2

Change Knowledge:Are you ready for tomorrow’s consumer?

CEU Budapest26th of March 2010

3

“Innovation at Apple is largely about shaping technology to the customer’s needs, not trying to force the user to adapt to the technology. It’s about being customer-centric.”

Steve Jobs, CEO Apple

Are you working with consumer knowledge?

CompetenceImportance? (1-10)

Ability today?(1-10)

Appliance of consumer knowledge to business operations

Consumer IntelligenceWe are working systematically to look ahead, identify movements, future needs and thinking in within our consumers in order to proactively ensure competitive advantage

1

Product portfolio and market profileThe ongoing development of our products, services and business is based on data-based insights about our consumers' needs and requirements

2

Delivery and implementationWe are able to effectively translate the available knowledge and consumer insights into concrete action plans and spread out the knowledge across the organization

3

Corporate cultureOur corporate culture and employees are customer oriented to meet future changes in market requirements and consumer demand with innovative and effective solutions

4

Lighthouse CEE

1. WHO WE AREA brief introduction of Lighthouse

6

7

1. Who are we: Lighthouse CEEJoanna BakasManaging Partner

Education:Masters Behavioral EconomicNorthwestern University Evanston IL

Bachelor of ArtsLoyola University Chicago IL

Work experience:Communications agencies –Saatchi & Saatchi, McCann Erickson, DDB Europe, Lowe AmsterdamSpecializing in brand & business strategy including portfolio management, NPD, communication strategy

Field of expertise:Observing, synthesizing and planning for ongoing brand and business success

8

1. Who are we: Lighthouse CEEStefan ErschwendnerManaging Partner

Education:Master in Business AdministrationJohannes Kepler University Linz, Austria

Master in Social ScienceVäxjö University, Sweden

Work experience:Advico Young & Rubicam Zurich, DCNTRL Linz, DDB/Tribal DDB Budapest

Field of expertise:Business sociology, Digital thinking, Strategic Management,Organizational design

9

1. Who are we: Lighthouse Copenhagen LighthouseOffers companies and organizations Change knowledge based on applied business sociology. Based on years of experience with applied consumer and future knowledge Lighthouse identifies new market opportunities for growth.

Background Founder of Lighthouse, Sociologist Eva Steensig, is a highly experienced Applied Futurist, consumer expert and market potential identifier.

Companies with aggressive growth strategies...

...often find it difficult to detect the true business opportunities based and potential needs in the market.

Lighthouse excels in shedding new light on market opportunities based on a deeply rooted understanding of present and future market needs. We call it Change knowledge.

10

1. Who are we

we believe that business opportunities come from an insight into the bigger picture and

understanding consumers as people from a cultural and sociological perspective

In short we are a a brand and business consultancy with offices in Copenhagen focusing on the Nordics and in Vienna where we focus on Central Eastern Europe.

Our guiding principle is that as a brand and business consultancy, we believe that good strategies come from an overall understanding on society and people.

We measure changing consumer behavior and evolving needs. This helps us better understand the business opportunities – WHITE SPACES.

Based on identifying unmet needs and business opportunities, together with our clients we create and implement powerful business ideas that create value.

11

““For more than a century, the public face of companies has been their advertising, slogans, brands, and logos. How much better it would be if a company’s public face were that of its public, its satisfied customers who are willing to share their satisfaction and its employees who have direct relationships with customers. Brands are people.”

“The question is not how you can change the behavior of your customers? They question you should ask is how you can help them to do this better, quicker or more convenient.”

12

SO, WHO’S THE WOMAN BEHIND…

13

A case for understanding social aspects of people as people and not just consumers

THE LAUNDRY LADY

14

THE COOK

15

THE FASHIONISTA

16

WHY IT PAYS TO LOOK DEEPER AND PEEK AROUND CORNERS…THERE ARE NO MASSES

17

“Masses are other people.” Sociologist Raymond Williams said in his 1938 book. Culture and Society. “There are in fact no masses, there are only ways of seeing people as masses.”

18

When will this approach work?

19

And when will this?

