VYPR brings you the latest thinking from pioneers in FMCG product innovation. This week, we review the latest research from think tank Newton Europe that finally puts a staggering £3bn opportunity cost on branded and own label product developers from ineffective development processes. According to Newton, the wasted cost is largely determined by an accumulation over time of 1000s of product changes – and failing, antiquated processes – that incrementally add production cost with little value added to either the business or customer.
Having worked in the FMCG sector for 15 years – in both retail and manufacturing – we founded VYPR to close a huge product intelligence void in the industry. For those people charged with bringing new and revised products to market, there is a tangible lack of intelligence to give them a deep understanding of what impact those products might have when they launch, as well as what they can do to improve those products’ chances before they launch. Scarily, the vast majority of manufacturing clients that we talk to at VYPR have no clear idea on what their ROI is when it comes to innovation. Many CEOs of the companies we work with think at best it’s neutral. At worst, they are making substantial losses when they factor in all the costs required to get these new products on shelf. So, what can we do right now to change this?
Split Testing, also known as AB Testing in software development circles, is something that the FMCG industry is yet to embrace. A simple definition of Split Testing is comparing 2 different versions of the same thing to see which performs better. Software Developers use it regularly to test slightly different versions of the same feature to see which one is more impactful. In their world, they create two different ...
According to McKinsey, 75% of new products fail in their first year. here's a few thoughts from our consultants on how to avoid the pitfalls:
No clear brief. NPD for NPD’s sake without clearly defining the objectives is a waste of everyone’s time. It's vital to set a clear plan at the outset, the objectives should include learnings from the previous development. So, planning for next Christmas must start with the take outs from last Christmas.
Losing sight of your end user. This can be easy to do when there are developers, designers, marketers and agencies to please. It is vital to always focus on a clear idea of your core customer and the problem you are helping them solve. Cosmopolitan is a strong global brand with magazines distributed in more than 100 countries but in 1999 they made a rather bizarre decision to brand and sell yogurt. Needless to say, the yoghurt buying public preferred...
Every business is different but successful product performance is dependent on a few simple, yet often overlooked principles. Here's some of our thoughts on what makes great product performance work.
1. Define the problem your product will solve or the gap in the market it will fill. All successful new products are a response to a consumer problem. Make sure that your idea is something consumers are looking for, rather than innovation for the sake of it. After 250 years in the spirits and beer business, Diageo has recently recognised the opportunity in non-alcoholic drinks...
We recently commissioned some research on market research. A staggering number of respondents (product developers, marketers and retailers) don’t test new products with consumers at all. Many have become disillusioned with traditional market research methodologies (focus groups in fusty box rooms, surveying shoppers in freezing cold fresh food aisles in supermarkets with a clipboard, that sort of thing) for three reasons.
Research and Development (R&D) tax relief (R&D) is a tax break provided by the Government to incentivise UK companies to innovate and develop new products and processes, which can return up to a third of the cost!
Qualifying SMEs can save 46% of their R&D spend off their tax bill or, if they are loss making, can get up to 33% of their R&D spend as cashback. Large qualifying companies can claim cashback of 8.8% after tax.
McKinsey's report on Driving Success Through True Product Excellence highlights that 75% of new products will fail in their first year, citing three key reasons: