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BW Businessworld

Honey, I Shrunk The Product Cycle

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As the minutes tick away to sunset, there is a sense of urgency at the sprawling Hindustan Unilever (HUL) campus in Mumbai. The consumer goods behemoth, once flayed for being a slow mover, has a new diktat. Before the light fades, every single issue raised during the day must be resolved. A ‘Sunset Portal’ has been set up to speed decisions.

“Eighty per cent of the concerns can be resolved by the line manager — only a few need top management intervention,” says tall and lanky Hemant Bakshi, executive director, home and personal care, HUL. In case the line manager is unable to take a decision, the issue gets escalated from the Sunset Portal all the way up to the top leadership for an instant call. “Quick decision-making is key to crunching marketing time cycles. We always had the scale; now we are adding speed,” says Bakshi. “The trick is to be 90 per cent right, but 100 per cent on time,” he says.

“On time” and “speed” are the new mantras pervading the marketing world. No longer do companies have the luxury of delay in new product development (NPD). Trends are changing so fast that the challenge before the marketer is to catch it, study it, convert it into a product idea and hit stores before the trend changes. Also, get it right, without sacrificing quality.

“Earlier, from the first brief to putting the product in store, we used to take four years. Today, we do it in one year. And we feel this is also too long,” says Ramesh Tainwala, president for Asia-Pacific and Middle East at luggage maker Samsonite. Tainwala, who literally lives out of a suitcase, says the target for Samsonite is to produce new bags in six months. But this is a challenging proposition, he admits.

Marketers today have no choice but to act fast. Competition has increased to such unprecedented levels that if you do not come out with an innovative new product in a flash, others will steal a march. Also, if a rival has come out with a product with a runaway hit feature, your product must have it too. Obsolescence levels have also gone up to the extent that a Samsung Galaxy SII, which looked cutting edge yesterday, looks outdated today when you see the SIII. In the auto industry, a car without a power steering is unthinkable now. What was once a differentiator is a necessity now.

Not surprisingly, companies are now rolling out more products and variants than ever before. As Ajay Kaul, executive director of global brand communications at computer maker Lenovo, points out, the company is producing 200-300 per cent more products today than two years ago. The new four-screen (PC, mobile, tablet, Smart TV) demand from consumers has forced Lenovo to come out with a convertible range. This was showcased at the global tech trade show CES and is now ready to be launched across several markets. Lenovo took less than a year to produce this range.

Shashank Srivastava, executive director (international markets), Maruti Suzuki, says the culture of industry trade shows — where year after year you have to showcase something new to keep your brand’s buzz levels high — is creating another pressure point. This is a launch window no company wants to miss.

Speed with innovation has been the Samsung hallmark. It has had 45 new launches already this year. Its Note series came out of the blue and became a sleeper hit. It even stole a march over Nokia with a faster Windows phone model
This means the chief marketing officer today has to be really agile — executing launch strategies for not just one but multiple products and, at the same time, keeping an eye on external factors such as regulatory changes or competitors, or even tech partners. “If Intel or Microsoft launch ahead of schedule, we have to scramble,” says Lenovo’s Kaul.

“Marketers today have become like fighter pilots, who need to react in micro-seconds. Earlier, we had the luxury of flying Spitfires,” says Vivek Sharma, head of marketing and vice-president for the Indian subcontinent at electronics giant Philips.

Most companies today have two kinds of NPD cycles — long term and short burst. Short-term NPDs not only bring money to the table for the longer gestation products, but also make the company appear contemporary and with it.

Setting The Pace
It is the textile industry that really trail-blazed in cutting cycle time. Zara and H&M set a scorching pace with their quick manufacturing and fast launches — taking barely two weeks from catwalk to retail store. In the process, they spawned a new term ‘Fast Fashion’, and now almost every big apparel brand has to create fresh, new products in next to no time.

Of course, not every industry can clip cycle time in this fashion — aircraft makers, pharma and auto sectors still have a huge lead time — but, even here, marketers have managed to break barriers. One way has been to plan sequels even as the first product is under development. “It’s almost like Gangs Of Wasseypur (the Bollywood flick), where the first and second parts were made simultaneously,” quips Maruti’s Srivastava.

