How International Companies Can Optimize Concept Development

7/28/2019 How International Companies Can Optimize Concept Development

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This paper provides a case history for multi-country conjointmeasurement. The project began as an exercise to understand the featuresand communications of a food product across many countries, but turnedinto an organizing principle to understand consumers, worldwide, and at

the same time evolved into a unique database that could be used by thecompany again and again for product development. The authors presentthe pros and cons of the approach and describe how the thinking hasevolved.

FROM MULTI-COUNTRY

CONCEPT TESTING/

OPTIMIZATION TO CORPORATE

DATABASE AND BEYOND

Johannes Hartmann

Howard Moskowitz

Jeff Ewald


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Johannes Hartmann, Howard Moskowitz, Jeff Ewald2

INTRODUCTION: THE EXISTING SITUATION

FROM THE CORPORATE BOARDROOMThe existing belief in many companies is that concepts for FMCG (fastmoving consumer goods) need to be individualized for each culture. This pointof view does not necessarily find itself based on fact, but rather on belief.Management recognizes the growing internationalization of products, theincreasing trade among countries, and the emergence of brands that can becalled world brands. At the same time there is the perennial reluctance toabandon the local point of view and simply agree that the world is becominghomogeneous. Current trends neither point to a complete homogenization, nordo they point to complete country-to-country differentiation. They point to

some in-between reality (Trout and Rivkin, 2000). In actuality, even when acase for globalization can be made on the basis that consumers in manycountries declare the same motivations and expectations, a closer look willoften reveal slight differences that must be taken into account (Kapferer,1998).

The attractive but vague notion of internationalization doesnt deal with theobvious difference between the what and the how. Similar product formatsand product designs can be used across countries. However, the wayconsumers discover and incorporate new products into their lives is to a high

degree a function of culture (Bacon and Butler, 1998). As a consequence,companies need to build a systematic approach to the how they structure theprocess ofdeveloping connecting logic with consumers. This how will varyby cultural background (Mitchell, 1983; Wells, 1975).

It must be recognized that, within the organization, a move towardsglobalization can mark a profound cultural revolution a change thatnecessarily entails a change in decision-making procedures. Even more so, thechange signals in general an evolution in the underlying structure of theorganization (Kapferer, 1998).

Ideally, these structural changes and new procedures should provide anopportunity for members of the multi-national corporation to collaborate, learnfrom each other, and cross both the geographic and organizational boundariesseparating each other to fulfill the task (co-creativity). The changes shouldmake both corporate marketers and product developers aware of similaritiesand differences among different countries and cultures. It is apparent that theseapproaches must take into account regional and even global learning curves.Of course, good methodology is key. But good methodology requires perfect

pre- and post work. The process character offers the opportunity for regionalteams to learn from each other. If the region teams make conscious use of the


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From multi-country concept testing/optimization to corporate database 3

opportunity they can transcend cultural differences that are rife both internallyand externally (Cooper, 1999).

IF WHAT NEEDS TO BE DONE IS SO OBVIOUS,

THEN HOW CAN CONSUMERRESEARCH CONTRIBUTE?

The job of consumer research is to identify opportunities for products, whetherlocal or international, and where possible develop the knowledge base forthese products. The traditional approach to answer this problem follows aseries of well-choreographed steps known to most consumer researchers, and

by now embedded in the knowledge-development practice of most

corporations (Hoban, 1998):

1. Opportunity identification: Identify a product opportunity, either bymonitoring trends or by working with consumers and in turn identifyingtheir unmet needs. Occasionally the product opportunity presents itselfthrough technical developments by R&D, such as a new product, new

process, or even a new ingredient. At this stage the product opportunity isrelatively unformed. It exists, it can be sensed, occasionally its magnitudecan be guessed, but there is nothing specific about the product that will fillthis opportunity (Haeckel, 1999).

2. Concept development: At this stage the opportunity has been identified andaccepted. The concept development stage now seeks to create an idea thatwill encompass this opportunity. The product concept will tell thedevelopers what the features of the product should be. The marketingconcept will tell the agency how to talk about the product. The conceptdevelopment stage can be short, long, involved, or relatively simple.Occasionally the development stage is skipped entirely, based uponmanagement fiat. It is at this stage that there are opportunities for trans-national research. It is furthermore at this stage that the differentframeworks for multi-national development make themselves known.

