most innovative brands in singapore

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Most Innovative Brands in SingaporeINCITE, in partnership with AIP

Research on Warc

June 2014


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Most Innovative Brands 2014

Incite, in partnership with AIP

Introduction

What is innovation? What role does it play in driving purchases? Which brands do consumers perceive to be most innovative?

In this report, we are going to explore these questions and more.

Intuitively, we all know that innovation plays a huge role in driving purchases, but, oftentimes, intuitions can be wrong. Never

one to be befuddled, Incite, the award-winning UK strategic research agency, undertook a study in 2011 and 2013 to delve

into this topic.

Back then, the study was focused entirely on UK consumers, which was understandable, given that the company had not yet

expanded beyond the shores of UK. This, however, changed with the opening of the Singapore and New York office last year.

To get a good grasp of Singaporeans, Incite Singapore office conducted an in-depth study involving more than 2000

consumers. The study was conducted in partnership with AIP, a leading online panel provider with a network spanning 12

countries. This report is the culmination of months of dedicated research and is intended to arm marketers with insights that

will give their brands the winning edge over competitors.

Importance of innovation

"Innovation is the specific instrument of entrepreneurship. The act that endows resources with a new capacity to

create wealth."

Peter Drucker, Management Consultant, Educator and Author

Innovation is the biggest lever for differentiation. In fact, whether consumers choose to buy a brand depends heavily on

whether he or she perceives the brand to be innovative. In our survey, we asked consumers to select the factors which

influence their purchase decisions (see Figure 1).

The first five statements reflect hygiene factors, which are criteria brands must fulfil to even enter the playing field. As can be

seen, the innovativeness of a brand ranks as the most important purchase driver, after taking into account the basic hygiene

factors, with 60% of consumers indicating it as being important when choosing between brands.

Title: Most Innovative Brands in Singapore

Author(s): INCITE, in partnership with AIP

Source: Research on Warc

Issue: June 2014

Downloaded from warc.com

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Figure 1: Claimed pu rchase drivers acco rding to Sing aporeans (base: al l respo nden ts, n=2,010).

Of the factors listed above, innovation lends itself open to the most interpretation. Other influences may be more clear-cut in

the consumers mind. Innovation remains very much a perception game from a consumer's perspective -for what is it exactly

that defines innovation? And it is from this viewpoint that we set out to decode the different dimensions that shape consumer's

opinion on a brand's innovativeness.

Innovation League Table 2014

For the rankings, rather than amalgamating everything into one, we split the results into three sectors: technology, finance and

FMCG, ensuring that we comparison similar categories. Looking at the results you will see innovation is judged very differently

from sector to sector.

Technology

The following are the top-of-mind most innovative technologybrands according to Singaporeans. Do any of the rankings

surprise you?


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Figure 2: Top 20 m ost inn ovat ive technology brands (base: al l respond ents , n=502).

Samsung is number one.Apple, often the epitome of innovation, is now second to Samsungproving that Samsung's shift

away from a second-best mindset. Consistent marketing and product focus have developed the perception of innovation.

Asian brands reign supreme.7 of the top 10 most innovative brands are from Asia.

All 3 local telcos are in the top 10.SingTel is ranked as the most innovative followed by StarHub and M1, respectively.

Creative Technology sits at number 11.To all those who think that the heydays of Creative technology are over, you may

want to think again.

Success story : Samsu ng

Technology rank: 1

Samsung's present day success belies its less than glorious past. In fact, less than two decades ago, Samsung was widely

seen as a second-tier Korean manufacturer making cheap electronic products. Then, things changed. The transformation that

ensued was as unthinkable as the stories that were told.

In 1995, when Samsung phones given out as New Year's gifts were found to be faulty, Samsung's Chairman rounded up

150,000 devices in a field and set them on fire in front of more than 2,000 staff members. Likewise, three weeks before the

launch of the Galaxy S III, when a Samsung customer complained that the back covers for the product looked cheaper than it

was during the demo, the company had all 100,000 covers sitting in the warehouse scrapped and replaced.

One of Samsung's competitive advantages is its extensive vertical integration, which allows it to innovate and adjust faster

than its competitors. While Apple's approach is to have more focused product lines, Samsung's approach is to try everything

and quickly: this is best exemplified by the launch of their smartphones in various screen sizes at a time when the market is

still undecided on what the ideal screen size would be.


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Today, judging by the fact that Samsung sells more smartphones and TVs than anyone else in the world, one can safely say

that its effort has definitely paid off.

