Interview with Lisa Gudding, Executive Vice President, Consumer & Retail
Rising target groups are the source of future growth. How to reach each audience varies. But the best way to capture their attention is to bring meaningful innovation specifically targeted at their particular wants. We asked our expert Lisa Gudding about promising consumer segments, evolving consumer needs and how GfK helps clients identify the right innovation at the right time for the right target group.
Lisa, first of all, could you please briefly define "innovation" from your market research point of view?
Oh, that’s easily answered: innovation is simply a new idea that is successful in the marketplace. It usually combines something familiar with something new that addresses emerging needs – so clearly looking towards the future. It could be a product, service, way of communicating, new channel, new category – there are many, many different ways to innovate.
Where and how do you locate these emerging needs?
That’s the fun part about being a researcher. At the very beginning we get to investigate emerging audiences, in a second step we identify their unmet needs and finally, we help determine the best way to motivate them. Of course, rising target groups vary by type of business, region and so on. That said, new growing ethnic groups within particular countries and regions are always of interest. And speaking of regions, MIST countries – Mexico, Indonesia, South Korea and Turkey – are certainly gaining additional attention. Take Indonesia, for example: purely on account of its population of 250 million, the world’s largest Muslim country is said to be a promising future market and a hot tip for investors.
But, first of all, people in certain life stages and situations are coming to the front: these include "silver foxes" or older consumers, new mothers, the middle class and affluent in Africa, the massively growing middle class in BRIC countries and singles in China. Not surprisingly, emerging digital users and Digital Natives are continuing to rise. And then there are the attitudinal groups who are becoming more popular to study: for example, “green” consumers, who place particular emphasis on health and sustainability, or the "influential" trend setters, who spread the news in a way that catches the attention of others.
Is there a common rule for how to innovate for that many different rising target groups?
There are five aspects you must consider in general to become successfully innovative:
• timing – it needs to hit the market when the market is ready
• clear articulation of the benefit – functional and/or emotional
• really offering something that is new and meaningful
• delivering on what is promised
• and coming in with the appropriate price and value
Timing is both the key characteristic of good innovations and the biggest barrier to success, being too late or too early. But, to go beyond luck with innovation, you need a systematic process that is (a) forward looking, (b) looks both inside out and outside in and (c) creatively translates insights into successful business innovation. To do that, you have to understand needs very deeply (that’s the inside out part), but you also have to marry that with key macro trends, emerging innovation in other categories and other outside factors that can influence the future. A systematic analysis can help you identify emerging whitespace.
How does GfK help clients identify the right innovation at the right time for promising audiences?
Good innovations revolve around a framework. If you think about it, innovation is the promise of a new benefit bundle that brings value. To get there, we first need to understand what is happing in the market and categorize benefits. We see waves of benefit activity: core benefits, more advancement of core benefits, then disruption within a category (this is where most market share is gained), fusions of core and secondary benefits and finally new categories or segments that are the truly disruptive innovations and game changers (this is where new categories are built).
So in our client’s category, we map where they are and where they are moving. Then we match their business against the four cornerstone drivers of buying decisions: security, wellbeing, gratification and freedom. That helps us understand lags between opportunities and what either well-known or emerging consumer segments actually need. A key output of this is a future market map. This gives the emotional territory, links to benefit dimensions and identifies clusters of new market activity from outside the category that are likely to be relevant in meeting the needs of consumers. It allows us to know what is needed for each need state and by segment, as well as the intensity of need. Linking it back to needs is really what is key…
…and having deep insights of what will be in the future.
Exactly. That’s the reason why we developed our FutureScape solution. It quantifies tomorrow’s priority targets, occasions and related needs so that we can identify, size and prioritize strategic opportunities that are right for the business or brand. We identify who the most important future consumer targets will be for the category and brand. Then we define future benefit spaces (emotional and functional). We estimate the size of potential opportunity spaces and territories, and recommended activation activities. Importantly, note that we look at needs by situation, not on average. This allows us to truly canvas the opportunity.
FutureScape has multiple modules: U&A, segmentation, driver analysis, sizing, trigger ideas, brand imagery, need and market gaps, leading edge consumers, etc. They are incorporated as needed, all building to the strategic plan. In the end, we provide direct guidance to clients regarding what they should do differently and which innovations are going to lead to future success. That’s what it’s all about: future success.
Lisa, thank you for this interview.
Rising target groups, rising needs: innovation examples in the USA
• Waste Management Bagster: can hold 2+ tons of remodeling waste, but much more convenient and economical than a dumpster. Sold in retail stores with a follow up collection service. GfK’s help for Waste Management included the initial positioning and concept, a volumetric concept test, a price sensitivity study and website optimization.
• iComfort mattress: Serta’s competitor Tempur-Pedic held over 90% of the local premium mattress market share. In just two years, GfK helped Serta develop iComfort, which uses cooling gel technology, to offer a meaningful point of difference and create a brand worth more than US$350 million (€262 million).
• Wrigley’s Extra Dessert Delights: the insight here was that chewing gum is often used to help diet. So GfK helped Wrigley create fun dessert flavors to make sugar-free gum a treat, like dessert, but without any calories.