There are two ways that companies can build concepts. One way is top-down development, and the other is bottom-up development, respectively.Top-down concept development, the traditional method, waits for acorporate mandate, creates a variety of concepts through ideation sessions, andthen selects the best concept. This traditional method is useful in one country,

but runs into problems when the concept must be transported from one countryto another. The changes in the concept are often done on an ad hoc manner, soin the end the single concept may become two, three or more disparateconcepts (Fuller, 1994).


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As described earlier, this top-down approach doesnt create an internallearning curve across cultures. In actuality it effectively proves the obvious

truism that all cultures are different. Internally people say this is not workinghere and they can prove because, it is likely that the connecting logic is notsufficiently culture-specific.

THE BOTTOM-UP APPROACH:

STRUCTURE PLUS FLEXIBILITY

A more rational approach for multi-country, multi-cultural conceptdevelopment builds concepts from the bottom-up using a structured

approach. In this case the approach begins with a set of product, positioning,and package features, combined into test concepts through conjoint analysis.Testing these concepts in different countries allows the marketer, productdeveloper, and researcher to create a global model as well as individualcountry-by-country models showing how each of the concept elements drivesinterest at the respondent level. Furthermore, by using the same elementsacross countries it becomes straightforward to segment the respondents bycommonality of response to concept elements, producing true trans-nationalconcepts.

A key aspect of the bottom-up approach is that it occurs early in thedevelopment process, where there are many options open. Rather thandevelopment proceeding along a path governed both by opinion and by ideasthat might be in either overt or covert conflict, bottom-up developmentensures that opinion need not sway the business decisions. There can still beopinion, but scientific corroboration of the opinion goes hand in hand with theopinion, rather than perhaps one advocate in the corporation being provedright and the other advocate by necessity being wrong. Opinion and factsynergize to produce effective, knowledge-based development (Rosenbaum,1987; Veganti, 1997; Zaltman, Duncan and Holbeck, 1973).

The beauty of the bottom-up approach is that it is inherently a collaborativeexercise that subtly but inexorably shapes both the organizations structuraland procedural dynamics. Different people from different cultural backgroundshave to decide on the input of the study. Hobby horses, apparent logic andmy-bosss-favorites could be easily added into the approach. In addition,

people are forced to define one set of inputs, a requirement which aligns themethodology so it is agreed to at the start of the project.

The leadership team using the bottom-up approach collaboratively shouldexperience and generate the following:


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1. Common understanding and expectations: All participants of the team willneed to understand the process and the methodology of the tool used. As

participants gain an understanding of the research paradigm andterminology, they easily find individual ways that allow them to own the

process. In our experience, conducting a comprehensive project briefing atthe beginning establishes a common syntax leading to a methodology-centric common language. The common language is critical. It binds

people together. The shared process/methodology become the center ofgravity for a group identity. On occasion the country representatives willinitially resist the idea of cooperation, but after they are briefed and thenrealize the new tool offers them full contribution, most contrarians start toalign themselves with the process.

2. Understandable outcomes that are anticipated and welcomed: Bottom upmethods create a base for accepting the outcomes. Corporate participantsand external associates in the ideation project impatiently look forward to,and accept the outcomes. The participants dont need to defend their

positions as their positions are intrinsically recognized and respected bythe methodology.

3. Innovative approaches create a positive hype in the organization thatcan breed organizational change. This outcome is especially importantwhen innovations have to create momentum. A new and/or advanced

method, embraced with a common purpose and understanding can producean esprit dcorps and lead to outcomes that never would have beenachieved with traditional, well accepted, and therefore less thought

provoking, approaches.

4. New language, new bonding, new positioning: The new methodautomatically creates new language for the team, which creates a bondamong the members. The bonding leads to the positive perception of theteam and its contributions by other members of the corporation.

The value to a company of doing bottom-up concept development lies in the

following four outcomes:

1. Enhanced, unique learning at the early development stage, where theoptions are open. The data encourages cross-cultural learning andacceptance about what features, benefits and positionings work in differentcountries, and what does not.

