What is important, Innovation or understanding consumer need?

20 memoirs from my 20 years@Philips

#MySCOREatPhilips

The root of most of the innovations stem from consumer or customer needs. However, mostly it is a temptation that every business has: taking an innovation that is successful in one market and launching it in another to gain scale and grow the business. There are numerous examples and case studies available that touch this topic. I will share a few insights from my frontline consumer/customer service experiences that have helped me understand what works well and what does not. 

Curious Case of Coffee Maker

In the early stages of my career in India, i.e., 1997-2000, Philips launched a host of small home appliances from our global range and a few locally developed products like the Mixer Grinder, i.e., an India-specific food processor. India being a sizable market of filter coffee drinkers, the global drip filter coffee maker was one of the Philips India team's launches. Back then, in terms of small home appliances, India was a relatively small market compared to other countries. Developing India-specific products with low volumes were of tall order. The target market in India was the south Indian states as filter coffee drinking is prevalent. We were one of the first multinational companies to launch this product in India. A good launch plan backed by trade marketing tools, live demonstrations, distribution plans, etc., was put in place by the business team. Well-known retailers made the product available in their stores. The purchase of the product by consumers, retailers, and distributors was initially good. However, with time, it slowed down substantially. On my engagement with consumers when products used to come to our service centers with complaints, I came to understand that their expectations from a coffee maker were different from what our product delivered. The coffee decoction, i.e., brewed coffee before pouring milk and sugar, was not strong enough to make coffee that they are used to. Most of the Indian households in the south of India use a manual traditional metal filter coffee appliance that gives strong brewed filter coffee decoction (seen in the background of the above image). While many consumers compared it to this appliance, some others would point me to a local electric coffee maker that delivered the result they expected. There were no issues from the quality perspective with the Philips Coffee Maker; however, it was delivering coffee that was not as strong as the consumer expected.

Philishave and Sachin Tendulkar

During the same period, the world-renowned Philips Dry shaver (known as #philishave back then) was launched in the Indian market in a big way and had one of the famous cricketers Sachin Tendulkar (now fondly know as #godofcricket) as a part of campaign for Philishave. Back then, most of the consumers were used to wet shaving, i.e., using the traditional shaving cream and using a single-blade shaver. As a teenager, I recall the hassle of shaving every day. The product was aimed at youngsters, i.e., one of the reasons for selecting a young cricket icon. The product highlighted the hassle-free, safe, quick shaving experience and delivering a similar result to the traditional shaving method. Despite a sizable amount of marketing effort, the adoption and sales were not in line with our expectations over time. With time, the momentum that was initially created was lost. Factors like minimal understanding of dry shaving, the cost of the shaver, and humidity were some of the key reasons for the consumers not to go for the product wholeheartedly. I used to hear some consumers who were extremely happy with our shaver (mostly from the older generation), whilst the ones from my generation used to share issues mainly with performance not up to their expectation. They found it quite challenging to shave when the weather was humid, it didn't give them the feeling of a wet shave. Also took quite some time to get adjusted to the new mode of shaving. The expectations of the Indian men with respect to shaving were different from what the product offered. Braun being the other competitor also faced similar challenges.

As I traversed the world and got a chance to interact with teams from other markets, I came across other products, e.g., Facial cleanser and Rice cooker. These were fantastic innovations and did well in some of the markets and not so well in others.  

The Philips business had a vast range of products, and it was not easy to manage the portfolio. Our products were good innovations and addressed the needs of consumers/customers of specific countries or consumers. In the early years of my career, I had the fortune of working with a fantastic team who worked very hard to get these products onto the market. Looking back now I believe that despite all the effort, the global products launched with minimal longterm marketing support were either too early for their times or were not able to meet the local consumer needs and deliver the value consumers were expecting at that point in time. The takeaway for me personally is the necessity of getting a deeper understanding of the consumer needs that can provide them with the needed value. Additionally supported by sustained investments over the mid and long run to make the launch successful.   

One can always debate what the best way is to launch a product: launch it based on your initial understanding and then iterate as you move forward or understand the deeper needs right from the beginning and only then move forward with the launch. There is no one approach that fits all and it varies from industry to industry. However, for any innovation to succeed, addressing the core consumer need and providing the expected value is crucial. Successful companies try to quickly learn from this and make course corrections. 

“If the marketer does a good job of identifying consumer needs, developing appropriate products, and pricing, distributing, and promoting them effectively, these goods will sell very easily.” - Philip Kotler

Today, Philips Personal Health, India market team has achieved very good success in the men's grooming category. Over time, the market landscape has changed, the teams gathered deeper insights into the prevailing grooming and shaving needs of consumers and delivered solutions/innovations to address these core needs. The new range includes a slew of innovations like #OneBlade – a tool that can shape, trim, and shave, face shavers, beard trimmers and grooming kits, hair clippers, body groomers, face skin, and GroomTribe, a shaving and styling app. This has helped the organization make good inroads and generate sizable revenue.  

Philips Domestic Appliances (now #Versuni) addressed the Asia market, a large rice-eating market, by understanding consumer needs better and launching a complete range of rice cookers, which have been immensely successful in the markets. The focus on addressing local consumer needs continued in the #mixergrinder category, i.e., an India-specific food processor and the company has seen immense success for nearly three decades. In the last decade, the opening of coffee chains like Café Coffee Day, Starbucks, Barista Café, Indian Coffee House, etc. has brought a shift in the coffee drinking culture in markets like India. Consumers are now aware of various new types of coffee and coffee-making machines like pod and home espresso machines. With the booming coffee business, I believe we will see companies launching successful innovations that address local consumer needs. 

During my role in product and business management, as a foundation to address any business challenge, I have relentlessly tried to gain deep insights on the core need of the consumer/customer. One can always debate if Innovation is important or consumer/customer needs, my learnings over last two and half decades point towards the fact that a balance between them is needed. Immaterial regardless of the industry, be it developing and launching products, solution or service innovations, identifying core consumer need always leads the way. This is balanced by equally addressing the needs in an innovative way to ensure success.  

To sum up few key elements to success that I have come across are gaining deep insights into local consumer needs, understanding the culture and market landscape, building a relevant go to market strategy, ensuring resources are sustained to promote, learning from success, failures and implementing speedy changes. These bring rich dividends in the mid and long run for the organizations. More importantly, by addressing these elements we can deliver value to our consumers. 

In the age of start-up and technology overdrive, the famous quote of #philipkotler continues to resonate.

Cheers!

Vish

#consumerinsights #customerneeds #innovations #culture #consumerneeds #marketingstrategy #changemanagement #mixergrinder #grooming #shaving

These are my personal views and opinions and not associated with my employer or any other reference in this post. I am also not endorsing any company or service mentioned on this post

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