RUSSIA: THE EMERGING FEMALE

20

21

The cult of beauty and social currency The cult of beauty and social currency

22

Trading in to newer modelsTrading in to newer models

23

Trophy culture and age rageTrophy culture and age rage

24

Where are the men?Where are the men?

25

Where are the men?Where are the men?

26

Children for SaleWould $36,000 convince you to have another kid?By Daniel Gross

Communism is officially dead in the Soviet Union, but the Marxist belief that men and women are essentially economic creatures is alive and well at the Kremlin. In May, Vladimir Putin, alarmed at Russia's declining population, which is falling thanks to short life expectancy and a plummeting birthrate (1.17 children per woman, down from about 2 in 1990), offered a bonus of 250,000 rubles (about $9,200) to women who would have a second child.

Communism is officially dead in the Soviet Union, but the Marxist belief that men and women are essentially economic creatures is alive and well at the Kremlin. In May, Vladimir Putin, alarmed at Russia's declining population, which is falling thanks to short life expectancy and a plummeting birthrate (1.17 children per woman, down from about 2 in 1990), offered a bonus of 250,000 rubles (about $9,200) to women who would have a second child.

27

In my opinion the reasons are: lack of attention to the "weak gender"; neglect to the spiritual and personal world of his

wife; alcohol abuse

In my opinion the reasons are: lack of attention to the "weak gender"; neglect to the spiritual and personal world of his

wife; alcohol abuse

28

Moscow cop jailed over supermarket rampageFrom Maxim Tkachenko, CNNMoscow cop jailed over supermarket rampageFrom Maxim Tkachenko, CNN

29

Ladies man Putin: ‘I like all Russian women’

The shoulders to count onThe shoulders to count on

30

Working mothers still enjoy strong protection under the law, which guarantees partially paid 18-month childbirth-related leave (extendable up to 3 years of unpaid leave). Sadly, not all employers follow the law. Russian women often face discrimination and negative stereotypes at the workplace, comparable to that experienced by women over the course of many decades in the United States. The social institutions established by Soviet system that protected working mothers are now in decay, and there are very few new institutions to replace them.

Working lifeWorking life

31

BEAUTY as POWER

GIVE ME SHOULDERS

MEN MIA

THERISEOF THE‘LONELY’SOLDIER

Key concepts that will make her listen

YES

NO

DENMARK: THE EMERGING FEMALE

36

OPTIMIZING

37

Toptuning Social hygiene Anchorage in our own gender

Technology

Health

Communities

PengeFinancial Independence

More women earn much money. It is expected that in 2025, Danish women will own 60% of the nation's private wealth. Women interested in increasing investment.

MotherhoodMotherhood

Focus on optimizing children's development is becoming more sophisticated: Psychologists, child yoga, child fitness and dieticians for children over the decidedly self-development and stress management aimed at children

Genders: same same but different

http://www.youtube.com/watch?v=yIutgtzwhAc

Little Princesses

Femininity

No man needed

Choice of Life

Puncture the bubble of the Superwoman

49

90THEEMPOWERED WOMANIN HARMONYWITHHERSELF ANDSOCIETY

Key concepts that will make her listen

http://www.youtube.com/watch?v=Yb6xRz0ZhnE

Getting the social context right decade after decade: how Coca Cola remained relevant to the times by understanding social evolution

coke…WWII…American patriotism

1942 1944

Cultural insight: Champion American valuesCoke attitude: Patriotism and support of the American ‘good’ valuesOutcome: During WWII, Coke started shipping product to the troops in the front lines and celebrated the war effort with print ads. The media reported that soldiers were writing home and asking for bottles of Coca Cola. This idea was picked up by the author of the book ‘God Is My Co-Pilot’ who wrote: ‘In shooting down my first enemy aircraft, I was motivated by thoughts of America, democracy and Coca Cola’. Drinking Coke became a matter of national pride.

