India’s homegrown innovation culture has the potential to become a globally relevant business methodology.

In our previous post, we discussed how Elon Musk’s approach to product design embodies classic frugal engineering principles. Of course, frugal engineering is not an idea often associated with Western markets. The exact constraints that gave rise to products such as the Tata Nano car generally don’t apply in developed economies. In a “first-world” context, and with a market cap of around US$27 billion, why would Tesla chase frugal solutions?

The answer is that such solutions are fertile soil for disruption, as Musk demonstrated when his company PayPal made a complacent banking industry sit up and take notice. Disruptive innovators across the globe face challenges analogous to the rigors of the Indian market, where companies are working against very harsh resource and demand constraints. The logic of a low cost airline like Southwest as well as “hard discounters” like Aldi are not very distant from frugal engineering thinking.  Would-be innovators, start-ups and incumbents alike, would do well to look closely at the frugal engineering practices emerging in markets like India, because these ideas have legs that can carry them a long way, if adapted creatively.

In our book India Inside, we argued that India may be missing a trick because a lot of innovation today by globally branded MNCs embeds Indian involvement somewhere or other in its value chain, but this is invisible to end consumers. Intel is able, through its “Intel Inside” branding to signal its critical contributions to the products it embeds (in fact, a play on the same idea gave us the title for our book).

The Next Six Sigma?

We also argued, and believe even more strongly today that frugal engineering has the potential to go from forming a part of “must know” practices for MNCs entering emerging markets, to a full-fledged methodology for business improvement à la Six Sigma, Total Quality Management or Zero-Based Budgeting.

Let’s be clear: we are not talking about cute stories of people using washing machines in roadside restaurants to make beverages or hooking up their water pumps to bullock carts to develop a new mode of motorised (well, sort of) transportation. Colloquially, North Indians use the term “Jugaad” to describe such improvised quick fixes or repurposing of solutions from other domains, in response to constraints. Frugal engineering is different: it is a systematic approach to changing the constraints by reframing the problem.  It’s the difference between “making do” and “doing more with less”.

For instance, when Ratan Tata and more recently Carlos Ghosn set an extraordinarily low price target for a car for the Indian market, this meant their engineers couldn’t  try to make an existing model cheaper, they had to start from scratch by challenging all current methods of car production to achieve the price. Not only have their efforts changed the market, they have also changed how automakers around the world approach car design.

To us, no country is better qualified than India to introduce frugal engineering principles to the world and to take the lead in refining it and disseminating it globally. This is because it is a crucible in which many of the key ingredients for frugal innovation — low purchasing power, deep technical talent, aspiring global firms, and demanding customers — all come together. This is where the Indian government can play a crucial role.

What India’s policy makers can do…

Indian Prime Minister Narendra Modi has repeatedly said he aspires to make India a global innovation leader. He has made promoting entrepreneurship and skill development a priority for his new government, and has also appointed a minister for entrepreneurship. Perhaps one of the first orders of business for these new initiatives should be tapping into frugal engineering as a linchpin of India’s homegrown innovation culture.

The government can play a critical role in creating a set of standards, a body of knowledge, and a community of practitioners around the concept. Institutes to encourage research and training in codified frugal-engineering practices could be set up, possibly within existing educational establishments. Perhaps it is time for Indian universities to investigate offering master’s degree programmes in frugal engineering and related design thinking disciplines. These graduates would be uniquely fitted to be evangelists for this revolutionary method within global companies.

Organisations that master this way of thinking — whether you choose to call it frugal engineering or “first principles” thinking — could be well-equipped to handle a world of disruptive innovation. The question is: Will “India Inc.” step up and brand it?

Written by Phanish Puranam, The Roland Berger Chaired Professor of Strategy & Organisation Design, INSEAD, and Nirmalya Kumar, Member, Group Executive Council, Tata Sons and Distinguished Fellow, INSEAD Emerging Markets Institute.

Source:INSEAD

When it comes to taking a risk on a new product purchase, why do consumers choose one product over another? What needs and desires drive new product purchasing, and which attributes are most influential in the path to purchase?

Nielsen’s Global New Product Innovation Survey polled 30,000 online respondents across 60 countries to gauge consumer sentiment about these questions. While new product selection depends on many things, such as life stage, family dynamics and personal choice, macro trends emerged with regards to products that appeal to our heart and our health suggesting there is a gap between what consumers say they are buying and what they wish they could buy if it were available.