Finance

The following are the top-of-mind most innovative financialbrands according to Singaporeans. What are your views?

Figure 3: Top 20 mo st inno vat ive f inancial brands (base: al l respond ents, n=505).

Retail banks dominate the list.The top 10 most innovative financial brands are all retail banks.

"Locals first".If not for Citibank, the four major local banks would have also been the top four most innovative financial

brands as well.

Payment-card brands seem to be an after-thought.Considering their widespread visibility, the rankings for payment-card

brands appear to be a little low, with American Express at number 15 being the first to enter the list.

Insurance brands pack the 11th20th spots.5 out of the 11th20th spots are taken up by insurance brands, starting with

Prudential (11th) and ending with Aviva (20th).

Success story : OCBC

Finance rank: 1

Financial institutions are notorious for being unnecessarily recondite. The very thought of having to scrutinize the fine print of

every document is painful for many. Clearly, there is a need to make things less intimidating.

OCBC is one of the few financial institutions that have managed to do that. To ease consumers, OCBC launched FRANK. As

part of the campaign, customers can choose from 120 different designs to personalize their debit and credit cards. Likewise,

esoteric terms such as portfolios and asset classes, are replaced with simpler words like "savings jars."

Similarly, anyone who has ever had to key in account numbers to make payments or transfers can attest to the frustrating


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necessity of having to exercise military-like caution in ensuring that every digit is entered correctly. To alleviate such pains,

OCBC launched the "scan-and-pay" using mobile banking that allows customers to scan their bill details (account number

and amount), which eliminates the possibility of errors from manual input.

FMCG

The following are the top-of-mind most innovative FMCGbrands (for this study, we refer to packaged F&B, household and

personal care brands) according to Singaporeans. Are your favorite brands included below?

Figure 4: Top 20 most in nov at ive FMCG brands (base: al l respon dents, n=1,003).

* FMCG brand s For this stud y, we refer to packaged F&B, hou sehold and personal care brands.

F&N is at the top.F&N is the most innovative FMCG brand. With a wide range of beverage products, the local manufacturer

is able to beat other more established global brands, such as Nestle and Coca Cola.

"Uncage" the Tiger.No other alcoholic beverage brand even comes close to Tiger Beer's spot at number 11.

NTUC FairPrice is at number 6.NTUC FairPrice is a government cooperative with an unambiguous mandate to keep prices

low. Its intent has never been to crowd-out the private sector, or produce very differentiated products, so its position at number

6 is something worth thinking about.

Colgate is the number 1 personal-care brand.While the top 5 FMCG brands are mostly food and beverage brands,

Colgate is the only personal-care brand within the top 5.

It should be mentioned that the rankings for the FMCG sector, when broken down according to age groups (see Appendix 1),

is the least stable: there is a huge difference between the brands that a younger consumer finds innovative vis--vis an older

consumer. This is unlike the technology and finance sectors, where the rankings are more or less the same across the

different age groups.


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Success s tory: NTUC FairPrice

FMCG Rank: 6

It is almost unimaginable that a government cooperative will ever be associated with innovation; after all, the mere mention

of a government-linked organization conjures up an image of a stereotypical, slow-to-react bureaucracy. This is not quite the

case for NTUC FairPrice.

The esteemed retailer, with over 230 outlets, has evolved over the years. Today, it runs various retail formats that cater to all

kinds of shoppers. From the tiniest FairPrice Express to the largest FairPrice Xtra, NTUC FairPrice has got it all covered. If

you are looking for finer-grade selections, try FairPrice Finest. If you are too reluctant to even leave your house, try the

FairPrice Online Store.

NTUC FairPrice's innovations go well beyond its retail formats: even the shopping hours reflect an effort to innovate. There

are stores that literally run 24/7. Likewise, to overcome the hordes of weekend shoppers, NTUC FairPrice has purposefully

given senior citizens a 2% discount to encourage them to move their shopping to Tuesdays, not to mention, the self-

checkout counters for the more self-sufficient shoppers to help themselves.

NTUC FairPrice has also moved up the value- chain, going beyond just being an intermediary, to being a brand-owner with

its own house- brands: FairPrice, Pasar, and Home Proud. Such is the extent of the innovative effort that has lead to the

success of the retail behemoth that is NTUC FairPrice today.

Innovation in the context of Singapore

Are Singaporeans innovative? Is the environment conducive for innovation? Are our home-grown brands innovative?

