2014 Summitry Capabilities Presentation - Innovation Thru Product Portfolo Optimization
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This document provides an overview of Summitry Worldwide's capabilities in product portfolio management and innovation consulting. Summitry focuses on optimization and innovation of clients' product portfolios through state-of-the-art decision systems like Honeycomb, Oasis, Echo, and Eureka. Honeycomb provides a structured framework to understand consumers. Oasis optimizes marketing spending. Echo integrates analytical and creative thinking for new concepts. Eureka simulates new products to evaluate commercial potential. Summitry has worked with major companies for 30 years. Their systems and insights have helped clients like Kraft Foods, Revlon, Pillsbury, and Ford develop growth strategies and optimize portfolios.
2014 Summitry Capabilities Presentation - Innovation Thru Product Portfolo Optimization
- 1. Capabilities Presentation summitryworldwide.com M a r c h 2 6 t h , 2 0 1 4
- 3. To provide unparalleled strategic insights that enable our partners to optimally manage their product portfolio, while maintaining the highest degree of integrity, transparency and actionability.â â Our Vision
- 4. How Does Product Portfolio Management Work? It focuses on 2 critical areas 01 02
- 5. Product Portfolio Management A leading global authority in Product Portfolio Management for 30 years focusing on the Optimization and Innovation of your portfolio. Our State of the art integrated decision systems with proven market place result, provide the foundation of superior Summitry service vis-a-vis all other competitions. Strategy Consultation Creative Exploration/Analytical Assessment New Product Simulations Spending Optimization Attitudinal Structures Usage Domains Purchase Hierarchy Social Media Toolset Syndicated Services Consumer Insights Management Consulting Product Portfolio Optimization
- 6. Some Of Our High-Caliber Clients Food & Beverage Spirits Pharma/ Chemical Finance Fashion Health & Beauty Auto
- 7. Top Executives Endorse Summitry âSummitry has supported my executive decision-making by providing insights that have led to incremental growth strategies.â - Jim Kilts, Former CEO of Kraft Foods, Nabisco and Gillette âYour recommendations are consistent with most of the strategies we are currently executing and also gives us new directions to compete more effectively.â - Kathy Dwyer, President of Revlon "Very much impressed by your business insights and bold strategic recommendationsâ - Rick Lenny, President of Pillsbury/ Hershey Impressive presentation on our strategies.â - Morris Perlis, Division President , American Express âThank you for your fine presentation last week. We are hard at work, incorporating your findings into our strategic plan.â John Tait, Chairman and CEO, Penn Mutual Life Insurance âThanks for your excellent presentation last Friday. I do believe that the structure work is going to have a major impact on how we think about the business. Keep up the good work.â - Stephen Sadove, President, Clairol "Summitry brought new tools, techniques and innovative thinking process to optimally manage our portfolio of vehicle brandsâ. - Art Redmond, Director - Global Consumer Insight Ford Motor Company
- 8. Portfolio Management Structure HONEYCOMBsm Our Decision Systems Are Designed To Optimize the Portfolio + Discover Breakthrough Innovation OPTIMIZATION OASIS sm Optimize Marketing Spending/ Pricing INNOVATION ECHOsm Analytical- Creative Mind Integration EUREKAsm New Product Simulations/ Optimizations
- 9. 02 Critical Area #1 - OPTIMIZATION 01
- 11. Portfolio Management Structure HONEYCOMBsm ECHOsm Analytical- Creative Mind Integration EUREKAsm New Product Simulations/ Optimizations INNOVATION OASISsm Optimize Marketing Spending/ Pricing OPTIMIZATION
- 12. The Honeycombsm Portfolio Management Structure provides a deep insight into consumer mind from various vantage points that assists with⊠Where does HONEYCOMB sm help? HONEYCOMBsm Portfolio Management Structure Brand Positioning Competitive Analysis Portfolio Management Equity Extension NPD + Innovation Strategic Planning
- 13. What does HONEYCOMB sm provide? An integrated and holistic view of the product portfolio (5WâS â WHAT, WHEN, WHERE, WHY, WHO) that is consumer-centric that can be used as a Front-End Innovation Platform CONSUMERS Hierarchical Purchase Structure (What) Usage Domains (When, Where) Need States (Why) Functional/ Emotional Product Benefits Brand Personality & Values/ Ideals Consumer Segmentation (Who) 01 02 03 04
