CASE STUDIES
Actmedia
Need Identification and Product Development
News America
Gap Analysis and Product Development
Greenfield Online
Disrupting an Established Industry
News Corporation
International Evaluation and Validation
ACTMEDIA
Situation:
Actmedia’s CPG clients were interested in delivering secure coupons at the grocery store shelf. At the time, no reliable and secure method to deliver coupons at the shelf and directly in front of a product existed. CPG companies encouraged Actmedia to develop a variation of their other shelf based advertising and promotion products to create a secure and reliable system to deliver manufacturer coupons at the shelf.
Analysis:
Based on the interest of clients, we first researched the marketplace to see what currently existed. We also evaluated total coupon spending to determine market share potential. Additionally, we talked to retailers about their requirements to place a dispenser at the shelf in front of products. We talked to CPG companies about what they would require to meet their expectations. We also conducted consumer research to understand shopper behaviors when presented with coupon availability at the shelf. The analysis provided a sense of the parameters necessary for a successful product and launch.
Evaluation:
Once the success parameters were determined, a cost evaluation was conducted. The question to answer was, “could the dispenser be profitable and meet the company’s financial hurdles”. To develop answers, we assessed the costs to develop a secure and reliable dispensing device, cost to mass manufacture, cost of marketing to promote availability, and the cost to install the units at retail locations. We also, assessed initial pricing thresholds to CPG companies based on competitive alternatives, etc. Also, determined time to breakeven and overall growth potential.
Once all the costs were identified a timeline was created along with resource requirements. The timeline included parallel paths of manufacturing and prototype testing, selling CPG on concept and design prototypes, and selling retailers on CPG interest and design prototypes. By doing all three simultaneously, total development time to achieve revenue was a fraction of normal linear development leading to a much faster launch and ROI.
Outcome:
Product was launched as the Instant Coupon Machine “ICM”. It became the most successful in-store marketing program in the history of the industry. Dispensed over a billion coupons a year (at its peak) saving consumers over half a billion dollars. The product contributed billions of dollars in revenue and hundreds of millions in profit to the company.
NEWS AMERICA
Situation:
CPG advertising and promotion marketing spending was rapidly moving to a retailer centric approach. This was partially driven by the retailers own merchandising and marketing departments creating proprietary programs and pushing CPG companies to participant. Consequently, CPG advertising and promotion spending started to migrate to these new programs . This evolution lead to CPG companies creating Shopper Marketing departments that could respond to this new development. The shopper marketing groups were also tasked with getting in front of this trend of retailers own marketing programs by creating their own unique retailer specific programs. This allowed the CPG companies to better control the spending and ROI while still delivering strong results for the retailers. Unfortunately, News America Marketing saw some of the CPG spending shifting from News America products and services to these retailer programs. Consequently, they wanted to create a universal product that could be customized to each retailer and provide CPG companies with a shopper marketing product and would provide strong ROI and would be easy to implement.
Analysis:
The analysis revolved around asking the question, “could any of the existing base of products be used differently to become a Shopper Marketing solution?”. Could they be delivered differently for each retailer to provide a proprietary approach that could be customized based on each retailers marketing strategy?
Evaluation:
What we learned in the discovery phase is that little coordination took place between a CPG’s sales team and their brand marketing teams. The weakness identified is the sales teams would create a trade deal with the retailer but the marketing departments plan was national and did not necessary provide an overlay to the timing of the trade deal. This was a huge lost opportunity for the CPG companies but one that News America Marketing could solve. The answer was creating a unique Free Standing Insert (FSI) page in the Sunday paper where News America Marketing could advertise a “dead net” price to the consumers that shows a retailer’s specific product discount price minus the attached coupon value for a total savings to the consumer. Since consumers were already looking at the FSI for savings, this extra page simply directed them to a specific retailer.
Outcome:
After much testing and changes to the production and printing of the FSI, a product called Price Feature Plus was created. This was a Free Standing Insert that combined a national couponing program with a trade deal at a specific retailer. It was a unique product in the marketplace and captured the attention of the Shopper Marketing departments and the retailers. It was highly successful and created a new revenue stream for News America Marketing that was incremental to the base business.
GREENFIELD ONLINE
Situation:
The company Greenfield Online, who pioneered on-line consumer research found themselves with an opportunity but not quite sure how best to proceed. Clients were providing feedback that their traditional methods for testing new product concepts was not meeting their marketing department’s needs. It was slow, cumbersome, and often did not produce the kind of insights necessary to make sound decisions. It was also expensive. Money that could have been used for marketing was spent on initial validation. Marketing departments were putting pressure on their internal consumer research groups to find a better solution.
Analysis:
Seeing this as an opportunity to disrupt an industry slow to change, Greenfield On-line believed the internet could be applied to increase speed of results, increase the size of survey panels, and lower the cost. In researching the landscape, it was clear there was opportunity to improve the system. The question was how to overcome the old traditional methods that were ingrained in the research community. It was determined that extensive client interviews, would be necessary to understand all the objections and roadblocks to a successful launch.
Evaluation:
Consequently, based on the initial analysis, extensive interviews and assessments were conducted with end-users which included consumer researchers at top CPG companies as well as their marketing counterparts. What we learned is traditional researchers were reluctant to change for fear of making mistakes and marketers did not want to change without the support of their researchers. These insights lead to a much more focused product development and ultimately a better targeted launch of the service. Knowing who were going to be influencers and who were the decision makers was critical to the team succeeding. Potential clients would have a “show me mentality” that would require a number of tests to prove the efficacy against standard testing methodologies. Through testing with early adopters and through offering senior marketing managers first mover incentives, Greenfield was able to quickly confirm that the results were as accurate (if not better) than the traditional methods of consumer research.
Outcome:
Greenfield Online literally rewrote the book on new product consumer research. Once they won over consumer researchers and started capturing share, other research companies quickly adapted to add online services to their portfolio. However, Greenfield had first mover advantage and was able to secure a leadership position for many years. Today, virtually all consumer research is conducted online and marketers have saved billions of dollars in research time and lengthy product development cycles.
NEWS CORPORATION
Situation:
News Corporation wanted to understand the international marketplace for in-store advertising and promotions. At the time, News America Marketing was the only News Corporation division that did not have an international presence outside of North America. Consequently, they sought a resource that could evaluate the marketplace for News America Marketing and provide a strategy for expansion.
Analysis:
The analysis revolved around deciding to either build, buy or partner their way into the international markets. First stage was to narrow the world to a couple of regions based on a set of criteria that was established at the beginning of the process. Once the regions were determined, a rigorous review process was established for the evaluation phase.
Evaluation:
The evaluation included a number of market visits. The visits included meeting with current companies with established in-store marketing businesses as well as with retailers in those markets. It also included dozens of store visits in each market and interviews with store employees and employees of third party in-store marketing companies that were in the stores servicing advertising programs. Interviews were also conducted with dozens of CPG companies that distribute in those regions. Purpose was to gain their perspective of currently available third party advertising and promotion products and services. As well as determining if certain services and products News Corporation could offer would be of interest and could deliver incremental benefit to what was already available.
Outcome:
The conclusion was that News Corporation would be best served to buy existing services in some markets and a partner in others depending on the specific opportunities. The companies selected were well entrenched in the markets and had strong retail and CPG relationships. On the other hand, News Corporation had resources and innovative products that could have been added to their existing offerings and would significantly increase the value of those businesses.
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