coke…post war…good life of suburbia

Cultural insight: Post war America..the American dream of a good life and post war ‘happiness’ catch upCoke attitude: Classic American suburban values – house, car, family, communityOutcome: Coke became the real thing and probably one of the first lifestyle brands

coke…1960’s…cute and sweet

Cultural insight: A more contemporary American ‘good life’Coke attitude: cute, funny, trendyOutcome: Not the most inspirational Coke attitude to date

coke…1970’s…hippie culture

The Hilltop ad songI’d like to buy the world a home and furnish it with love…

I’d like to teach the world to sing in perfect harmony…

I’d like to buy the world a coke and keep it company

Cultural insight: The war in Vietnam and the racial inequality at home were creating cultural undercurrents that led to the deconstruction of the American myth. Coke attitude: Coke tapped into these cultural undercurrents brilliantly with the Hilltop campaign. The ad featured fresh-faced youth of different nationalities, holding Coke bottles as if they were flags, singing a song. The song that went ‘I’d like to buy the world a home and furnish it with love…’ turned into an anthem ending with ‘…I’d like to buy the world a Coke and keep it company’’Outcome: Backer, the author of the book The Care and Feeding of Ideas described the effect of the campaign in the following way: In that moment I began to see a bottle of Coca-Cola as more than a drink. I began to see the familiar words, "Let's have a Coke," as . . . actually a subtle way of saying, "Let's keep each other company for a little while."

http://www.youtube.com/watch?v=Q8H5263jCGg

coke…1980’s…wall street junkies

Cultural insight: the Yuppie, money, wall street, the ME generationCoke attitude: At a time of wall street and ‘greed is good’ Coke tried a reunion ‘Hilltop’ Outcome: It missed the cultural mark and was immediately pulled off the air

coke…1980’s…performance

case: coke…1990’s…MTV generation

                              

        

coke…NOW

Cultural insight: At a time of insecurity, a changing world, a revaluation of ‘authentic real values’…life complexity…Coke attitude: SIMPLY ENJOY…positive, tapping into the need to see the lighter side and to get back to authentic positive feeling…get a little magicOutcome: So far…so good

The advertising dream car

And the American Dream

VW understood how America was evolving and got the timing right

Big & beautiful luxury

A new America was emerging

The age of the anti-hero…

The VW myth

The VW legend

http://www.youtube.com/watch?v=SpWgs98iBGk

SERENDIPITYCHANCE, FATE, DESTINY, KARMA

70

SYSTEMATICALLYMETHODICALLY, THOROUGHLY, ANALYTICALLY

71

HOW WOULD YOU RATHER ANTICIPATE WHAT WILL STICKBY LUCK – ON PURPOSE

72

2. WHAT WE DOOur way of thinking and model

73

Lighthouse CEE is a specialised consulting company researching future consumer behaviour and future demands

Our clients get insight into consumer behaviour in the near future which enables them to meet new needs better and thereby strengthen their competitive situation today and tomorrow

We work from a sociological perspective with a systematic distinct and unique method which supplies clients with precise, relevant and operational knowledge about consumer behaviour and needs specific to each company.

We identify patterns of changes and what opportunities and risks these hold and we help companies navigate successfully in these changes by developing and implementing ideas that are based on consumer needs

2. What we do

75

2. What we do

You can’t see around corners but you hear around them.

76

CONTEXT measurement(strategy and opportunity spaces)

Ideas that people are ready to embrace

idea CREATION(content)

Powerful concepts inspired

by context opportunities

consumer CONNECTION(implementation follow through)

Getting it out there to market

2. What we do: Our model – Culture Tap

77

2. What we do: context

If you want to see how a lion hunts, go to the jungle, not the zoo

"You don't get anything from sitting behind a two-way mirror listening to focus groups. You learn from living and breathing your brand“

Simon Pestridge, CMO, Nike UK

“If I asked someone who had only used a personal calculator what a Macintosh should be like, they couldn’t have told me. There was no way to do consumer research on it.”