- 14. How Does Honeycombsm Link To Innovation? Innovation-2 will source its volume from other brands of Casual. Would require separate positioning from the current brand of CasualâŠ. Moderate volume/ profit potential, moderate critical, introductory spending requirements Innovation-3 will source its volume from Varieties of the parent brand; highly cannibalistic. If itâs âeffectivenessâ is above compared to the current Varieties of Brand- B, it would source incremental volume from other brands of Casual. Would not require separate positioning from the current brand of Casual, and very little incremental spending (reallocate from current) Innovation-1 âpartitionsâ the market. Will have the highest volume/ profit potential.. Broadest sphere of influence (the entire market).. Least cannibalistic⊠Require most critical introductory spending and separate positioning BRAND A BRAND B Innovation 2 VARIETY 1 VARIETY 2 VARIETY 3 Innovation 3 DressyCasual MARKET Innovation 1
- 15. Need States/ Benefit Mapping AppearanceEmotional âą Special for perm hair âą Hairdresser suggested âą For special situation âą More exciting look âą Hair to look darker âą Look like someone else Special Problem âą Needed Change âą Have fun with hair âą More dramatic look âą More exciting look âą Express Individuality âą Look sexier Self Expression âą Feel good about self âą Look/feel attractive âą Feel appealing to âą husband/boy friend âą Wanted to feel younger Look/Feel Better âą H.C. for my age âą Wanted natural results âą Cover my gray âą Revive natural haircolor Natural Gray Coverage âą Eliminate drab look âą Subtle highlight3 âą Give me a lift âą Add tones âą Look Lighter Color Enhancement âą Hair to look shiny âą Hair in good condition âą Hair to feel soft âą Natural conditioning product Conditioning
- 16. Sophisticated Elegance Innovative/ Revolutionary Ideal Cosmetic Brand Current Revlon Traditional Pre Revlon Fresh & Natural Concerned About Aging Ideal Skin Care Brand Sexy Trendsetter LâOreal Glamorous Professional Fashion Leader Brand Personality Mapping
- 17. Segmentation is THE PROCESS OF DIVIDING PEOPLE INTO GROUPS (segments) so that People within the same group are alikeâŠin ways that matter to the clientâs business and react differently to different marketing stimuli There are many ways to segment a market : WHAT? WHO? WHERE? WHEN? âą Category Usage âą Brand Usage âą Demographics âą Life stage âą Psychographics âą Use of different channels âą Geography âą Situational Context âą Time of Consumption MOST ACTIONABLE WHY? âą Attitudes /Needs Attitudes & Needs Consumer Segmentation
- 18. Segmenting Customers Drives focus Efforts before Segmentation F CUS Efforts After Segmentation Target/s Segment 2 Segment 3 Marketing Execution PRIZM Targeting Consumer Segmentation
- 19. CategorySize(MM$) $ Share Of the Category (%) Large Category/ Large Share âFranchise Protection Strategyâ Large Category/ Small Share âShare Growth Strategyâ` Small Category/: Small Share âMilk The Brandâ Small Category/: Large Share âCategory Growth Strategyâ $-Sales Overlay â Strategic Thrust
- 20. Integrated Deliverables (sample) When Used Where Used Who Used How Used Doing What Category-Level âą How long ago? âą What category purchased? âą Who purchased? âą Where purchased? âą Impulse vs. Planned General Usage âą Ever Used? Last Year? 3 Months? 1 Month? Barrier To Use âą If Never/Not Used in Last Year Why? Demo Attitudes Geography Share of Wallet Media Behavior Need States âą 20-25 attributes âą Importance vs. Delivery Categories of Interest âą How long ago? âą What purchased (Brand) âą Who purchased? âą Where purchased? âą Impulse vs. Planned Benefits âą 20-25 attributes âą Importance vs. Delivery Brand Personality âą 10-15 personas âą Actual vs. Ideal USAGE DOMAIN PURCHASE STRUCTURE ATTITUDINAL SEGMENTATION $ Sales Overlay
- 21. Portfolio Management Structure HONEYCOMBsm OPTIMIZATION OASISsm Optimize Marketing Spending/ Pricing INNOVATION ECHOsm Analytical- Creative Mind Integration EUREKAsm New Product Simulations/ Optimizations
- 23. OPTIMIZATION Given Element (e.g.; Media) Brand Marketing Mix Portfolio of Brands Portfolio of Brands across Regions and Marketing Elements Brand B Brand A OASIS sm â Optimum A&P Budget Allocation * Spending is allocated between âCommunication Dollarsâ and âPrice Reduction Dollarsâ
