The Anatomy of a Successful New Product

The article below appeared in a recent issue of Stagnito Magazine®. It was written by Tim Coffey, The CEO of LaunchForce – the new product development division of WonderGroup.

The anatomy of the body provides a useful analogy to highlight a number of critical factors that can impact new product success. Specifically, we have found that when we systematically consider each of the New Product Anatomy Success Factors, that the results are significantly improved. The New Product Anatomy includes: Head, Eyes, Heart and Hands. Each of these vital body parts represents the critical facets of a new product anatomy that must be carefully considered and defined in order to maximize the probability of success in the marketplace.

The first and perhaps most important part of the anatomy is the Head . We define the Head as Target Audience Mindset. This is the underlying motivation of the buyer that helps to guide brand decisions and/or the underlying motivation of the end user that drives influence on brand decisions. Much of our work has been for clients whose product opportunities involved targeting families, so we consider the motivations of both moms and their children, with mom as the buyer, and often, the child as end user and influencer. Our notion of this pair of consumers is that they actually act as one single buying unit, thus we refer to them as the “Four-Eyed, Four-Legged Consumer™.” The model shown below highlights the basic motivations of both mom and child, and illustrates the feedback between them that ultimately guides behavior. We know that any new product targeting families must in some way address the basic motivations of both mom and child.

As an example of the Head or Target Audience Mindset, we recently helped Johnson & Johnson develop and launch Johnson's Buddies line of personal-care products for toddlers. By utilizing in-home observational research guided by our Four-Eyed, Four-Legged Consumer ™ Motivations Model, we discovered that moms desired products that could specifically help them make bath time and grooming of their toddler easier (simplify) and that would help them teach their toddler basic hygiene habits (nurture). From the toddler's point of view, we identified a strong need for greater control (power) over the bath-time experience, and a number of opportunities to improve the overall enjoyment (fun) of the process.

The next component of the anatomy is the Eyes. The Eyes refer to the frame of reference of a product concept which is the overarching benefit stated in the context of the category of focus or occasion. In the case of Johnson's Buddies, this would be stated as Johnson's Buddies makes bath time easier and more enjoyable for moms and their toddlers. In a sense, the Eyes statement becomes a strategic mission for the new brand that will provide the guardrails for future development of line extensions and product improvements.

Next, the Heart of a new product is the determining factor that will differentiate a success from a failure. We refer to it as the Emotional Point of Difference, which is an ownable, defendable point of difference that carves out a distinct place in the mind of the consumer on an emotional level. When we say emotional, we are referring to how the consumer connects with the product using the emotional half of the brain that processes imagery, feelings, and sensory information.

For Kellogg, we helped develop new Tiger Power cereal whose Heart or Emotional Point of Difference could be stated as: Tiger Power cereal helps kids grow healthy and strong. Moms can see and feel this emotional point of difference without a lot of explanation. The brand name and identity both strongly support this idea.

Further, the Hands of a new product concept represent the Functional Point of Difference, or the brand's main attribute of focus that directly supports the Frame of Reference and Emotional Point of Difference. In other words, the Hands address the rational side of the brain. In the case of Kellogg's Tiger Power cereal, the Functional Point of Difference is that it is the only cereal to provide protein, calcium and whole grain, the essential building blocks for a child's growth. This attribute is reinforced and made more ownable in the food design, which is a sort of triangle that cleverly resembles the three nutritional components.

In summary, by carefully considering the anatomy of a new product concept--- the head, eyes, heart and hands – we can improve the likelihood of success. This process forces us to consider whether the product satisfies a genuine need, and how our brand will uniquely satisfy that need – both now and into the future.

If you'd like to learn more about how LaunchForce can help you with your new product development needs, please contact Greg Livingston at 513.357.2950 or glivingston@wondergroup.com or asheurer@wondergroup.com.

Kids

Bad Spy

Researchers at Symantec Corp® recently took a brand new PC out of the box, connected it to the Internet without any standard protection software, and did a little browsing. The results were staggering. After visiting five or six web sites aimed at kids, and clicking around a bit, the computer had been uploaded with 359 different pieces of adware and a flood of pop-up ads followed. The researchers did a similar exercise with adult-targeted web sites (an experiment with travel sites produced 64 adware programs and sports sites 17), but kid-targeted sites were the worst by far. According to experts, pop-up companies aren't clamoring to get ads directly in front of children. Rather, they are just getting at parents through their kids. They say kids are easier to manipulate, and the behavior they engage in makes it simple for companies to sneak software on to their PCs. Kids hunting for song lyrics, free games or video game “cheats” are enticed with games like “punch the president” or offers for a free iPod®. Often, a single click on an ad followed by one more click is enough to doom a PC to a deluge of pop-ups.