2. Harmonization: The resulting output can be immediately harmonizedbecause the concept elements (inputs) are similar or the same acrosscountries. This provides the connecting logic an empirically basedhierarchy of ideas based on the degree to which the same inputs (stimuli)

produce the same effect (response).


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3. Trans-national segmentation. The segmentation is truly transnational,independent of country, because one only needs the response of the

individual, not the country from which the person comes from. Buzzell andQuelch (1988) recognized that despite the corporate view of globalismwith respect to a given brand or product, it is ultimately the individualconsumers whose choices remain individualistic and egocentric, and inreality who determine the degree to which a similar or differentiatedstrategy will be successful.

4. Databasing. The data provides an integrated database that allows thecompany to create products over time, for the total panel, for a trans-national segment, for the country or even for a trans-national segment

subsequently particularizedfor a specific country. The richness of the datacreates a de facto product database that has sustaining value for thecompany. Thus one can use the data to create different products forconsumers in a country, or fine-tune the product across countries. Thiscapability solves some of the issues of segmentation by creating a single

base idea that can be differentiated as needed.

THE UNILEVERSTRUCTURE AND APPROACH TO

TOP-DOWN VS. BOTTOM-UP DEVELOPMENT

Unilever is one of the leading, fast-moving consumer goods companies in theworld. It has been in existence for more than one hundred years. Through theyears Unilever developed a corporate genetic code for development thatconstituted the foundations for its success. In the same way as othercompanies, however, Unilever has had to struggle through the years to changeits views to keep competitive advantage in its core categories and brands.These struggles were not always easy and not always successful.

Unilever has a very unusual organizational structure. It is led by two headoffices, one in the United Kingdom and one in the Netherlands. This structure

has had advantages as well as disadvantages to the overall decision makingperformance of the company:

1. Diversity generally breeds caution: This unusual structure created a lot ofdiversity in terms of views on issues. As a natural outcome, therefore,decisions have always been very balanced and well-thought through.

2. Separated offices can create conflicts: On the other hand: Unilever has hadits share of politics which sometimes made it difficult to arrive at anydecision.


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Unilever always valued the independence of its local companies. This beliefwas and is an intrinsic part of the Unilever culture. Local independence proved

to work very well until the point was reached when in the local countryUnilever had to face the increasingly competitive environment. The masscompetition forced a re-focus on core brands and core business at the moregeneral level rather than at the local level. It was necessary to lose sight ofsome of the country specifics in order to become stronger worldwide, and toachieve more efficiencies and economies of scale.

The Unilever brand-portfolio broadened over the years. In the 1970s and1980s almost every new business thrust was linked to the launch of a new

brand. As local companies werent disciplined at all by the center, each

country developed its own set of brand names for the comparable positioningsand categories. In the 1990s Unilever tried to reverse this trend and still worksat this reversal. What had evolved into an enormous number of brands hasnowadays been reduced to a small set of global leading brands and local

jewels. This transformation process has been a painful one, requiring adramatic change in the way Unilever was doing business and in the way thecountries had to be aligned.

In the beginning of this transformation process Unilever experimented withdifferent organizational models. Each model was intended to create synergies

between countries. Here we talk about Europe specifically, a market where

Unilever is exceptionally strong. After a couple of organizational re-structurings Unilever finally installed a model in Europe that put theresponsibility for the value-creation process, i.e., all brand- and innovationdevelopments, into several European innovation centers. These centers wereresponsible for the innovation agenda and for the harmonization of the brand

portfolio in Europe. The management in the different countries had, of course,a huge say on these agendas. Finally management from the countries wasrequired to introduce the newly developed concepts from these centers into themarket place. The very problem of this structure is obvious: countries andcenters need to agree what is good for the countries and at the same time goodfor the regional approach. The situation paralleled what was so clearly and

profoundly said in the movieA Beautiful Mind: You have to find out what isbest for you individually whilst you have to find out what is the best for thegroup!

