Advanced Marketing and R&D: Summary of Results IRI Annual Meeting 5/07/07 Ron Cotterman (Sealed Air) Alan Fusfeld (Fusfeld Group) SME Pamela Henderson (New Edge) SME Jonathan Leder (Novozymes) Carl Loweth (John Deere) Tony Metoyer (Boeing)

Advanced Marketing and R&D 5/8/07 Research Methodology 1. Survey  33 companies, known for innovation  Participants in B2B and B2C, emphasis on B2B  High-level executives from corporate and individual divisions  Company size – $500 million or greater 2. Panel discussion from top innovative companies  greater depth on findings from survey 4

Advanced Marketing and R&D 5/8/07 Levels of Success and Satisfaction Fully satisfiedBreakthrough LEVEL 4 Somewhat satisfiedSome Breakthrough LEVEL 3 Somewhat satisfiedIncremental LEVEL 2 Not satisfied Existing/Minor Improvements LEVEL 1 SatisfactionSuccess 6

Advanced Marketing and R&D 5/8/07 Stimulating Breakthrough Innovations Highly innovative companies implement:  Formal Organizational Structure Divisional and corporate level NPD teams Systematic idea-generation processes  Qualitative Market Research Processes Adopt qualitative methods to discover unmet needs Engage customers in ongoing validation Involve both marketing and technology  Corporate Culture of Innovation Balanced portfolio of marketing and technology ideas Leadership actively models teamwork Frequent and varied reward system Employee creative time for new product ideas 23

Advanced Marketing and R&D 5/8/07 8

Advanced Marketing and R&D 5/8/07 Panel discussion participants Alan Ayers, Energizer AA Martha Collins, Air Products MC Steve Lerner, Praxair SL Alan Fusfeld (moderator)

Advanced Marketing and R&D 5/8/07 How are your companies organized for radical new product innovation? Organized at corporate level  corporate development office  global marketing leaders  high level involvement: Directors, VPs, CEOs, CTOs  not all risk is focused on individual SBUs Worldwide focus and scope  Adapt new technologies to individual markets

Advanced Marketing and R&D 5/8/07 How do you find big new market opportunities? Extensive VOC systems Close contact with end-users Sample to learn (not always to sell) Lead user analysis Organizations with full-time responsibility for identifying trends and how to participate

Advanced Marketing and R&D 5/8/07 How can you develop a collaborative culture between R&D and Marketing? Technical managers part of business teams Shared goals and metrics Shared training in customer focus techniques, e.g., VOC  common language and methods Lots of communication and meetings Joint visits to customers, and strategy sessions Cascading goals translated into personal goals “Wear bifocals” Corporate culture of innovation  awards  success breeds success

Advanced Marketing and R&D 5/8/07 In summary Close cooperation between commercial and technical organizations at all levels, from corporate strategy formation to customer visits Organizational culture of innovation  starts from the top  aligned goals  frequent rewards  structured for innovation