For global players such as Philips, points out Sharma, an additional challenge today is to ensure that new products are launched in every country without a lag. This often poses logistical difficulties to companies that need to tweak a product for different geographies. For instance, at Philips, audio products for India are sound-adjusted for local listening preferences. “But connected customers want a product the minute they read it has been launched,” he says.

Apple took three years to develop its game-changing iPhone, launched in 2007. But subsequent versions have been iterations of the first. It did, however, innovate with Siri, Gorilla Glass and Retina Display
Indeed, look at the frenzy for iPhone5, and the angry comments posted on Twitter and Facebook by Indians unhappy at Apple’s reluctance to make it available here on the day of its US launch. By contrast, Samsung, which launched its Note II device in India this September the same time as its global rollout, scored brownie points. “We pride ourselves on our global supply chain management and this enables us to launch products simultaneously in different markets across the globe,” says Asim Warsi, vice-president (mobile) at Samsung.

Today, consumers are not only extremely impatient, but demanding as well. Says Anil Madhok, managing director, Sarovar Hotels and Resorts: “Earlier, we used to take 48 hours to confirm a booking. Today, customers are not willing to wait even 48 seconds for a reply.”

Given the enormity of such challenges, BW reached out to a host of marketers to see how they were cutting cycle time. What we found was that the process of NPD itself had not changed — the strategising and thinking were same, but it was execution that had hit high velocity. As Pratik Seal, chief marketing officer of gadget maker Micromax, which has stolen marketshare from the biggies thanks to its quick cycle time (phones in just 30-60 days), says: “The rigours of the process are still intact. It is just that development, execution and final delivery has become very fast.”

Though by no means comprehensive, the anecdotal stories from various companies illustrate how marketers are now constantly changing the play to stay in the game.

Quick Decisions, Speedy Execution
Like HUL, everyone BW talked to is speeding up decisions. Tainwala describes how there was a time when the global management at Samsonite would try to take the opinion of everybody over a new product brief. “There would be a few Asians in the room, a few Americans and Europeans — all saying ‘thoda sa aisa kar do, thoda sa vaisa’. We no longer waste time trying to optimise. If the product is going to be for China, only the Chinese head will have a say,” he says.

Today, Samsonite has become nimble, says Tainwala, describing how the luggage maker’s move to abolish its global headquarters has helped add speed. The global management now meets once every two weeks at different destinations — for instance, its last meeting was in Hong Kong; next one is in Europe. This has increased operational costs of the company, but on the plus side, he says, it has brought the company closer to all its markets and consumers. “Since the senior team is flying around all the time, observing how people use their bags, it gives us constant insights.”

Lenovo has crunched the decision-making time by creating a marketing communications command centre in Bangalore, where strategies of over 50 countries are planned. Kaul likens his job to an air traffic controller who orchestrates campaign strategies of marketers around the globe. “We have become a critical function for the global CMO, giving him a single view of how the marketing dollar has been deployed and what results the investments are yielding,” says Kaul. If the data shows that the funds in, say, Brazil, are being unutilised, they are quickly re-deployed to another place. Technology, he says, is enabling faster execution.

And, execution is the key differentiator today. As LG Electronics’ vice-president of marketing L.K. Gupta says, “Earlier, it was 90 per cent about the planning and 10 per cent execution; today, it is 60 per cent planning and 40 per cent execution; going forward, it will become 20 per cent planning and 80 per cent execution.”

But, of course, new products have to start with a good idea and a plan.

Ideas, Insights And Immersions

In every company, compared to the past, more ideas are being generated today. This is thanks to the improved insight-gathering mechanism. Gone are the days when marketers would wait for periodic insights from research firms, and the ideas would occur once in a while. Today, the biggest weapon for the marketer is the 24x7 insights he gathers from consumers personally — by eavesdropping on the Web, meeting customers at home personally, from retail stores, from everywhere.

“At HUL, it is mandatory for marketers to get intimate with their consumers — go out and meet them once a week,” says Bakshi, adding that to get to work on a brand, the HUL staffer has to first earn what they call “a consumer licence”. This licence is given only if 100 hours of face time with consumers is clocked. Every year, this licence has to be renewed. “When the knowledge is resident in you, ideas start coming up spontaneously and quickly,” says Bakshi.
Delays over its platform migration to Windows has cost Nokia heavy. This year, it launched Pureview 808 on a dying platform (Symbian), support for which is ending soon. Techies ask why Nokia could not get the 808’s camera technology on its Windows phones instead
It has been a similar experience for Philips, which recently rolled out a Consumer Passport Programme (CPP). It is compulsory for not just the marketing sales team, but also the corporate staff, and the research and development team at Philips Innovation Campus to take part in this “customer immersion” activity.

