1 Using tomorrow’s consumers to launch tomorrow’s products Guy Kemplay UK Head of Segmentation & Positioning TNS

fail in year one of new brands Source: TNS Worldpanel

Are you doing your homework? Factors that contributed to successful product Main causes of new product success: Source: Booz Allen & Hamilton

Achieving Disruptive Innovation Wikipedia definition: A disruptive technology or disruptive innovation is a technological innovation, product, or service that eventually overturns the existing dominant technology or status quo product in the market.status quo -You won’t get there with ‘average consumers’ -And Early Adopters might just fuel the next fad -For a real chance at step-changing the market in a way that could lead to sustainable growth…… change who you are talking to…. -Get alongside your category’s Future Shapers

When launching new products, Future Shapers have a larger and more enduring impact than Early Adopters Source: 2005 UK Carbonated Soft Drinks study 30.7% 29.7% 0%10%20%30%40% Average Trial 12.0% 15.2% Average Trial + Retention Future ShapersEarly Adopters 6.8% 10.2% Average Trial + Retention + Recommendation Future Shapers are 51% MORE LIKELY to Meaningfully Adopt

Future Shapers and word of mouth – a big impact! “In the last week, have you spoken to someone about a brand” % saying “yes” UK Future Shapers Average Consumer Number of brands spoken about yesterday Mean no. of brands, based on all respondents

Future Shapers are more engaged! % who have ever…

Future Shapers are the engines of brand growth… Brands -20% -10% 0% 10% 20% 30% 40% Per Annum Brand Growth/Decline Weak amongst future-influential Strong amongst future-influential Strong correlation (0.77) between strength among future-influential consumers and brand growth

Attracting Early Adopters is not a reliable route to growth Weak amongst Early Adopters Strong amongst Early Adopters Adoption Index Weak correlation (0.24) between strength among Early Adopters and brand growth Per Annum Brand Growth/Decline -20% -10% 0% 10% 20% 30% 40% Brands

Good ideas get shot down Ahead of their time Mass market not ready Safe “me-too” concepts get progressed Easy to say yes to But will struggle to cut through Avoiding the PIT (Predictable, Incremental innovation Trap)

Concept Opportunity Map: The wave analogy Future Opportunity Index Purchase Intent exceeds Action Standard Purchase Intent falls short of Action Standard Weak amongst Future Shapers Strong amongst Future Shapers Missed the wave Ride the wave Create the wave What wave?

Keeping alive great ideas: Hershey USA Hershey are not short on ideas In fact they have too many …. and so use regular quantitative screening to help prioritise which concepts to move forward with These tests show which concepts will most likely succeed in today’s market BUT they will NOT identify concepts that are ahead of the market and offer great opportunities for sustained growth in tomorrow’s market. So some great ideas may be lost? The solution – Hershey now routinely incorporate FutureView into their concept screening to identify the future potential of ideas as well as the ‘today potential’

202 Hershey Concepts from 2006/7 Future Opportunity Index Purchase Intent exceeds Action Standard Purchase Intent falls short of Action Standard Weak amongst Future Shapers Strong amongst Future Shapers Re-think these concepts: are they really such a good idea? Ahead of the market ideas that could step- change the market and leapfrog the competition

Mature Opportunities Greater than average importance today BUT less relevant to Future Influencers - these will continue to be ‘mandatories’ but do not offer potential for differentiated long-term growth Power Opportunities Greater than average importance today AND more relevant to Future Influencers - these are the attributes that most guarantee future relevance and offer strong opportunities for growth Niche Opportunities Less than average importance today AND less relevant to Future Influencers - these are the attributes that support smaller opportunities today, and which are less likely to grow in the future Emergent Opportunities Less than average importance today BUT more relevant to Future Influencers - these are the attributes that offer NEW opportunities for growth – they may be small at first but will likely become more relevant to the mass market with time 30% 40% 50% 60% 70% 80% 90% FO Index Attribute Importance Weaker future- influence Stronger future influence Identifying Evolving Needs……

Niche OpportunitiesEmergent Opportunities Creamy Good taste Enjoyable texture Nice color Rich flavor Right amount sugar Right amount fat Right amount calories Sweet Have a lot of fruit Have real fruit Great variety of flavors Contains protein Contains vitamin A Contains vitamin D Contains vitamin B Rich in calcium No preservatives No artificial colors No high fructose corn syrup Only natural ingredients Organic ingredients High quality ingredients 30% 40% 50% 60% 70% 80% 90% FO Index Top 2 box importance % Weaker future- influence Stronger future influence Mature OpportunitiesPower Opportunities

16 A fundamental, but often overlooked fact: Not all consumers are equal, some lead, while others follow….. We need to remember this in concept testing