- 24. What Does EUREKA sm Deliver? 01 02 03 âą Share maximization in high franchise area to maintain competitive leverage with trade âą Profit maximization in medium franchise, since no competitive threat âą Attain share objective in the low franchise area to avoid erosion due to distribution loss âą Are we allocated optimally by season? Leveraging for contra-seasonal spending âą Profit maximization in a declining market âą Share maximization in growth market; to leverage trade âą Should we increase the budget, to increase share and to participate in the category growth? âą Are we allocating the right amount for each brand? Should we decrease the spending on one brand and reallocate to other brands? âą Are we allocating the right amount for advertising versus promotion on each brand? âą Are we allocating the right amount by franchise areas (high, medium, low)? Can we significantly increase share in the medium franchise area with a small increase in spending/ Should we reallocate from high franchise to medium franchise? âą If competitor increases advertising or promotion, how do we react? What impact does it have on our portfolio? How much should we counter spend? âą If a competitor launches a new product, what effect does it have on our revenue/ volume potential? Alignment to Management Objectives Optimize Marketing Spend Competitive Gaming
- 25. 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 Volume 58456 83272 86531 87861 88584 89037 89351 89579 89753 89891 90000 Marketing margin 69918 92876 87204 78971 69931 60533 50950 41252 31483 21666 11812 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 0 10000 20000 30000 40000 50000 60000 70000 80000 90000 100000 MarketingMargin Volume Communication $ (000âs $) Communication Spending Profile (Unit=000) Volume Marketing margin Sample Output - Communication Spending Profile Communication Price reduction Net retail price Volume Marketing margin $274 MM $7.7 MM $1.81 87.5 MM $81.1 MM Brandâs profit max is at $10 MM in communication spending Needs the planned investment spending of $18mm level in the introductory year In following year, the communication spending cut to $10-$12mm
- 26. 01 02 Critical Area #2 - Innovation
- 27. Traditional Approach To Innovation Approved Business Case and Assigned an expanded development term Release Readiness Process Customer Realization of Value Concept Testing Result determine next steps for the concept Based on idea Testing, the top candidate (s) are advanced New Product Ideas Product Concepts Experience Testing Early Adopters
- 28. NEW PRODUCT SIMULATIONSEUREKA How Does our Innovation Process Work? HONEYCOMB PORTFOLIO MANAGEMENT STRUCTURE NPD + Innovation Platform ECHO Creative + Analytical Exploration Approved Business Case and Assigned an expanded development Term Release Readiness Process Customer Realization of Value Concept Testing Result determine next steps for the concept Based on idea Testing, the top candidate (s) are advanced Product Concepts New Product Ideas Experience Testing Early Adopters
- 29. Our Decision Systems Are Designed To Discover Breakthrough Innovation and weed-out potential failures Portfolio Management Structure HONEYCOMBsm INNOVATION ECHOsm Analytical- Creative Mind Integration EUREKAsm New Product Simulations/ Optimizations OPTIMIZATION OASISsm Optimize Marketing Spending/ Pricing
- 31. Portfolio Management Structure HONEYCOMBsm OPTIMIZATION OASISsm Optimize Marketing Spending/ Pricing INNOVATION ECHOsm Analytical- Creative Mind Integration EUREKAsm New Product Simulations/ Optimizations
- 32. ECHO sm â Creative & Analytical Integration ECHOSM incorporates processes and analytical tools for Exploration and Creation of ideas combined with analytical screening tools that use Hard-nosed judgment and Optimize your concept/ product to realize its maximum revenue potential Explore Create Hard-Nosed Judgment Optimize Test and Identify Winning Concept
- 33. How Does ECHO sm Work? Explore Create Hard- Nose Judgment Test with Blog Nog Optimize 01 Step 02 Step 03 Step 04 Step 05 Step SESSIONS CONSTRUCTED BY CATEGORY Consists of 2-Day On-Site Workshop beginning with deep-dive/ exploration into foundational work completed in HONEYCOMBsm Workshop is co- facilitated with one of our strategic partners (Agency Background) and consists of 3 cross- functional teams (Marketing, CMI, Analytics, R & D, Sales, Innovation, Finance) Objective is to identify: âą Where we want to play (level in structure) given direct competitive sets, marketing constraints + strategic objectives âą Development of creative ideas that will play in the âspaceâ âą Screen, evaluate and select best potential ideas âą Rough creation of concept â Insight, Benefit, RTB âą Test winning concepts using real-time Blog Nog toolset (this is done after the workshop and takes 1 week for results) âą Identify the best concept -- > which can be fed into EUREKAsm New Product Simulation Tool
