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“Recession, what recession?” NPD in a falling market 30 th April, 2009.

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Presentation on theme: "“Recession, what recession?” NPD in a falling market 30 th April, 2009."— Presentation transcript:


2 “Recession, what recession?” NPD in a falling market 30 th April, 2009

3 An introduction to pi global

4  Established in 1984  Independent Global Branding, Visual ID and Design Consultancy  A company specifically designed to deliver truly holistic branding for consumer goods worldwide  Multi-cultural, multi-national teams based in Notting Hill, London  Provide a comprehensive range of disciplines through our four specialist divisions  Co-founders and home of the ‘Museum of Brands, Packaging and Advertising’ in the UK Who we are

5  We are specialists in consumer branding, packaging and holistic communication  We are a total service business with all relevant disciplines, working together, in house  We understand a brand’s visual requirements at every brand consumer interface  We are 100% focussed on the commercial success and long term growth of our clients’ brands  The visual brand foundations we put in place have real longevity  We have long-term client relationships What’s different about us

6 four specialist divisions – one focused company

7 structure consumer innovation branding

8  Specialist FMCG branding creation, optimisation and management  Brand and Branding Strategy  Real world iconistic® brand identity and pack design  Focused on long term brand strength and growth  24 years experience of major international FMCG and healthcare brands  Branding, visual brand identity, pack design, naming, brand deployment, brand protection, brand visioning through ‘aspire’  Visual brand expression for communication  Brand ‘sonicons’  branding

9  Structural packaging  Industrial design  Mechanical engineering  Production risk analysis and cost modelling  Rapid prototyping through ‘pilot’  Factory production audits  ‘Real world’ production consultancy  Testing labs  Full in house structural production facilities including: Extrusion blow moulding, P.E.T. injection stretch blow moulding, Injection moulding, Vacuum forming, Pressure forming, Resin casting, Solid and surface CAD modelling, CNC milling, CNC lathing, Digital substrate printing, Laser carton cutting, Performance testing equipment structure

10  ‘Real world’ consumer understanding and insight  Covert consumer observation, filming and analysis  Covert retail observation, filming and analysis  In home usage observation, filming, discussion and analysis  Vox-pops  Shopping script identification  Pack decoding and shelf performance analysis through ‘pickup’  Brief formulation consumer

11  Insights driven idea generation  New brand / product innovation / development  New Brand ideation, positioning and footprinting  New Brand Development / New Product Development  Collective debate within a virtual community  Expert approach – playing to peoples strengths  Technology based innovation model innovation

12 Some case studies

13 Procter & Gamble – head & shoulders First stage  Brand strategy and visioning for over ten years  Three stage 2D/3D holistic brand redesign  POS/merchandising  Brand guardianship  Geographic scope: Global A ten year vision Second stage

14 Procter & Gamble – head & shoulders Third stage

15 Final design for launch Kellogg’s – Coca-Pops Creations  Innovation and ideation  3D design  Geographic scope: UK

16 Presentation topic: How to innovate in a Recession

17 The facts  Recessions are not all devouring monsters, they are times of great opportunity  Recessions last a lifetime when you are in them, but in realty they are very short events in the life span of a brand  Like wars, recessions are times of accelerated change  Cost reductions and promotions solve the short term problem, but can destroy a brands future  If everyone uses price as a differentiator, price is all you will ever be judged on  If everyone is using the same methods, all brands are equally vulnerable to attack  The retailer knows what sells today-this does not tell them what will sell tomorrow  Recessions are brutal, if your brand is poorly differentiated it will be the first to fall.  Strong brands supported by strong NPD thrive in a recession  A recession is the ideal time to try something new.

