Consumer-Driven Innovation in Food and Personal Care Products

S R Jaeger, Hal MacFie

• Publisher: Woodhead Publishing
• Year: 2010
• eBook ISBN: 9781845699970
• Topic: Technology & Engineering
• Subtopic: Marketing
• Index: Marketing

Experts from around the world present changes in the global marketplace and developments in research methodologies underpinning new product development (NPD) in this essential collection. The business and marketing aspects of NPD, sometimes neglected in books of this type, are addressed alongside methods for product testing.Trends, processes and perspectives in consumer-driven NPD in the food and personal care product industries are addressed in the opening chapters of the book. Specific topics include evolution in food retailing and advances in concept research. Hedonic testing is the focus of the next section. Different viewpoints on consumer research methods and statistics for NPD are reviewed in later chapters. The final part of the book looks towards the future of innovation, covering the implications for NPD of topics such as human genetic variation in taste perception and neuroimaging.Several chapters are not standard scientific articles. Rather they are written records of conversations between two people on a particular topic related to consumer-driven innovation in foods and personal care products. In them the interviewees speak freely about their views and experiences in NPD, providing unique insights.Consumer-driven innovation in food and personal care products will broaden readers' understanding of the many approaches available to NPD personnel and ways in which they can be used to support innovation activities.- Provides expert insight into the changes in the global market place and developments in research methodologies underpinning NPD- Examines the business and marketing aspects of NPD, sometimes neglected in books of this type, are addressed alongside methods for product testing- Chapters review the different viewpoints on consumer research methods and statistics for NPD

Part I

New product development head-on: trends, processes and perspectives

1

Consumer-oriented innovation in the food and personal care products sectors: understanding consumers and using their insights in the innovation process¹

K.G. Grunert, B.B. Jensen, A.-M. Sonne, K. Brunsø and J. Scholderer, Aarhus University, Denmark

D.V. Byrne and L. Holm, University of Copenhagen, Denmark

C. Clausen, A. Friis and G. Hyldig, Technical University of Denmark, Denmark

N.H. Kristensen, Aalborg University, Denmark

C. Lettl, Vienna University of Economics and Business, Austria

Abstract:

In this chapter, we clarify the concept of consumer-oriented innovation in the food and personal products sectors and define it as a process towards the development of a new product or service in which an integrated analysis and understanding of consumers’ wants, needs and preference formation play a key role. We then outline relevant streams of research that may promote the implementation of consumer-oriented innovation in these sectors. We first review research on understanding consumers, notably on quality perception, associated methods, and their application in innovation processes. We then review research on innovation management, emphasizing the use of consumer insight information in innovation processes. We conclude that a better integration of consumer research and research on innovation management would benefit the innovation process.

Key words

user-driven innovation

market orientation

quality perception

consumer research methods

1.1 Introduction

Innovation is widely viewed as a major competitive parameter in the food and personal products industries. Recently, the political debate about innovation has focused a great deal on user-oriented innovation. User-driven innovation is a phenomenon first observed and described in the 70s by von Hippel (1976; 1978), the innovation researcher. He documented a number of cases where customers did not wait for manufacturers to launch new products, but proceeded to modify or adapt existing products according to their own needs of their own accord (von Hippel, 1988). Well-documented examples can be found in a number of business-to-business markets, where customers, for example, adapt machinery and equipment to their own needs, for example medical surgery equipment (Lüthje, 2003), pipe hangers (Herstatt and von Hippel, 1992) and in the IT trade, where user communities modify software or in a few cases develop new products themselves (like the operating system Linux). Finally, a few examples exist on business-to-consumer markets. For example, some argue that the invention of mountain bikes primarily originates from cyclists who started modifying standard bikes for use outside the road system (Lüthje et al., 2005). In every case, a manufacturer subsequently adopted the idea, industrialized the production and thus commercialized the customers’ innovation.

In the course of time the use of the term user-driven innovation has been extended considerably. Thus, today it is often used not only to cover situations where users initiate the innovation, but all forms of innovation where there has been a good measure of user involvement in the innovation process. This extended meaning of the concept thus also covers situations where the manufacturer initiates the innovation and subsequently involves users in the development process, and even situations where the manufacturer uses an agent to involve users in the innovation process (e.g., a trend spotter or a market research agency). A number of related concepts exist in the literature, including early customer integration (Gassmann and Wecht, 2005), participatory design (Mayhew, 1999), and user-centred development (Ketola and Ahonen, 2005).