Rolled out barely a year ago in India, CPP has resulted in over 1,200 consumer home visits and 200 focus group discussions with consumers, according to Sharma. Once the house visits and focus group discussions were over, a brainstorming workshop was held, aimed at developing insights and propositions. The yield: over 5,000 observations were generated.

“In May 2012, we held a workshop for home decorative lighting, which helped the team build ideas for a television campaign and reduced the time and effort needed to collect insights,” says Sharma.

Across the globe, insights are becoming the most important part of the NPD activity. Jan Chipchase, Frog Design’s executive creative director for global insights, who was earlier Nokia’s creative strategist, travels around the world with a team of ethnographers and photographers. This usability researcher’s modus operandi is to immerse himself in a space — it could be Dharavi one month, Nairobi the next — where people spend a lot of time, observing their daily habits, trying to find where and what the opportunities are.

Closer home, Future Factory, a product design company that receives funding from Godrej & Boyce, does its research much the same way. Geetika Kambli, managing partner of Future Factory, says observing homemakers put away leftovers helped them alter refrigerator designs quickly. They found people were not transferring leftovers into smaller vessels but shoving big utensils into the fridge, blocking off the air circulation coming from ducts at the back. “So we decided to shift the air-to-shelves flow and made it top-down,” she says.

The Crowdsourcing Trick
Many a marketer is now trying the crowdsourcing option to speed up things. As Bobby Pawar, chief creative officer, JWT, points out, you cannot always expect ideas to come on tap. “The way out then is to have more people to ideate. But, to really cut time, you cannot crowdsource with amateurs — you need experienced professionals,” he says.

BlackBerry fans have been waiting and waiting for the promised BlackBerry 10 OS launch. Late-to-market, and flogging an ageing line of phones has put Research In Motion behind the curve
Seal of Micromax disagrees. He points to the punchy new Micromax logo, launched during the Asia Cup this year, which came from crowdsourcing. “The whole process took us just three months. It was cheaper and faster,” he says.

Pizza giant Domino’s has taken the same route in the US with a design contest to help create its new pizza delivery vehicle. It has invited consumers to come up with sketches of delivery vehicles that are more efficient and more appealing to drive.

The Tech Ally
Open source technology has become the marketer’s biggest ally today in cutting cycle time. “About 25 years ago, the research and development departments of companies held that secret formula. But today, technology is not hidden,” says Kambli of Future Factory. But while accessible technology allows you to get products out faster, Kambli says, the flip side is that the competitive advantage vanishes faster. “Today, the whole business model of how technologies and materials are shared has changed,” she says. That said, Kambli explains, innovation today lies in the application of this technology.

According to LG’s Gupta, companies are still devoting more time to create base technology or the core platform of the product. “That lead time has not been shortened too much,” he says. But once you have a solid platform — the compressor in the case of a fridge, the panel for TVs, the operating system for a phone — then you keep constantly tweaking it or build applications around it. “Do not try to reinvent the platform. Instead, read the market by making frequent adjustments,” he says. “Incremental innovation can only buy you small gains. But for a truly differentiated product, you need in-depth R&D time,” says Sharma of Philips.

Co-creating With Consumers
Getting consumers to have a big say in product design helps cut cycle time as well. Just look at the giant consumer labs companies are setting up, be it ITC’s 10,000 sq. ft Laboratoire Naturel in Bangalore or HUL’s Consumer Insight and Innovation Centre (CIIC) in Andheri, Mumbai.

At ITC’s lab, which has a skin and hair evaluation clinic, the company’s R&D team directly interacts with consumers to co-create new products, gets them to sample the products and tweaks them. The CIIC, which recreates a retail environment, has similarly cut time for the FMCG major. Here, HUL gets shopper insights into how consumers look at products, packs, shop layouts, and so on. It simulates India’s unique hybrid retail format — and so there is a simulation of a kirana as well as a supermarket.

