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Unformatted text preview: 10 Customer-centric innovation Consumer-centric innovation Tapping into consumer insights to drive growth 1 Customer-centric innovation Innovation. Its a word that appears in just about every annual report from companies that sell products for the consumers end use. Everyone talks about it, but, sadly, very few companies think innovatively about the concept, particularly when it comes to new product development. Instead, many consumer-facing organizations remain focused on risk-averse activities that satisfy Wall Streets expectations for slow-but-steady growth. They have steered away from the truly innovative, but often costlier, market making products. Because such staid corporate strategies do little to excite consumers, growth trajectories for many of these companies remain about as uninspired as their new product plans. While many executives acknowledge this failing, they also admit that true innovation remains a crucial pathway to long-term success, even for the mature sectors within the consumer products arena. Company mind-sets as a result are slowly changing. More organizations are now starting to leverage the sweeping social and technological changes that allow them to move beyond their traditional product innovation approaches. At Deloitte, we believe that companies should consider six steps to help make their innovation efforts more consumer centric. These components, which will be discussed later in this report, provide companies with a new way of thinking about innovation that often can yield favorable long-term results. Carving a path for long-term success Me too product strategies = Me two profi tability Companies ideas around innovation are changing because, in todays hypercompetitive business world, the previously much-used Me Too strategy of line extensions and copycat introductions of competitors products has often lead to Me Two profi tability. That is, lack of truly innovative product introductions that appeal to consumers has produced lower returns on investments. In contrast, the innovation leaders, with their fi rst-to-market advantage, often become the Me First winners in consumer acceptance and brand relevance. Certainly, the process of bringing new products to market has not been easy. Various results over the years suggest as much: Less than 5% of new brands reach $50 million in year- one sales, according to Information Resources Inc. (IRI) 69% of respondents to the Most Memorable New Product Launch Survey could not identify one new product introduced in 2008. Source: Schneider Associates, Mintel International and IRI With 80% to 90% of new products disappearing from store shelves within a year, the success rates of launches have gone virtually unchanged for the past 30 years, said IRI President of Consumer and Shopper Insights Bob Tomei, in an August 20, 2008 press release....
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This note was uploaded on 02/25/2012 for the course CSR 332 taught by Professor Staff during the Spring '08 term at Purdue University-West Lafayette.
- Spring '08