Innovation is a huge topic of interest in Singapore. With grants amounting to millions of dollars awarded to spur innovation

every year, one has to wonder how far the country has come in terms of innovation?

To shed light on this, we asked consumers to indicate how much they agree or disagree with the following statements:

1. As a whole, home-grown companies are innovative.

2. Singaporeans are innovative.

3. We have a conducive environment that fosters innovative thinking.

It does not come as much of a surprise to see that Singapore consumers do not think too highly of their own innovativeness.

There is the perception that the society as a whole does not allow for such progress in innovation.

Tying this back to the list of purchase drivers- where products/brands of local origin do not appeal as much to these

consumers-leads us to question of whether patriotic buying is something relevant to the market. In the next section (see figure

6) we find brands on the list that have earned a reputation for innovation.


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Figure 5: Innovat ion in the con text of Singapo re (base: al l respon dents, n = 2,010)

Most innovative Singaporean brands 2014

We asked consumers to list their top-of-mind most innovative Singaporean brands. There are brands like SingTel and F&Nwhich did better on an overall sector ranking, but do not figure as well on this list. When asked about local brands, there

emerges a profile of homegrown brands with small beginnings and later achieved success on a global stage (e.g. Creative

Tech, BreadTalk, or Osim). For a local brand, the innovation story is in part a story of local pride and achievement.

Figure 6: Top 20 mo st inno vat ive Singaporean br ands (base: al l respo nden ts, n=2,010).

Creative Technology is at number 1.Creative Technology is a good example of a brand mining on heritage and previoussuccess. Even without more recent innovations., the brand still sits at number one.

7 out of the top 20 are from the F&B industry. It starts from number 2, BreadTalk, all the way to number 19, F&N. Many of

the most innovative brands in Singapore are from the F&B sector, with the vibrant food scene getting locals most excited.

Hyflux is at number 8.Hyflux, specializing in water treatment-is not so much of a consumer brand but a B2B brand, so

reaching the number 8 spot speaks of how well it has built its image for water systems innovation.

Charles and Keith at 14.The local fashion retailer successfully creates a high-end, sophisticated image having been

acquired by the leading luxury house of LVMH.

Capitaland is at number 20.CapitaLand is in the real estate and property management industry, where innovation is

arguably more limited, therefore its number 20 spot is an achievement for the company.


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Figure 7: Key dr ivers of innovat ion across var ious sectors .

Key drivers of innovation

Innovation is a key purchase consideration for consumers, but what is it that makes a brand innovative? Is it always about

inventing new technologies, or can brands achieve innovation in other ways? Also, what can marketers do to influence

consumer perceptions?

We asked consumers what they thought made a brand innovative and our research revealed five key areas that influenced

consumers on what makes for an innovative brand. These are:

l Leadership

l Product relevance

l Product vibrancy

l Communication

l Approval

Separating these five drivers and defining each one allows us to understand the specific areas of innovation where brands are

either excelling or losing grounds. What we found is that these drivers of innovation have differing significance in the eyes of

consumers, depending on the sector.

Leadership

Leadership statements include the following attributes. A brand that:

l Has been making great products for a long time.

l Always inspires me with their new ideas.

l Has visionary leaders in the company.

l

Is years ahead of its competitors.l Is pushing the bounds of technology and science.

l Launches the best new products/services.

l Is always first to launch new types of products/services.

Across all sectors, leadership is one of the most important drivers of perceived innovation. This is especially so for the

technology sector, where we can see that leadership is the number one driver of innovation. In an environment where

consumer perception matters, crafting an image of leadership, or drawing from a brand's heritage, can help considerably.

Market leaders (like Samsung and Apple) are deemed innovative when they display consistency in what they do rather than

when they continuously launch new products.


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Product relevance

Product relevance statements include the following attributes. A brand that:

a. Makes products that are easy to use.

b. Has products that make my life easier.

c. Makes products that are relevant to me and my needs.

As it would appear, quantity of new product launches does not necessarily translate into perceived innovativeness; the

relevance of the new products need to be given consideration. Innovative products are easy to use and relevant, and should

make life easier.

Not surprisingly, product relevance is the most important driver of innovation in the financial sector, where complicated

products are least appreciated. This is especially so given the aftermath of the global financial crisis in 2009, where countless

ill-informed investors lost much of their wealth. In this regard, OCBC has been the most successful in identifying the rightbuttons to push for their different customer segments.

Product vibrancy

Product vibrancy statements include the following attributes. A brand that:

a. Launches a lot of new products/services.

b. Makes products that are very new and different.

