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Consumer Understanding for
Innovation
A presentation to Microsoft India
October 2010
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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
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Beyond Debate
Consumer Understanding is critical for
success - in NPD & Innovation
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What do we mean by Innovation?
A new (way) that creates economic
value for the business
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Innovative Products
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What sets them apart?
All are based upon a powerful concept or idea
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The Ideas Continuum
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Example 1: Two Wheelers
New model of
a motor-bike or
scooter
Scooterette
A new kind of
a 2 - wheeler
scooter
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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
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Example 3 : Books
A new genre of
Audio
Book
E-
Book
A new genre of
book in paper back
or hard back
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The kind of consumer understanding we need -
depends upon the kind of product we are aiming to create
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The Task
Design a new kind of word-processing
software
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Consumer profile
Usage behavior
Choice criteria
Preferences
Segmentation
Performance benchmarking
Consumer Understanding:
Due Diligence Information
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Deeper probing into the real
Motivations and cultural software
behind consumer choice
Searching for Latent needs
Consumer Understanding: Insights
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Intimate appreciation of
Consumer life space, product
experience and context
Consumer Understanding: Intimacy
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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
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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?
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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
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From Product Proposition
>> To Consumer Proposition
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From Consumer Understanding for Product
Development – Development Research
To Consumer Validation of product concept and
marketing mix –
Validation Research
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Consumer Understanding for Innovation
Information
Insight
Intimacy
Imagination
Implementation
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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
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The End