While you’d be hard-pressed to find a consumer who said he or she didn’t care about the environment, when it comes to purchasing new eco-friendly products, words and deeds often part ways. Only 10% of global respondents say they purchased a new product because it was from a brand that cares about the environment. Even fewer (7%) cite corporate social responsibility as a reason for making a new product purchase.

But insincerity may not be driving this gap. In fact, product availability, or rather, unavailability may be partly to blame. Twenty-six percent of global respondents say they wish more ecologically friendly products were available, and 16% wish more products were committed to positive social impact—a 16- and nine-percentage-point gap, respectively, from those who say they purchased a product because of its environmental or social benefits.

“There are a number of barriers to more widespread usage and acceptance of environmentally and socially conscious products, including a perception of higher prices and poor performance along with distrust in sustainability claims,” said Rob Wengel, senior vice president and managing director of Nielsen Innovation in the U.S. “But perhaps even more telling is that consumers are just not finding the ecological products they desire. In many categories, green or socially responsible options don’t exist, are difficult to find or consumers simply don’t know about them. Better product labeling, shelf placement and promotion tactics that encourage trial can go a long way in closing the gap between desire and availability. To ensure consumers are not turned off at the shelf, brands must strike the right balance between ecological and effectiveness claims, testing and optimizing claims and packaging before going to market.”

A HEALTHY OPPORTUNITY

The world is facing a global health crisis—nearly 30% of the global population was considered overweight or obese according to the 2013 Global Burden of Disease Study—and consumers are attempting to take charge of their health. Nearly half (49%) of global respondents in Nielsen’s recent Global Health & Wellness Survey consider themselves overweight, and a similar percentage (50%) is actively trying to lose weight. And they’re looking for help from food and beverage manufacturers to make healthier choices.

On the list of new products consumers can’t find in stores but wish they could, healthy options are second behind affordability in all regions but one. North America was the only outlier; in this region, products made from natural ingredients and those fitting a healthy lifestyle are listed after affordability, novelty and convenience-based products.

“The healthy eating space holds great potential, but manufacturers looking to establish or expand their presence in this area should start by looking at what they can remove from foods rather than what they can add,” said Johan Sjöstrand, senior vice president and managing director of Nielsen Innovation in Europe. “Consumers want to go ‘back-to-basics’ with fresh, natural and minimally-processed options.”

“Stated simply, manufacturers need to make it easy for consumers to eat healthier,” continued Sjöstrand. “Consumption habits are changing for time-crunched consumers who increasingly forgo the traditional three meals a day and eat when it best fits their schedule, which is often on the go. But for many consumers, it’s not enough to be convenient; products must also be healthy and nutritious.”

ABOUT THE NIELSEN GLOBAL SURVEY

The Nielsen Global New Product Innovation Survey was conducted between Feb. 23 - March 13, 2015, and polled more than 30,000 consumers in 60 countries throughout Asia-Pacific, Europe, Latin America, the Middle East, Africa and North America. For the purposes of this study, we defined a new product as any item a consumer has never purchased before. The sample has quotas based on age and sex for each country based on its Internet users and is weighted to be representative of Internet consumers. It has a margin of error of ±0.6%. This Nielsen survey is based only on the behavior of respondents with online access. Internet penetration rates vary by country. Nielsen uses a minimum reporting standard of 60% Internet penetration or an online population of 10 million for survey inclusion. The Nielsen Global Survey, which includes the Global Consumer Confidence Index, was established in 2005.

Source: Nielsen

Grocery stores are evolving, both in-store and online, giving consumers more shopping choices than ever before. As a result, protecting and building store loyalty is no easy task. To keep customers coming back for more, you need to know what drives them to switch from one store to another.

A recent Nielsen global survey of 30,000 online respondents in 60 countries shows that price is the top driver of store switching behavior—and by a wide margin. Globally, 68% say price, followed by product quality (55%) are store-switching motivators. Convenience (46%) and special promotions (45%) are drivers for nearly half of respondents, while cleanliness (39%) and selection/assortment (36%) are reasons for four-in-10. Store staff is a factor for just over one-quarter (27%) of respondents.

In North America, Europe and Latin America, price is a particularly important motivator in relation to the other drivers. More than seven-in-10 North American respondents (72%) say prices drive them to switch stores, 27 percentage points (pp) above the second most cited attribute, convenience (45%). There is also a double-digit gap between price and the next most important driver, quality, in both Europe (70% for price vs. 49% for quality) and Latin America (77% for price vs. 61% for quality).