- 35. Portfolio Management Structure HONEYCOMBsm INNOVATION ECHOsm Analytical- Creative Mind Integration EUREKAsm New Product Simulations/ Optimizations OPTIMIZATION OASISsm Optimize Marketing Spending/ Pricing
- 36. EUREKA sm â New Product Assessment Volume & Profit Potential Position in Structure/ Domains Product/Concept Communication âEffectivenessâ Advertising/ Pricing Distribution Support Critical Introductory Advertising Minimum Introductory Spending Under-spending cause Irreversible damage One Chance to be New. Use it or lose it Determined by Volume potential Impact of Marketing Force Advertising Spending Pricing/ Promotion Distribution/ Channels Cannibalization of our franchise EUREKASM New product Simulation/ Assessment
- 37. What Does EUREKA sm Deliver? 01 02 03 04 Business proposition for a product based on its position in the structure and its relative effectiveness âą Critical (minimum introductory advertising to attain potential share/volume) advertising support âą Impact of levels of advertising, pricing, distribution on volume and profit Business proposition for different positions in the structure and varying levels of effectiveness Derivation of effectiveness based on Concept/ Product tests, Benefit bundle delivery, Communication Effectiveness, Management judgment Business proposition for a product competing in multiple domains
- 38. Simulating Different Positions In A Single Domain Single domains, potential for different position in structure Evaluate potential for different position on the structure. Each position would yield very different business propositions. Volume potential for X1 â âPremium partitioningâ is twenty times higher than X4 â line Extension. Value Mainstream Chocolate X1 -Premium X4 X2 X3
- 39. Simulating Entry Into Multiple Domains Effectiveness of âX1â likely to be different in Breakfast domain vs. Snack domain. Also, it may require separate domain-specific support to maximize its leverage Breakfast Prepared Meal Snack RTE Meal Sweet Savoury Bread Group Wholesome X1 X1 Wholesome
- 40. Discovering White Space Helped to revitalize Revlon based on the âbrand personalityâ study to reposition the brand with a really edgy âRevolutionary Campaignâ. âNatural Lookâ was delineated as an emerging need state. Conjoint analyses showed leverage for âLow ammonia/ Low peroxideâ. Two elements combined to create Natural Instinct. Management wanted to explore an introduction of Old-fashioned lemonade in the powdered mix form. Survey Research argued vehemently against this idea, âPSDM is for the kids, and a whole family product cannot be introduced successfully in PSDM. We explained, based on the Purchase Structure (Brand-structured market, with Mixed Mode on form), âSuch a constraint does not existâŠthe reason why PSDM seems like kids market is because the current brands (KA, FF) are positioned to kids.â CEO Jim Kilts introduced Country Time, a highly successful Lemonade brand in the PSDM.
- 41. Discovering White Space Based on Portfolio Management Structure, Summitry recommended Mercury brand should be dropped due to its overlap with Ford and Lincoln brands â did not have clear reason-for-being. This was lack of âWhite Spaceâ. Developed beverage structures and simulations in more than 15 countries to help KFI maximize leverage in the beverage market. BCG had concluded that Tang is a âCash Cowâ brand and should be milked for profit. We changed the entire perspective, and helped the global roll out.. Resulting in $1 billion brand. The Penn Mutual product portfolio of Life Insurance, Annuity and Retirement was targeted to less desirable/ profitable targets (âUnassuming blue collar femaleâ, âCareful senior citizenâ, âSafety seeking mainstreamâ) and only one profitable target (âSingle source educated coupleâ). Summitry designed strategies to focus to âSingle source educated coupleâ target with increased marketing force and expand to profitable and vulnerable target (âUnsophisticated responsible parentsâ) with current products/ capabilities. In second phase, appeal to âSingle source female yuppieâ with new channel (e.g., bank). The most desirable target (âSophisticated Investorâ) would require new capabilities and product offerings.
