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Tools for Tools for Successful Successful InnovationInnovation

Glenn Baptiste

SVP, MarketingMulticultural Brands

A few of our key brands…A few of our key brands…

A large portion of L’Oreal’s annual revenue in A large portion of L’Oreal’s annual revenue in Consumer Products comes from InnovationConsumer Products comes from Innovation

The Seven Chakra of InnovationThe Seven Chakra of Innovation

These principles apply to fresh thinking on any subject…

Above all, innovation must Above all, innovation must add value to the organizationadd value to the organization

• Basic principles of accounting

• Build top line revenue• Increase margins• Better utilize assets• Borrow money at a lower rate• Reduce taxes

These programs are designed to enhance all three areas

This was a typical description of a target:This was a typical description of a target:

Beauty involved, hair involved, 35 to 55 years old, ultra high income, blonde…

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Find a definition of an “insight”Find a definition of an “insight”

“Deep or fundamental truths about the consumer that forces a transformation of thinking and can be leveraged for business building or brand development opportunities.”

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Insightful comment on behavior: These moms don’t have the time to cook from

scratch the way their mothers did, and they feel guilty about this

True Insight: In this hectic and uncertain world,

everyone seeks a sense of comfort, caring, and warmth

Person: Real Uhmericans

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Product Idea: Fresh, real country comfort food ready in 5 minutes

All creative elements based on true insight:

• Product Offering: Various elements of a meal grandma would make – fresh real food, served from a country crock

• R&D Details: Thick, satisfying, natural ingredient deck

• Packaging Creative: Matches base brand, farm imagery, warm muted colors

“If you want to be irreplaceable, you have to be different”

Gabrielle “Coco” Chanel

Why do people love movies?

Natural, trendy, feminine.

A Bad Story

Safe for your health and safe for the environment, hip and chic, organic and green, funky and fresh, happening and just plain fun.

A Better Story

Nature Girl products are made with organic and wildcrafted ingredients, peace, love, nature and harmony, baby.

Nature Girl is a modern-day super hero who takes the lead, confronts adversity and saves us from the perils of toxic chemicals, corporate greed and pollution. This is someone who most women can identify with. Beautiful, but more importantly, smart, determined and a leader.

Modern with a sense of visual irony, what Murakami did for Louis Vuitton – we are eco-chic.

A Great Story

The Brand DiamondThe Brand Diamond

The person and situation for which the Brand is always the best choice.

Define in terms of attitude/values, not just demographics.

The market and alternative choices as seen by the consumer and the relative value the Brand

offers that market

The element of all you know about the target consumer and

their needs upon which the brand was founded.

What the Brand stands for and

believes in as well as what personality traits

it exhibits.

The differentiating functional and

emotional benefits that motivate

purchase.

The single most compelling and

competitive reason for the target

consumer to choose the Brand.

The proof we offer to substantiate our

positioning.

The distillation of the Brand’s genetic code into one clear,

compelling thought.

The Brand DiamondThe Brand Diamond

The distillation of the Brand’s genetic code into one clear,

compelling thought.

The EssenceThe Essence

• Disney – Magic Happens• Ritz-Carlton – Ladies and Gentlemen serving

Ladies and Gentlemen• Axe – Win at the Mating Game• Corona – Tropical Bliss in a Bottle• Country Crock – “Find Your Porch Swing”

Cutting EdgeLow Awareness

RoutineHigh Awareness

Trend Adoption Life Cycle Stages

Leader Early Adopter Early Majority Late Majority Laggard

Stage 1 Stage 2 Stage 3 Stage 4 Stage 5

Trendiness and profit margin…

A Few Tools on the A Few Tools on the Business SideBusiness Side

• The 5 “U”s• The SOPA tool• Capabilities Foundation

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What are the 5 U’s?What are the 5 U’s?

• Attracting new Users– How can we get more people to try us and come into our franchise?

• Driving incremental Usage occasions– How can we get them to use us more often and/or in different ways?

• Impacting Use-up rate– How can we get them to use our products faster or buy them faster?

• Trading users Up– How can we get them to trade up to higher cost/higher margin

items?

