On-Trend' Innovation & Marketing Concepts:

Introduction

Innovation is a major driver of growth yet statistics suggest that around 80-90% of all new products fail and industry executives are generally disappointed in their ability to stimulate innovation. This report is designed to help by effectively aligning NPD activity with substantive consumer trends. It does so by identifying 'on-trend' opportunities that arise from the sensory mega-trend

Report Highlights
Highlights

One of the major problems associated with innovating successfully is capturing consumers' imagination. The annual US based ""Most Memorable New Product Launch Survey 2007"" found that even among those with strong brand names, 77% of respondents could not name one of the top 50 new products of 2007 on an unaided basis Today's consumers have transcended more immediate physical or economic needs as a result of developed lifestyles and are seeking higher levels of experiential pleasure and sensation from products. In particular, they are looking for more variety and new ways to experience their favorite brands Details about production, whether touting provenance or overall quality of ingredients or processes provides shoppers with an interesting story that they can potentially share with family and friends. This is indicative of how authentic/provenance driven positions provide additional possibilities in branding
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TABLE OF CONTENTS
Overview 1
Catalyst 1
Summary 1
Table of Contents 2
Table of figures 2
Analysis 3
INTRODUCTION: Using trend frameworks develops the means to boost the quality and frequency of insight generation and new product planning 3
There is a funnel approach to identifying the manifestation of trends 4
TREND: Innovation is a major driver of growth but is a challenging process 6
A number of internal problems can lead to ineffective approaches to innovation 6
Four different types of innovation strategy exist 7
One of the major hurdles to successful innovation appears to be capturing consumers' imagination 9
TREND: New sensual products and concepts are emerging as consumers seek more pleasure, intensity and sensation from consumption 11
TREND: Enjoyment driven consumers are becoming more experimental which makes an emotional connection all the more important 12
INSIGHT: Manufacturers must capitalize on the desire to experiment by arousing curiosity 13
DATAMONITOR VERDICT: Manufacturers must actively tempt today's inquisitive consumers 15
INSIGHT: Manufacturers are creating additional sensual appeal by manipulating the key sensory attributes of products 16
DATAMONITOR VERDICT: Intensifying product sensory appeal must be an important innovation objective 24
INSIGHT: 'Scent-sory Marketing' reflects how industry players are using scent in a creative and innovative manner to engage shoppers 25
DATAMONITOR VERDICT: Marketers are beginning to realize that scent is extremely powerful in shaping perceptions and forging an emotional connection with consumers 29
INSIGHT: 'Sonic Branding' is another emerging discipline in the broader discipline of 'sensory marketing' 29
DATAMONITOR VERDICT: A branded audio identity can help differentiate brands in crowded marketplaces 32
INSIGHT: 'Sensory Packaging' is a powerful tool for evoking consumer desire 32
DATAMONITOR VERDICT: Any packaging concept that enhances the sensory properties of products has the potential to be a key differentiator and is thus highly valued by shoppers 36
INSIGHT: 'Erotic branding' and 'shock advertisements' are marketing concepts being used to bring brands into consumers' consciousness 37
DATAMONITOR VERDICT: Marketers should approach evocative, shock based marketing with caution 38
INSIGHT: Offering 'brand experiences' has become an important branding imperative in the 'experience economy' 40
DATAMONITOR VERDICT: 'Experiential Marketing' and 'Experiential Retailing' will grow in relevance and popularity because it provides a foundation for brand interaction, product trial and brand engagement 43
INSIGHT: Multi-sensory marketing brings together many of the above sensory platforms into one compelling selling proposition 44
DATAMONITOR VERDICT: Multi-sensory branding can help to establish an emotional connection with shoppers 45
TREND: The trend towards authenticity and provenance is beginning to impact mass market products 46
INSIGHT: Origin specific and traceable goods have added appeal to today's discerning shoppers 48
DATAMONITOR VERDICT: Being more open and transparent will become a key feature of marketing communications in the future, especially with more brands using provenance as a point of differentiation 55
