in Fem Care; #1 in Infant. Care
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Mo & Yr. 2003 2004 2005 2005 2006 2006 2007 2007 2008 2008of Launch Actuals Actuals Plan Actuals Plan Actuals plan Actuals Plan Actuals
New Products
Flushables Tub Feb-2002 2,881 Flushables Refill Feb-2002 1,329 Baby Canister May-2004 769 511 797 36 2 oz. Hand Sanitizer Dec-2005 291 729 270 429 131 8 oz. Hand Sanitizer Dec-2005 49 1,476 418 904 189 16 oz. Hand Sanitizer Dec-2005 12 378 177 220 11 2pk. Hand Sanitizer, 10oz. Dec-2005 518 144 208 92 Big Ones 35 ct. Dec-2005 29 2,000 1,155 2,320 1,208 1,500 1,424 35 ct. Outdoor Unscented WipeDec-2005 91 1,000 327 949 229 890 760 Fresh n Flush Singles Jan-2006 512 124 125 988 1,210 1,388 Singles Dispenser Jul-2006 1,500 1 302 2 Hunting and Fishing Wipe Jan-2007 227 - 250 188 Sensitive Skin Travel Pack Apr-2007 2,421 1,843 2,260 2,130 Sensitive Skin Canister Apr-2007 6,356 3,673 8,900 9,325 Sensitive Skin Singles Apr-07 589 465 750 680 Total Sales of New Products 4,210 1,037 511 1,268 8,113 2,653 5,684 8,831 15,760 15,895
Total Sales - 47,005 55,918 65,917 62,566 74,018 67,968 75,008 52,922 78,200 73,210% of New Products to Total Sales 9% 2% 1% 2% 11% 4% 8% 17% 20% 22%
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# of
SKUs $000's# of
SKUs $000's# of
SKUs $000's# of
SKUs $000's# of
SKUs $000's
Feminine Needs 2 33,328 4 43,878 4 48,780 2 30,560 2 54320
Infant Care 18 36,902 34 47,226 28 78,379 19 49,675 13 68250
Sun Care 9 23,071 10 63,141 6 113,749 11 118230 13 121500
Wet Towelettes 5 1,268 5 2,653 6 5,684 2 8,831 3 11050
Total Sales of New Products 34 94,569 53 156,898 44 246,592 34 207296 31 255120
Product Power 0.27 0.29 0.56 0.61 0.83
% New Product Contribution to Sales 14% 23% 33% 36% 38%
2005 2006 2007 2007 2008Actuals Actual Plan Actual Plan
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Consumer Needs
Technology
Benefit
New Product Contribution
Polishing the nugget into gemstones
►The winning metrics:
•Cost of technology entry: Drive below Std. % NOS
• Product Power: As close to 1 as possible
• Product sibling lifetimes- Depending on category keep ahead of neighbors.
Special thanks to:
Jean Vernor
Don Donovan
Gary Cohen
Dave DiGiulio
And many, many others