One of the consequences of the shift to innovation centers was the necessaryevolution of concept development. Top down approaches, which had beenregularly used in the past, never delivered a real break-through because theywere too vulnerable during the final negotiation step among the different

parties. It was impossible to legislate the acceptance of a new idea, no matter

how good, because there were too many vetoes in the hands of parties with


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different agendas. The innovation center had to change the conceptdevelopment paradigm by involving the different countries in the very early

phase of the project. The Ideamap approach with the related process stepswas one of the approaches that Unilever was testing to fit in with thisinnovation process and the harmonization through cooperative collaboration atthe early stages. IdeaMap helps mold and even in some cases force verydiverse teams into community by offering a bottom-up structure. In thisstructure everyone played an integral role, had a key part, and could not beoverlooked. No one had to fight for his personal advantage to win because ofwhat the process might produce in the way of a concept. Everyones opinionsand pet ideas could be incorporated into the research, so no matter whathappened the group would win, rather than any individual prevailing at theexpense of any other individual.

A CASE HISTORY ILLUSTRATING THE APPROACH,

AND COMMENTS ABOUT THE ISSUES FROM THE VANTAGE

POINTS OF BOTH RESEARCH AND A BUSINESS PROCESS

Our case history involves the creation of an intermediate product positioned tobe between margarine and oil, capturing the advantages of both worlds.

Creating these products that stand astride two different categories is one of theUnilever approaches to innovation. The melding of two product categories intoa new category is a standard innovation strategy. Margarine is one ofUnilevers most prominent products. Unilever creates and markets margarine

products worldwide, so that the experience with creating a new, health-oriented margarine is both new because of the new-product development, butalso a well-trodden path.

The primary objective for this particular margarine was to create a Europeanproduct that would take advantage of the growing concern with health, andposition the product as an alternative to cooking oil. The concept had to be

ownable by the current Van den Bergh franchise, and work in the fourdifferent countries: Germany, Netherlands, Sweden and the United Kingdomas the initial markets.

The secondary objective was to learn how to create a product concept from thebottom-up. We created a large-scale database for margarine from thebottom-up, across four countries, in order to demonstrate the usefulness ofthe approach. In doing so we developed both knowledge of the features thatwould lead to a good concept, and knowledge about the process of conceptcreation using this new-to-Unilever approach.


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IDEATION: MIXING OLD AND NEW STEPS

The Van den Bergh group of Unilever had extensive experience in conceptdevelopment because of its history of introducing European products. Thus, ata general level the notion of creating concepts for the new margarine productwas already well respected. In its role as a multi-national company, Unileverwas also accustomed to having its operating units think in multi-national termsso that the creation of the concept elements for the IdeaMap conjoint studyelements was done with sensitivity to multi-national requirements.Furthermore, the notion of ideation was also well accepted within the Unilevercompanies, which had early on spearheaded the consumer research techniques,and ensured their use worldwide. The traditional way for concept development

was top-down. At the time of this innovation project the management atUnilever was struggling to fit the traditional way of doing things into thisdevelopment objective. This new oil-margarine interface product representedone of the first forays outside the traditional approach into bottom-updevelopment.

The ideation was done with members of the team from the different countriesin one room. The ideation encouraged each of the members to contributenuggets of ideas, or single-minded phrases, rather than fully formed ideas.With members from the different participating countries present, and with theultimate goal of creating a conjoint study having 300+ elements, the ideationsession allowed members of the team from each country to offer an array ofideas without feeling constrained. The qualitative brainstorming wasaccompanied by qualitative research among consumers in each country, withsecondary analysis to deconstruct the ideas used by both Unilever andcompetitor companies in the general area of margarine, oil and spreads.

A sense of the richness of the output can be appreciated by looking at table 1.A total of 316 elements were finally selected from more than 500, after thearray of possible elements was reviewed, edited, and culled to removeredundant items. The elements fell into 12 categories, or general groups. The

conventional conjoint approach uses equal categories, limited in size. Thealternative conjoint method IdeaMap allowed many dozens of elements in acategory. A category (e.g. Usage Occasion or Packaging Description) containsrelated elements. In multi-country work, where there are different cultureswith differing sensitivities, and where the database approach may yield similar

but modified concepts on a country basis, this capability to deal with manyelements is key. It is important to cast a wide net and assess many elementsfor the new margarine product ... because we dont know what will work(Moskowitz and Martin, 1993).