18 Brands that launched in a recession


20 9 Targets for success Brands that launched in a recession

21 1 Target brand switchers

22 1 > Target brand switchers  Brand loyalists will stay with you in a recession, but they may buy less than before  The Competition’s Brand loyalists will also remain with their favourite  Own brand consumers will only buy on cost, they are only loyal to the lowest price  There is potential in the ’non committed’ consumers who are loyal to values other than price, but these values have not been met by your current offer.  Category norm breakers will capture these consumers if they have the right proposition

23 2 Target the comfortably well off

24 2 > Target the comfortably well off  They may only be 5% of the population, but they are insulated from recession  Although they will continue to consume much as before-they like to be discrete  They still like a bargain though, ALDI’s growth is strong amongst this segment “Don’t change your lifestyle, change your retailer” is very much on message  Quality is critical for this segment so don’t look for savings from product  They also appreciate the simpler things in life, it does not have to be a super premium offer to work

25 3 Target the “live-for today” consumer

26 3 > Target the “live-for today” consumer  The ’live-for –today’ segment also carries on as usual  They are urban, young and relatively unburdened by mortgages and credit  They are more prone to impulse purchases and are acutely brand conscious  They are geared to spend on experiences rather than possessions, unless you are talking about clothes and gadgets  They are early adopters and experimenters, the quintessential NPD target

27 4 Target small luxuries

28 4 > Target small luxuries  Consumers feeling the pinch scale down treats rather than stop buying them, in fact treating goes up  Small indulgences are excellent brand switching tools, so tactical NPD launches can deliver beyond the first trial  Small luxuries can support better margins even in a recession and are welcomed by retailers  The proposition has to be overtly indulgent, but the price point remains mainstream.

29 5 Target the upswing

30 5 > Target the upswing  Recessions feel eternal when you are in the middle of one, in reality they are rarely long term  Costs in a recession are lower, making development and investment cheaper  The market becomes simpler and more focussed in a recession, new propositions stand out  Recessions build an appetite for novelty and reward and the longer the recession the stronger the appetite  New propositions are untainted by the value for money erosion brought on by promotions and price fighting, they have greater credibility  Growth rates in the recovery phase start small, but can accelerate rapidly offering rapid share growth

31 6 Target the completely new

32 6 > Target the completely new  Unique propositions can’t be judged by market norms and are insulated from value comparisons  Genuinely new solutions always elicit trial, irrespective of the market condition  Sometime’s genuinely new solutions are the only way out of a brand or products decline-e.g Sony’s Walkman  While your competitor is focussing on price fighting in an established market, you can generate share and margin somewhere completely new.

33 7 Target desire

34 7 > Target desire  Cost control is rational, desire is never rational and it always works  Post-purchase disconfirmation studies demonstrate that true desire guarantees repurchase  True desire works every time - e.g. Apple  True desire lies at the heart of all great brands so its worth aiming for anyway  True desire is irrational and proof of principle is delivered by market tests-you need to develop fast cheap ways of testing propositions- you probably need to do that anyway  True desire is insulated from price, will be promoted eagerly by your consumers and will develop a life of its own

35 8 Target smart savings

36 8 > Target smart savings  It you really have to target price-and many feel they do, find a new way to deliver smarter savings. Brand Allied Domecq North America packaging range Example given for Canadian Club only Capital Investment $3.5m Unit cost change -14% NSV effect +30% Data supplied by Allied Domecq Packaging innovation team 2004

37 9 Target a revolution

38 9 > Target a revolution  In a ‘normal’ market incremental NPD fails dismally. The F.M.C.G success rate is 4%  In a recession timidity is a recipe for eroding profitability, eroding brand value, eroding retailer confidence and shredding your career  A recession is always a game changer, old brands with marginal propositions disappear and new propositions emerge  If you are fearless (or desperate ) you can grasp he opportunity that a recession offers and enter the recovery in better shape than you went in.  Even if you feel you are in good shape, you need to keep a careful watch on the marketplace just in case a revolution is happening that you do not control

39 Final thoughts

40 research, observe, empathise, understand, & know your consumer

41 Understand that the improved functionality and added value can be given to your brand through design is proportional to the cost of change and level of investment… brand v cost

42 Create clear marketing and design objectives, and challenge your design agencies to deliver… “Insanity is repeatedly doing the same thing with the expectation of different results” Albert Einstein, Genius

43 © pi global 2009

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