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New age of innovation – through experiences, not products

Mahesh Agarwal

Executive director

Kantar TNS

Mahesh.Agarwal@tnsglobal.com

 

ENCOUNTERING COMMODITIZATION

Marketing directors can frequently be heard to say: “My biggest problem is the increasing commoditization of my business”. They see lower priced “me-too” brands taking away their market share, and with promotions becoming a given for them to sustain their volumes, they are no longer able to protect the bottom line.

Many say continuous innovation to keep the brand exciting is the key to growth. While there is no denying that innovation is one the core drivers of growth, we need to reconsider our approach to innovation and what are we trying to achieve.

Working on product innovation for the last 20 years with some of the world’s top brands has taught me that random innovations – such as launching a range of new flavors – does more harm than good to a brand.

So, how should brands approach to meaningful innovation?

HUMAN PHYSIOLOGY AND INNOVATION

If you ask me to explain in just one word the future of innovation it would be “experience”. Whatever we buy or use, what we are seeing deep inside our hearts is experience.

And there is good amount of physiology involved in this. A good experience makes us happy, and happiness releases endorphins, dopamine, serotonin and oxytocin in the brain. We get more and more addicted to a product as our brain craves the products that make it happy. That’s why experience is classified as being driven by the “right brain”, while rational, price-based decisions are all “left brained”.

TYPES OF EXPERIENCE

The obvious next question is:  what are the different types of experiences we can create with our product? Broadly speaking, humans seek out three types of experience.

 

 

A.     Social bonding – This is how an experience triggers a sense of bonding or intimacy with those around us. It is not just about making bigger packs and hoping that consumers will decide to share, but consciously building sharing into the product and packaging. Just imagine a biscuit brand making a “father and daughter” pack – which has half a pack of healthier biscuits (with less sugar) for the father, and half a pack of indulgent ones for the daughter. They share the pack and this increases not only their bonding with each other, but also with the brand. The Oreo “Dunk with Milk” campaign created a similar experience.

 

B.        Sensorial stimulation – This is how our experience stimulates either our physical senses (through sight, sound, touch, taste and smell), or our intellect, imaginations, emotions or dreams. Many a brand has tried to create a ritual around the consumption of a product, which is aimed at enhancing a sensorial experience. One of the trends in the Indonesian beverage market nowadays is pearl tea and jelly drinks. These products are doing well because they can create sensorial stimulation beyond drinking, and can impact multiple senses at the same time. A similar example is a snack brand called Oishi, which has a pillow-style product that provides sensorial stimulation with melted chocolate within a crunchy outer core.

 

C.     Individual expression – Another dimension of experience is when the product is able to support individuality, uniqueness or self-development. Here, the product becomes an extension of oneself and provides an inherent sense of contentment and strength. Sticking to beverages, one classic example of this is Coke Zero or Diet Coke. While the rational reason behind buying it is health, the emotional experience is of self-expression of one’s individuality. The need for individual expression is relatively low in Indonesia as this is a strongly affiliative market; however, it is growing and will become more and more important in days to come.

 

TAPPING INTO MICROMOMENTS TO INNOVATE AROUND EXPERIENCES

Different categories operate at different intensity levels relating to each of these three experience needs, and the trick is to figure out which of these experience needs is underserved in your category.

One of the new ways to understand this is by tapping into what we now know as micromoments. Micromoments are not just occasions of consumption – but times when occasions meet some specific emotion. Breakfast is an occasion, but a serious business breakfast is different from relaxed breakfast alone, an on-the-go rushed breakfast or a fun family breakfast. The needs of the experience differ for each of these micromoments. We need to assess these micromoments from the perspective of our category and develop innovations to create experiences around them. If we are able to do this well, we will be home and dry – and will keep the competition at bay.