• Penetrating Untapped channels– Are there other channels in which we want to sell our products that

we aren’t selling in now?

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Attracting new Attracting new Users:Users:How can we get more people to How can we get more people to

try us and come into our try us and come into our franchise?franchise?

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Finding out why a population group is not using a product can Finding out why a population group is not using a product can lead to products to accommodate them, bringing them into a lead to products to accommodate them, bringing them into a

category and franchise.category and franchise.

Product:Mobile phones were not extensively used by older people.

Marketer Insight:Market research revealed that mobile phones weren’t being used much by seniors, because the buttons were too small for older eyes to see and operate. Companies that have created phones that are easy for seniors to use have seen increased sales.

Attracting new USERS

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Driving incremental Usage occasions:

How can we get them to use us more often and/or in different ways?

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Looking at a product’s core benefit can help identify new products Looking at a product’s core benefit can help identify new products where that benefit can be applied.where that benefit can be applied.

Consumer Problem/Insight: • People are always looking for ways to clean, freshen, and deodorize, particularly

without chemicals, if possible.

Product Description:Arm & Hammer baking soda • Was a simple baking ingredient• Freshening & deodorizing benefits discovered• Many sublines created to utilize core benefit

Incremental USAGE

occasions

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Impacting Impacting Use-upUse-up rate: rate:How can we get them to use our How can we get them to use our

products faster or buy them products faster or buy them faster?faster?

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Demonstrating “typical usage” of a product which uses Demonstrating “typical usage” of a product which uses much more of it than average can increase consumption.much more of it than average can increase consumption.

Consumer Insight:• Consumers emulate what they see on TV and other media.

Marketing Description:• In the 1980’s, Aim toothpaste aired TV spots that ended with an

abundant amount of product being applied to a toothbrush. Consumption of toothpaste increased by 10% in one year.

Impacting USE-UP

rate

Increasing the size of a package can sometimes increase Increasing the size of a package can sometimes increase consumption.consumption.

Consumer Insight:• Marketers realized that the original 12 ounce can was generally used as a

single-serving. If single-serving size was increased, people would automatically buy more pop.

Product Description:• With the resealable bottle, the size was increased to 16 ounces.• The bottle eventually grew to 20 and then 22 ounces.

Impacting USE-UP

rate

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Trading Users Trading Users Up:Up:How can we get them to trade up to How can we get them to trade up to

higher cost/higher margin items?higher cost/higher margin items?

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Thinking about a product’s core benefit and then increasing Thinking about a product’s core benefit and then increasing the effectiveness of that benefitthe effectiveness of that benefit

encourages consumers to trade up.encourages consumers to trade up.

Consumer Insight:Women need moisturizers for their skin. But as they age, they want and can afford more premium products with special anti-aging benefits.

Premium Product Descriptions:Olay has multiple product sub-lines, with increasing price points & added benefits:

– Oil of Olay– Daily Renewal– Regenerist– Definity

Trading users UP

4 oz for $7

2 oz for $101.7 oz for $18

1 oz for $25

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Penetrating Penetrating UntappedUntapped channels: channels:Are there other channels in which we Are there other channels in which we

want to sell our products that want to sell our products that we aren’t selling in now?we aren’t selling in now?

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The incredible growth of non-retail outlets have brands The incredible growth of non-retail outlets have brands examining how they can play a bigger role in this area.examining how they can play a bigger role in this area.

Consumer Insight:Consumers increasingly want:– Shop-at-home convenience, – Product demonstrations– Testimonials from other consumers

Channel Descriptions:Direct-to-consumer channels offer all features above, examples include:

– HSN and QVC cable channels—can order via phone or online. – Amazon.com and other online retailers sell everything imaginable.– Most brick & mortar retailers also have online stores.– Many brands now have their own online stores.

UNTAPPED Channels

Capabilities Capabilities

• A tool to getting more production out of existing assets

• The goal is to understand our current world to that we can determine which ideas are:

• Quick and easy to implement• May take somewhat more resources to employ• Are simply cost prohibitive

Capabilities Capabilities

Innovation Explosion Events

Questions?Questions?