WonderGroup's Perspective

Viruses, non stop pop-ups and computers that move at the speed of snails – adware and spyware are serious threats to bring down the Internet. Like every other medium, advertising on the Net can be effective when done the right way. However, makers of spyware are harming even the most legitimate advertisers by frustrating users and making them wary of all ads. These companies are giving parents one more reason to fear letting their kids use the Net. Of course spyware companies deny that they are targeting kids. They say that many of the gaming sites have strong adult demographics and that anytime they buy from an ad network, they request adult demographics. But the experts aren't buying it. Regardless, though all of this threatens to severely harm the Internet, it does open the door for companies that produce adware and spyware protection to profit even more. Many Internet service providers can also win by offering these services as part of the subscription price.

Tweens

Game On!

Ever since the Big 3 in the gaming world announced plans for their next generation consoles, fans have been filling up message boards arguing which new system will reign supreme.

Sony's® PlayStation 3® (PS3) console is due out in spring of 2006 and, besides all the new games, the console will allow users to play their PlayStation and PlayStation 2 games as well. Wireless controllers will come standard and the system will support up to seven simultaneous players.

The PS3 will come with a DVD drive and support the sharpest format for HDTV. It will also allow users to access digital video and audio files, view digital pictures, offer video chat and allow users to access the Internet (even wirelessly). There is still debate about whether the PS3 will ship with a hard drive or if that will be separate. Either way, gamers will have a choice of various-sized hard drives they can buy.

Many specifics are still undetermined for Nintendo's® new system, code named Revolution. No formal date has been set for the 2006 release. Revolution will allow users to play GameCube® titles as well as download 20 years worth of Nintendo games from earlier consoles. The new console may come in as many as five different colors. The system will play DVDs and feature inputs for four controllers and two memory cards. Revolution will support wireless controllers and WiFi Internet access. In the spirit of the successful Nintendo DS® (Dual Screen) portable system, the company will focus on unique controllers and other proprietary devices that will enhance the overall game experience and separate Revolution from its competitors.

Microsoft's® Xbox 360® is a “chilled white” console with chrome accents. It will come with a wireless controller, a small 20 gigabyte hard drive and built-in HD DVD playback. Gamers will also be able to buy a digital camera, WiFi adapter and up to three more wireless controllers. The Xbox 360 will be able to extract media from user's PCs or mobile devices. The popular Xbox Live function from the original console has been improved to support voice chat, video chat and messaging, and downloadable content such as trailers, demos and new game levels. No firm release date is set, but most expect the console to hit shelves around November 2005 and retail for $300 to $400. The system features high-def sound and graphics and Microsoft is betting heavily that this focus on high-definition gaming will win the day.

WonderGroup's Perspective

Microsoft and Sony seem content to battle each other head to head, while simply ignoring Nintendo like a pesky little brother. Nintendo is looking to build its library with older, edgier games in order to overcome the perception of being for “little kids.” The company has also made the choice to avoid directly duking it out with Sony and Microsoft. Instead, its console will focus on using unique controllers and accessories to change the

entire gaming experience and draw non-users into the market.

Microsoft has the ideal combination of technological expertise and a motivated corporate management that wants to win in the video game business. Its focus on high-definition gaming and an expanded library that has finally caught up to Sony's, should help Microsoft win sales from gamers in the market for their first console. Microsoft will also be first to market, which will help when it comes to trendsetters looking to get the hottest toys first. However, most gamers looking for the best overall system will likely wait for the release of the PS3 to see how the two systems stack up against each other. (Many gamers will also wait for the high introductory sale prices to fall on all the systems).

When it comes to experienced console owners who are looking to upgrade to a next generation system, Sony has a shot to win big. The company has a lot of very loyal PlayStation franchise lovers. In fact, from the beginning, Xbox was widely considered the superior system, yet, because of the immense popularity of the original PlayStation, according to Jupiter Research®, Microsoft only owns 19% of the U.S. console market, compared to 43% by Sony. Add to the mix that the new systems will allow users to play games from the older system and you can bet that most gamers will stay brand loyal when upgrading. So, unless Microsoft releases a truly superior product or Nintendo's unique approach to gaming overwhelming strikes a chord with users, Sony seems to have the early edge in the battle of the next generation consoles.