Product vibrancy is about the pace and uniqueness of new product launches. Innovative brands, as would be expected,

refresh their product lines to meet the needs of consumers.

Intuitively, and as corroborated by our findings, this is most important for the FMCG (for this study, we refer to packaged F&B,

household and personal care brands) sector, where consumers are most fickle and willing to experiment with new options. A

brand like F&N satisfies this thirst for variety with its wide flavors and varied choices.

Communication

Communication statements include the following examples. A brand that:

a. Is fun and quirky.

b. Has really inspiring advertising which always makes me want to find out more.

c. Communicates to me in new and different ways.

Communication is about how a brand brings itself across to consumers. Fun, quirky and inspiring messages seems to send

across an innovative vibe, especially when done in new and different ways.

Under the FMCG category, where competition between marketing campaigns is at its fiercest, choosing the right media

platform is just as important as the message itself as they all contribute to a heightened perception of freshness and

innovation.


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Approval

Approval statements include the following examples. A brand that:

a. All my friends approve of.

b. Everyone talks about.

The importance of word-of-mouth marketing is well documented, and approval is very much about it. Not surprisingly,

innovative brands are usually the ones that are most talked about, and which have the approval of people around us. All these

further solidify our opinions on the innovativeness of a brand; therefore, it is essential to generate positive buzz and

awareness on innovative efforts rather than have publicity for publicity's sake.

Conclusion

Innovation is important: it is the number one purchase driver after the basic hygiene factors. However, getting consumers to

see your brand as innovative is not quite that simple. Brands have to grapple with five key drivers of perceived innovation:leadership, product relevance, product vibrancy, communications, and approval. Each of these factors differs in importance

depending on which sector the brand belongs to. Leadership is the most important driver in the technology sector and also at

the overall level. Conversely, product relevance is most important for finance whereas product vibrancy is most important for

FMCG.

It is important to note that this study focuses on top-of-mind innovativeness, coming purely from the point of view of

consumers. While there are a variety of ways to quantifiably measure innovation, what we have created is an innovation

perception framework drawn from people's varied understanding of the concept. With much of the game of innovation being

played at the perceptual level, this report helps to instruct brand-owners on the levers to push to make a brand appear more

innovative. And in many instances, this is the missing key that brands need to cross the chasm.

Appendix 1: Analysis by age group

Take a look at Coca Cola in Figure 8. Those aged between 1834 ranked Coca Cola as number 1 while those aged 55 and

above do not even rank it within the top 10. The same volatility can be said of Dove, NTUC and many others in the FMCG

sector.

Now compare this to the Tech and Finance sectors: the rankings are more or less the same across the different age groups.

OCBC, DBS and Citibank, in fact, are exactly ranked 1st, 2nd and 3rd, respectively, across all age groups.

Why is this so?

Recall that one of the drivers of perceived innovation is communications, and its influence differs across all 3 sectors:

technology (13%), finance (7%) and FMCG (22%). Communicationsis one key area where marketers are most able to adjust

to reach different age groups. As an example, to bring across a younger, more vibrant brand image, marketers in the FMCG

sector might choose to utilize social media campaigns to reach the younger audiences, while continuing to use traditional print

media to reach older audiences. This is not to say that marketers in the Tech and Finance sectors could not do the same, for

they certainly could play around with the media of choice as well.

However, given that the importance of communications is highest in driving perception of innovation in the FMCG sector, and


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that communications is the one driver that is most susceptible to adjustments, FMCG brands' rankings are most likely to be

most volatile.

Or, seen from another perspective, leadership, which is the most significant driver of innovation for the technology sector, is

something relatively stable across all age groups: a teenager is not likely to have a very different view of who the dominant

market leader is compared to his parents (both would likely concur that Samsung and Apple should be at the top). Afterall,

market leadership is less subjective as compared to other drivers, such as communications; hence, the rankings for the

technology sector is much more stable across the various age groups.

Figure 8: Top 10 mos t innovat ive technology brands b y age gro up (base: al l respondents , n=502).

Figure 9: Top 10 mos t innovat ive f inanc ia l brands by age group (base: al l respondents , n=505).


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Figure 10: Top 10 most inn ovat ive FMCG brands b y age grou p (base: al l respond ents, n=1,003).

Incite Marketing Planning

36 Armenian Street #04-02

Singapore 179934

Rosalynn Tang

Managing Director, Singapore

+65 9191 2211

[email protected]

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