Steve Jobs, CEO Apple

78

2. What we do: contextWe actively seek signs of changing behavior in the areas of:

• Role of the genders• Health• Childcare and upbringing• Work and career• The role of the home• Social issues• Food and well being • Consumption in general • What’s news in the media • Heroes and villains• Entertainment • Technology• Political reaction and actions

The principal behind LHCEE's method for pattern based forecasting: see and understand patterns

Pattern based forecastingStrategic implications and connections

Identification of patterns

SignsStrong and weak signalsBehavioural change

2. What we do: context

Precise method to understand patterns of changes in behaviour

The world

Collections

Patterns

Themes

Stories

2. What we do: context

Sign collectionIllustrative example

2. What we do: context

Strategic development

Today Tomorrow

Consumer behaviourConsumer behaviour

Company X's Products & Go to market

Company X's Products & Go to market

Firma X delivery

porcesses

Firma X delivery

porcesses

Consumer patterns

Consumer patterns

Products and Go to Market adjusted to new market

demands

Products and Go to Market adjusted to new market

demands

Delivery processes adjusted to

new demands

Delivery processes adjusted to

new demands

Demand

Strategic gap

Delivery

Offering

adjusting companies’ products, services, go to market and delivery to demands of tomorrow

Change knowledge

Movements

Consumer demands and needs

Purchase criterias and behaviour

Usage behaviour

2. What we do: content

83

Russia

2. What we do: content

84

2. What we do: content

85

2. What we do: content

86

Global

2. What we do: content

87

2. What we do: content

We cannot build an iPod but we can identify the emerging consumer need to have one.

88

2. What we do: implementation

Implementation across all levels of customer experience

We don’t execute campaigns or R&D but we do act as coordinators of our client's strategic partners during the IMPLEMENTATION process. To ensure that the newly developed ideas are executed in an integrated way regardless of media or disciplines.

“Your brand is formed primarily, not by what your company says about itself, but what the company does. Experience, as we will see, not only matters—it drives results to the bottom line.“

Jeff Bezos, CEO Amazon

89

2. What we do: implementation

Implementation with the best network of co-creators

We can also draw upon our network of co-creators to help with the implementation of newly generated ideas.

We can bring in specialists on an ad hoc basis for the duration of a project.

LIGHTHOUSE CEE services

STRATEGIC/CREATIVE DEVELOPMENTSpecific strategic/creative projects for companies and organisations/follow through

MONITORINGBusiness and company specific monitoring of consumer changes

CONSUMER INTELLIGENCESpeaks, newsletters, events on ad hoc basis

3. IN SUMMARYWhy LHCEE

91

Change Knowlegde Approach©

© Change Knowlegde Process is Copyright of Lighhouse Cph A/S

Competitive advantage and survival is dependent on ability to see and act upon patterns of change

The number and rate of change increases everywhere in society

Today it is necessary to detect patterns and weak signals and act on them – proactive competition rather than reacting to competition

Change takes place in patterns

Therefore it becomes crucial to find patterns of change and identify the opportunities and risks they contain for brands and business

Earlier forecasting research methods have focused on predicting changes based on historical data – ours is based on emerging behavior

Why use the change knowlegde approach?

Fact based insights into future movements of consumer behaviour will secure pro-activity in the company’s business development

The additional knowledge gives competitive advantages by allowing the company to better meet the demands of consumers and systematically map new business opportunities

Increased insight into consumer behaviour is a pre-requisite and foundation for empathy and thereby a more customer oriented company culture

Why chose LIGHTHOUSE CEE as partner?

Systematic/Sciencific

method

Intuitive/ad hoc

Reactive/backwardlooking

Proactive/forwardlooking

How do we differentiate from other suppliers of knowledge about consumer behaviour?

Adver-tising

Antropo-logists

Hören

Sagen

Futuro-logists

Consul-tancy

Research Institutes

95

“The need for products already exists way before people realize it, it’s just a matter of discovery”

96

Companies that will learn to innovate based on emerging consumer needs instead of trying to change consumer behavior will increase effectiveness and efficiency and lower their cost – this is a competitive advantage.

Lighthouse CPH & CEE

4. CONTACTSfor more information

97

98

4. Contact:

Lighthouse CEEhttp://www.lighthouse-cee.com

Joanna Bakasjoanna@lighthouse-cee.com+36 709 538 030

Stefan Erschwendnerstefan@lighthouse-cee.com + 43 650 372 6486

Lighthouse CPHhttp://www.lighthouse-cph.com

Eva Steensigeva@lighthouse-cph.com +45 70 22 26 36

99

Thank you