Users can be both direct customers and end-users. Product development takes place in a value chain where companies develop products for customers who make up the next step in the value chain, and in more or less consideration and understanding of the parts of the value chain that follow further downstream from the direct customers, up to the end-users (Grunert et al., 2005). The concept of user-oriented innovation includes both customers and end-users. In the present chapter, we will concentrate on the involvement of consumers in the innovation process.

In order to distinguish the focus of this chapter from the original concept as defined by von Hippel, we will use the term consumer-oriented innovation in this chapter, and define it as a process towards the development of a new product or service in which an integrated analysis and understanding of the consumers’ wants, needs and preference formation play a key role.

It is the purpose of this chapter to provide an overview of existing research and research methods that can be fruitfully applied in the area of consumer-oriented innovation in the food and personal products sectors. We will address two streams of research that are of relevance. First, research on how consumers form preferences for products and services can provide useful input for consumer-oriented innovation. Second, research on how consumer-oriented innovation processes can be managed in the innovating organization, including questions on how to integrate consumer information into the innovation process and on how to create cross-functional cooperation with those parts of the innovating organization dealing with consumer intelligence, production, and technological research and development, respectively.

1.2 Understanding consumer preferences in food markets

Consumer markets are mass markets, and are therefore characterized by a lack of personal interaction between the innovator and the users – or, at least, most users. User-oriented innovation for consumer markets therefore usually involves characterizing the population of potential buyers by sampling techniques, and/or in-depth characterization of a small number of consumers where such insights are deemed to be especially valuable.

Although consumer-oriented innovation is here defined as a process towards the development of a new product or service in which an analysis and understanding of the consumers’ needs and preference formation plays a key role, this does not imply that the aim is to develop products and services for which consumers are able to articulate the need themselves. It is a well-known phenomenon that consumers often are not able to articulate their need for really innovative products, because their thinking is framed by the products currently on the market. Also reactions of consumers when confronted with highly innovative new product concepts are not always reliable, as they may find it difficult to imagine the use of these innovative products in their daily lives.

In order to deal with this problem, the innovation literature has used the term latent needs for needs that users are not aware of, but that they will become aware of once the product tapping those needs is on the market (e.g., Leonard and Rayport, 2000). Some methods for detecting such latent needs have been promoted; this we will come back to. However, we should also note that the concept of latent needs has no theoretical foundation in the buyer behaviour literature. The buyer behaviour literature has, however, carried out considerable research (mostly based on psychological theory) on how buyers form preferences for products that come on the market, and has developed methods that can be used to measure factors that may influence this preference formation process. Understanding the mechanisms by which consumers form preferences for products once they are on the market may therefore be a more promising attempt than trying to measure latent needs, because there is a body of research to draw upon.

Preference formation is a complex process in which personal, situation-specific, and socio-economic factors play a role in addition to the attributes a new product possesses. While many different approaches to the analysis of preference formation have been proposed, a common theme is that preference formation is explained by some kind of subjective trade-off between what one has to offer in order to get the product – where price is the major component – and what one gets. What a potential buyer expects to get out of a new product is often analysed in terms of the perceived quality of the new product, relative to existing products. Food companies’ attempts to develop products that consumers will embrace may therefore be characterized as an attempt to create the right quality/ies for their customers.

In the following, we will therefore give a brief introduction to the analysis of quality perception, drawing on the Total Food Quality Model, which is an integrative management-oriented framework for analysing consumer quality perception. While it has been developed to analyse quality perception in the food area, it can easily be extended to non-food cases.

1.2.1 Consumer quality perception

Different research approaches have focused on questions related to consumer quality perception in order to improve the understanding and prediction of product choices and to provide inspiration to user-oriented new product development. Consumer quality expectations determine whether a new product will be purchased once, wherea...

Table of contents

• Cover image
• Title page
• Table of Contents
• Copyright
• Dedication
• Contributor contact details
• Woodhead Publishing Series in Food Science, Technology and Nutrition
• Preface
• Developing the Next Generation in Healthy Foods
• Part I: New product development head-on: trends, processes and perspectives
• Part II: Hedonic scaling in new product development: past, present and future
• Part III: Consumer research methods in new product development
• Part IV: Statistics and new product development
• Part V: New product development in the future: new consumer trends, new science
• Index