INSIGHT: The growing importance of authenticity and provenance means that touting brand heritage becomes increasingly important 55
DATAMONITOR VERDICT: Terms like 'heritage', 'authenticity' and 'personality' can be seen as the building-blocks of an aspirational brand image 61
TREND: More affluent and expectant consumers are trading up more frequently 62
INSIGHT: Manufacturers must re-align products to reflect changing perceptions of what is considered to be 'premium' or 'luxury' 62
DATAMONITOR VERDICT: Being a mid-market brand is a dangerous place to be 66
INSIGHT: Premium is still a high price related to extraordinary factors perceived and experienced by consumers 66
APPENDIX 68
Definitions 68
Methodology 68
Further reading and references 68
Ask the analyst 70
Datamonitor consulting 70
Disclaimer 70
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LIST OF FIGURES
Figure 1: Datamonitor's mega-trends are having a long-term and substantive impact on the marketing landscape and can be grouped into two categories 4
Figure 2: Consumer behavior and the innovations targeting it inevitably fit into a 'trend hierarchy' 5
Figure 3: There are four different approaches to innovation and six kinds of innovativeness rating 8
Figure 4: Attitudes towards innovation vary markedly and influence the inability of new products to capture the imagination of CPG shoppers 10
Figure 5: There are numerous factors influencing sensory trends in consumer packaged goods 11
Figure 6: The sensory mega-trend reflects consumers' desire for experiential pleasure, intensity and sensation from products 12
Figure 7: People are looking for new consumption experiences so industry players must carefully consider how to arouse consumer curiosity and induce product trial 15
Figure 8: Marketing communications and actual product features can be manipulated to maximize the visual dynamics and sensory appeal of brands 17
Figure 9: Beer manufacturers are actively targeting more adventurous palates with fruity beers 18
Figure 10: Food and beverage marketers are delivering additional sensory excitement with new textures, bolder flavors, flavor blending and co-branding with iconic branded flavors/ingredients 22
Figure 11: Manufacturers are looking to reinforce the sensual credentials of products though engaging brand names and written communications while Guinness typifies efforts being made to help consumers replicate 'third-place experiences' and quality within the comfort of their own homes 24
Figure 12: Opportunities exist to use scent in a more creative and engaging manner 28
Figure 13: A variety of brands have been using brands in different ways to create a 'sonic' identify 31
Figure 14: Easily confusable, active packaging and intelligent packaging are actually two distinct concepts 34
Figure 15: There are a number of new smart packaging/label innovations entering the market 34
Figure 16: Packaging materials can be manipulated to enhance the sensory experience for consumers 36
Figure 17: Brands are using edgier, erotic and shock tactics to get noticed in an increasingly cluttered marketplace 39
Figure 18: Experiential 'third-places' are becoming an established part of experiential marketing campaigns 42
Figure 19: Experiential marketing exists on different levels 43
Figure 20: The search for authenticity reflects consumers' active pursuit for higher quality experiences from consumption 47
Figure 21: Health and provenance conscious consumers want to know about the products they ingest or topically apply so manufacturers are making greater efforts to be transparent 50
Figure 22: Provenance/locality and production details are issues that increasingly matter to shoppers 54
Figure 23: Iconic imagery can add an authentic aura to a marketing communication 57
Figure 24: Touting brand heritage becomes increasingly important in light of the growing importance consumers attach to growing importance of authenticity and provenance 60
Figure 25: Using 'ordinary' people in marketing looks set to become a more established feature of marketing campaigns 61
Figure 26: Firms in the middle need to move either up or down-market or face ""death in the middle"" 63
Figure 27: Mass market brands are having to premiumize just to stay relevant 64
Figure 28: While many brands should be looking to premiumization opportunities, PJ smoothies is an example of how industry players must be prepared to re-align products towards the lower end of the market as well 65
Figure 29: Manufacturers must excel - more than competitors - in the provision of factors associated with the Premium Price Index (PPI) 67
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