In Asia-Pacific, price is the top driver of store switching, but it’s below the global average (63% vs. 68% globally) and is only narrowly more important than the second most cited driver—product quality (59%). Convenience (54%) and special promotions (49%) both exceed the global average (46% and 45%, respectively) in the region.

In Europe, selection/assortment exceeds the global average in both absolute (the percentage who said it drives switching) and relative (in relation to the other drivers) importance. It is the third most important driver in Europe, cited by 43% of respondents, while it is sixth globally (cited by 36%).

In Africa/Middle East, cleanliness is higher in both absolute and relative importance; half of respondents in the region say cleanliness drives them to switch stores, compared with 39% around the world. Convenience, on the other hand, is less important in the region than globally. Just over one-third of respondents in Africa/Middle East (34%) say convenience drives them to switch stores, while 46% global respondents cite this attribute.

Latin America exceeds the global average for nearly all store-switching attributes. The exception: convenience, which is the third most cited driver globally, falls to the bottom of the list in this region. Just over one-quarter of Latin American respondents (28%) say convenience drives them to switch stores, compared with 46% of global respondents. Staff, on the other hand, is notably more important in this region than globally. Forty-four percent of Latin American respondents said staff would drive them to switch stores. In a culture that highly values relationships and connections with those around them, friendly faces at their place of shopping is of great importance.

The report also discusses:

The product categories best positioned for e-commerce success.

The generational age groups driving online grocery sales intentions.

The technology-based convenience options most used, both in-store and out.

Source:Nielsen

MEC Singapore Ramps up Digital Offering with a String of New Hires

MEC, a leading media agency www.mecglobal.com, has announced a series of new digital hires in Singapore to fuel the agency’s digital and data acceleration.

Amy Dabbs joins MEC Singapore as its new Head of Digital, adding to a string of senior and specialist hires that started earlier this year with Kunal Robert joining as Digital Director and Joshua Campanella joining as Associate Digital Director.

Sharon Soh, Managing Director of MEC Singapore said “The current Singapore team and our clients are already very digitally savvy so it’s natural that we want to accelerate our growth in this area.  With Amy, Kunal and Joshua on board, we have made a huge investment in our future and our clients’ futures, with genuine, proven talent leading our digital development charge. I’m excited to have them on board and look forward to creating a thriving, digital culture at MEC.”

Sunfeast Dark Fantasy, the premium biscuit brand launched by ITC in 2005, has been very successful in carving out a niche for itself at the top end of the market.

The brand has over the years become the gold standard that competition is forever trying to match and has expanded its offering to include variants like Dark Fantasy Choco Fills, Dark Fantasy Choco Meltz, and Dark Fantasy Luxuria.

Over the years, the brand has pegged itself as the ultimate in indulgence - just one bite is all it takes to get transported into the world of Dark Fantasy – making every biscuit a doorway to a truly memorable experience.

The latest communication from the brand tailors this promise to suit Crème Biscuits, a format that is intrinsically associated with one’s childhood. Conceptualized by FCB Ulka Bangalore, the film revolves around a young man who encounters the brand in the lobby of a luxury hotel. Just one bite of Sunfeast Dark Fantasy Crème Biscuit is all it takes to bring out the child in him, inspiring him to hop on to a bellhop trolley and ride it around the lobby, much to the amusement of the people around him.

Dennis Koshy, Vice President–Bangalore, FCB Ulka, has this to say: “Crème Biscuits are part and parcel of one’s growing up years. Even as adults we have fond memories of splitting them open, licking the cream etc. This coupled with the fact that every adult has an inner child waiting to burst out, gave us a unique platform to anchor the brand to”.

Dharmesh Shah, Creative Director–Bangalore, FCB Ulka, adds: “Crème biscuits are primarily targeted at kids. However, Dark Fantasy is an adult brand. The new film straddles the sweet spot, appealing to the child in every adult, thereby keeping the brand codes intact.”

Sunfeast Dark Fantasy Crème Biscuits are available in two variants – Choco Crème and Vanilla Crème, and comes in an all new premium packaging.

Credits:

Client: ITC Foods

Brand: Sunfeast Dark Fantasy Crème Biscuits

Agency: FCB Ulka, Bangalore

Creative Team - Dharmesh Shah, Rama Krishnan, Supreeth Nagaraja

Servicing Team - Vignesh Babu, Priyank Vaghela & Shreyas Upadhya

Account Planning – Menaka Menon

Agency Producers – Alpa Jobalia, Mazhar khan

Director: Zap (Gingerwater Films)