Teens

Just Send a Card

A study commissioned by Stored Value Systems Inc.,® reveals that 93 percent of American high-schoolers have received at least one gift card in the last year. When these teens get a gift card, 59 percent of them use it up in the first month, in the first visit. When it comes to giving gifts, a majority of teens spend up to 10 percent of their disposable income on presents and, most of the time, those presents come in the form of a gift card. 67 percent of teens have purchased a gift card as a present, and a majority of these respondents saw gift cards as the best choice for a gift. 77 percent said this is because they know the recipient can get what he or she wants. Birthdays are the most popular gift-giving occasion and $25 is the most desirable value. When shopping for gift cards, 50 percent of teens say that appearance and having a choice of card designs was important in their decision. Music and apparel gift cards are the most popular retail categories when it comes to teens' gift card purchases (65 percent), followed by electronics, books, restaurants, video rentals and movie theatres.

WonderGroup's Perspective

Gift cards are the perfect solution for all gift-giving occasions. They are quick and easy to shop for and they are seen as more personal than just giving money. Plus, there is no need to worry about whether the recipient will like the present because he or she gets to pick out exactly what they want. All the gift-giver has to do is pick a place, and there's very little risk in that. The only downside is that the recipient knows exactly how much the giver spent, but that's pretty easy to estimate with other gifts anyway. For retailers, not only do gift cards generate revenue, they also generate valuable loyalty with teens. Because of this, retailers should think twice before instituting monthly maintenance fees, expiration dates and other rules and charges that might upset their teen gift card-buying customer base. To increase sales of gift cards, retailers should focus on making them look cool and giving teens several designs to choose from.

Moms and Families

Fruit & Veggie Tales

A recent study done by the Produce Marketing Association® gives new insight into the way parents shop for produce. 62 percent of parents said that fresh produce purchases were planned and 24 percent said they tended to be impulse purchases. There are several factors that influence this purchase decision. Price (mentioned by 43 percent of respondents), convenience (mentioned by 40 percent), nutrition and health (mentioned by 70 percent) and, of course, taste (mentioned by 77 percent) are all extremely important. Only 13 percent of those surveyed said that brand name is extremely important when shopping for fresh fruits and vegetables. Every parent in the world wants their kids to eat more fruits and vegetables and 60% of the respondents from this study said that taste/inconsistent taste are the biggest obstacles in making this happen. Of the fruits and vegetables that their kids do eat, most are eaten during snack time (mentioned by 46 percent of respondents) and dinnertime (mentioned by 30 percent).

WonderGroup's Perspective

No major surprises here. The biggest factors impacting parents' purchase decisions for produce are the same factors that influence their purchase decisions for most other products – price, convenience and a concern for whether their kids will use or consume the product (called taste in this case). As for brands in the category, it looks like continued bad news. Wal-Mart® and the rest of the giant retailers are already doing their best to make individual brands in the produce section irrelevant and, according to this study, most consumers already find these brands unmotivating and unimportant. Produce brands can avoid getting caught in this unprofitable price war by focusing on innovation, specifically in packaging that meets consumers' demands for convenience. Also, the study identifies that kids are not eating much fresh produce during school lunches. This presents another big opportunity (especially given the health/obesity focus) for brands to create products that are attractive to both students and school lunch planners.

Halloween's Hottest

Now that back-to-school is officially coming to a close, the retail
focus is on the next big Holiday. No, not Christmas, although the retail
season does seem to come earlier each year. For kids of all ages,
October brings the ultimate chill-fest, Halloween.

And what is predicted to be popular on the kid-costume front this year?

According to buycostumes.com®, which claims 70% of Halloween shoppers
start contemplating their costumes as early as August, the biggies for
boys this year come primarily from the Silver Screen: Star Wars® (Darth
is always a hit, and Anakin is extremely popular), Batman (version from
Batman Begins®), Harry Potter®, The Fantastic Four® and even Willy
Wonka® (that should be scary) followed by the standards which include
superheroes like Superman®, Captain America®, Power Rangers® (yes, Power
Rangers have been around so long that they are now considered a
Halloween standard), pirates, etc.

Girls will continue to go for Barbie® costumes (such as Barbie Deluxe
Renaissance Princess®), American Idol®-themed costumes, the Disney
Princess® collection and a variety of the ole standbys (generic
princesses, cowgirls, etc.)

All of this excitement means retailers will scare up some pretty big
business. Halloween is now considered the second-biggest holiday of the
year. According to Ellen Scoinic, writing for TD Monthly® (a trade
magazine for the toy, hobby, game and gift industry), the typical
consumer will spend about $45 on Halloween treats, costumes and
decorations. When you multiply that by the number of people that
participate in Halloween, (and you can be certain it¹s not just kids
anymore) you end up with a truly monstrous number.

So, keep an eye out for Darth or Cinderella on October 31st — have fun
and compliment the kids that stop by your house ­ it¹s a big deal to
them. And have a frightfully good time!