Similarly, LG’s multi-million dollar consumer lab in Korea has revolutionised early-stage testing of products. Says Gupta, “A large retail store has been recreated through 3D projectors. Consumers are made to wear glasses that record their eye movement. When they sit down to watch a television programme, areas in the lab evaluate how they are watching it, and record their behaviour.”

Maruti’s Srivastava says trade shows help in early-stage testing as well. “If we show a sports variant of a car at an industry show, we get an instant sense of whether there will be consumer acceptance, what is missing and so on,” he says. Several companies say the advent of modern retail, where customer sampling can be done faster, has again helped cut market testing time.

Supply, Analytics, And More
Business analysis of a new product — how much raw material and packaging material should be used; what should be the proposition and the cost of the product, etc. — has become a lot faster thanks to analytics. HUL’s Bakshi says, “Today, I know the rate of sales by store in colonies and can work out inventories needed to very near approximates.”

Alagu Balaraman, partner and MD, India operations, CGN & Associates, a supply chain management company, says, “In the past, a company may have got the idea right, read the market right, got the positioning right, but where it often failed was in making the product.” One needs to source components from hundreds of suppliers, get it to the factory on time, stitch the product and “then reach it to the channels and millions of retailers”.

Today, says Balaraman, companies have introduced three levels of changes that have helped them speed up. First, they are getting the forecasting right — what is needed, how much, and how much time it will take to get the components to the factory”.
Seen the cheeky new Micromax ‘aunty’ commercial? The campaign was put together by Lowe Lintas in a jiffy to counter Samsung’s ‘uncle’. Tactical advertising has always been quick. JWT’s Bobby Pawar describes how when he was at DDB Mudra, they created a campaign for Big TV in just 36 hours, stealing the thunder from Airtel Digital TV’s teaser launch ads. Such campaigns are easy and quick to do. But, today, what has changed is that even the key brand communication — from product positioning, the media, the packaging to executing it — has speeded up. Marketing communications is where maximum time has been slashed, says L.K. Gupta of LG Electronics. “Digital media allows us to do things on the fly.” Vivek Sharma of Philips points to a Diwali campaign that was executed in just two weeks. This was done thanks to a Communication Concept Lab where, instead of the usual four-city research, consumers were recruited to sit in during the creative process and iterations done in a single day.

Communication has become more open and collaborative between agencies and clients. Earlier, the client wrote the communication brief and the agency planner would rewrite it for its creative department. Today, one person from the agency is present at the client’s office right from seeding of a idea. Pawar says the trick to being quick and yet get it right is in writing the brief well and keeping the concept simple. The key to working fast is to work with those you can rely on, he adds.

The second part is about time versus costs. “In the past, companies in India were obsessed with the cheapest possible components. Today, people realise the value of time and source only from reliable vendors,” says Balaraman. The third level of change, he says, is in the way companies have brought in integration between various internal departments, between their business partners and even with their vendors. “Today, companies are willing to invest in upgrading skills of their vendors and getting that relationship right.”

No great innovator, Micromax excels in reacting to launches by bigger brands. It has consistently aimed for valuefor-money, not snob value, in its positioning
Make Haste Slowly!
All said and done, speed without controls can be dangerous. All the marketers BW spoke to raised an alarm about it. But many players are aware of the perils. “Although we have cut time, it is not as though we are behaving like headless chickens in a frenzied fashion,” says HUL’s Bakshi. Philips’ Sharma cautions against cutting time on research and insights. Indeed, if you look at examples such as the way Tata Nano erred in its product positioning, insights are really important. Also, as Samsung’s Warsi points out, it is not speed alone that has got Samsung ahead in the mobile phone war. “Speed with innovation is the difference,” he says.

What about inventory levels, though? Will not new products coming in so quickly hurt their own older lines? LG’s Gupta disagrees. “Yes, there are many products that we want to phase out. But by taking a segmented approach, we make sure that all our products — the top one, the top minus one and the lower ones — can co-exist in the market.”

Most of these executives feel that with the kind of technology changes happening, with the way digital marketing tools are being deployed, time cycles can be crunched even more. But CGN & Associates’ Balaraman says that the challenge in crunching time cycles further is the lack of talent. “There is a serious dearth of talent and skilled workforce — and without talent, you can only crunch time cycles so much,” he says.


(This story was published in Businessworld Issue Dated 22-10-2012)