- 42. President/ Founder/ Chief Executive Officer SVP. Strategy & Innovation Senior Analyst, Consumer Insights Manager of Insights & Analytics Group Niroo Kamdar Asim Kamdar Yao Lu Swanson Amanda Ferguson Core Project Team Senior Analyst, Consumer Insights Bill Ortman Senior Analyst, Marketing Analytics Ray Liu
- 43. Over 40 yrs. experience in Strategic Analytics, Considered the Inventor of Product Portfolio Optimization. BSC in Chemical Engineering, University of Missouri MBA in Industrial Management, University of Missouri Niroo is recognized as the global leader and pioneer of Product Portfolio Optimization. He is a rare breed to excel in analytics, innovations and communication. As a head of WW Forecasting and Planning at Kraft General Foods, he took Hendry models, which were in their infancy to state-of-the-art decision systems. Then, in 1985 he founded Summitry. He was successful from the inception and acquired high caliber clients and praise in diverse industries. In 2002, he was a Finalist for the prestigious Ernst & Young âEntrepreneur of the Yearâ In 2013, he was a Finalist for the Next Gen MR âDisruptive Innovationâ Award Niroo Kamdar President/ Founder/ Chief Executive Officer
- 44. 18 years Global Research and Analytic experience across different sector/ industries. B.B.A. in Finance/ Economics, The George Washington University M.B.A. in Marketing/ Finance, The George Washington University Asim has 19 years of hands-on research, analytic and strategy experience, including strong expertise across a variety of sectors and industries. Worked at Accenture, Capital One, Nabisco in strategic insights and analytic-driven roles. Most recently, Asim oversaw WW Consumer Insights and Analytics for Transitions Optical. Asim has completed hundreds of primary studies in the areas of: market structure landscapes, consumer segmentations, new product testing, TV testing, UX testing, brand tracking, need state/ benefit analysis, IDDEA modelling, web analytics, sales forecasting, market mix modelling and shopper insights. Asim Kamdar SVP, Strategy & Innovation
- 45. Analytics Professional BS in Marketing/ Statistics, University of Tennessee Master of Market Research (MMR), University of Georgia She comes to Summitry from the highly prestigious Terry School of Business where she has recently graduated with her MMR. Amandaâs expertise lie in quantitative research and data analytics. She has completed extensive project work focusing on the so what and now what of insights. Chiefly among those is a corporate sponsored project for Ste. Michelle Wine Estates examining how Millennials shop the wine category. She possess skills in questionnaire design, methodology, and quantitative/ qualitative analysis. Her quantitative capabilities include factor analysis, cluster analysis, latent class, correspondence analysis, discriminant analysis, conjoint, discrete choice, and hierarchical bayes to name a few. In addition, she possesses skills in SPSS, SAS, JMP, and NCSS. Amanda Ferguson Manager, Insight & Analytics Group
- 46. Insights Professional and Expert on APAC Region PhD in Marketing, Iowa State University She comes to Summitry from Simpson College in Iowa, where she was an Assistant Professor of Marketing. She taught marketing coursework in the areas of: Consumer Behaviors, Sales and General Marketing Management. Prior to this, Yao worked as an Assistant Brand Manager in Hong Kong for a joint venture between the China Ting Group and Italian Fashion Designer, Caractere. She managed all aspects of branding, advertising, pricing, promotion and distribution. In addition to her strong brand management background, Yao has done extensive work on consumer segmentation, need states, product/ brand positioning and new product development. She is highly skilled in SPSS and R and has practical experience using: cluster/ factor analyses, correspondence mapping, discriminant function analysis and logistic regressions. Yao Lu Swanson Senior Analyst, Consumer Insights
- 47. Analytics Professional B.A. in Marketing, Michigan State University Master of Science in Market Research, Michigan State University Ray Liu Senior Analyst, Marketing Analytics Rayâs research experience spans various sectors. Prior to joining Summitry Worldwide, Ray was a part of the marketing science and solutions team at Millward Brown for 2 years. He has worked on tracking studies, in addition to copy-testing for eBay, Chase, Red Bull, Intel and HP. He is an expert in advanced analytics (MaxDiff, Factor analysis, Regression). He was also involved in a consulting and new solutions development role that assists with research designs. He graduated with a Master of Science in Market Research from Michigan State University.
- 48. Masters in Marketing Research Michigan State University BA in Marketing/International Business Michigan State University An innovative Researcher, William has exceptional analytic expertise working with a multitude of product and service markets. Before Summitry Worldwide William worked with Maritz research in the automotive sector and on various custom projects. His areas of expertise include: consumer segmentation, sales forecasting, product concept testing, brand tracking, and web analytics.William Ortman Senior Analyst, Consumer Insights
- 49. ThankYou w w w . s u m m i t r y w o r l d w i d e . c o m