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Table 1

SIX OF THE TWELVE CATEGORIES FOR THE FOUR-COUNTRY STUDY OF

MARGARINE, NUMBER OF ELEMENTS IN THE CATEGORY

AND AN EXAMPLE OF THE ELEMENT

Category Elements Example

Visuals 25 Bag-in-Box visual

Product name 28 Product name is: Magic Touch

Packaging description 21 Comes in a bottle similar to olive oil

Packaging benefi ts 27 The packaging is sealed to guarantee freshness

Product descri ptions 27 It's a cooking liquid with a great buttery taste

Functional Benefi t 32 All the natural goodness of oil

STRUCTURING THE CONCEPT CREATION APPROACH

TO CREATE A MULTI-COUNTRY DATABASE

Ideation of whatever sort usually leads to a large set of elements for the new

product, which is the happy outcome of most of the new product efforts atUnilever as well as other companies. It is not so much in the ideation butrather in the formal, structured, yet open approach to work with this ideationoutput that the interest lies. In order to make the most of the data for currentand future work, and in order to embed the way of thinking and the data intothe Unilever system, it was necessary to follow a structured approach.

The structure followed seven steps, which ensured cross-country cooperationduring the course of the up-front work prior to research, standardized fieldwork during research, and a database approach to concept development(concept informatics) after the research:

1. Basic experimental design: We used large-scale-conjoint measurementfollowed by a large-scale classification study, with both parts of thestructure similar across all countries (Moskowitz and Martin, 1993). Theapproach was designed to be the prototype for future multi-national, cross-cultural product studies. It was necessary in this design structure toaccommodate several hundred elements in order to represent thecontributions of the different cultures to the same product. Conjointanalysis is a well-respected research method with a long and successfulhistory (Bateson, Reibstein and Boulding, 1987; Wittink and Cattin, 1989).


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This happy state of affairs ensured its acceptance by Unilever, even amongthose project participants who had no prior experience with the method.

2. Element bank (raw material) for subsequent databasing: For the conjointmeasurement portion, participants in the ideation and subsequent in-houseediting by Unilever created a very large bank of concept elements thatdealt with different brands, benefits, packages, product features, healthfeatures, etc. This element bank would serve as a resource for the study.As much as possible, we held these elements identical across the differentcountries. The study itself comprised 316 concept elements. Since the goalwas to create a corporate database that transcended countries, and could beused both at the time of the research as well as for years afterward, it was

important to use as many different concept elements as possible. It becameincreasingly clear that a great deal of value would lie in the richness of theconcept elements and in the analysis of subtle differences of certaindescriptors. One or two words stated a little differently might make a hugeimpact. The more elements to be studied meant more insight and more

possibilities for applying the research results to different cultures.

a) From these categories and elements, experimentally designed conceptswere created, using the principles of experimental design.

b) Most concepts contained four or five elements out of the 316.c)

Each respondent evaluated 80 elements, embedded in 100 differentconcepts.

d) The combinations rated by each respondent comprised their ownexperimental design. This design at the individual level allowed us tocreate a model for the individual respondent showing how theindividual elements tested by that respondent drove ratings

3. Execution: The PC-based interviews ensured that the study could beexecuted anywhere, in an identical fashion, in each country, with 200+respondents per country (Germany, Netherlands, Sweden, United

Kingdom). Each interview lasted approximately one hour. PC-basedinterviews (and now Internet-based interviews) allowed us to develop asystem that could be transported worldwide, without concerns about theability of the local researcher to execute the study. This capability would

prove very valuable for subsequent work in languages that do not featureLatin characters. The PC-based interview meant that many controls could

be placed in the interview, such as unique combinations rated by eachrespondent, rather than having every respondent test the same set ofstimuli. These computer-based features ensured that the results of theinterview would have less bias. Furthermore, user-friendly PC-based

interviews ensured that the approach could be used in countries where


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face-to-face interviewing might produce covert biases with respondentstrying to please the interviewer. The interviewer effect would be

minimized. Figure 1 shows the orientation page for the English study.Figure 2 shows the orientation page for the Swedish study. In each studythe respondents rated the test concepts on three attributes: interest, fit to alocal brand (e.g., I Cant Believe Its Not Butter for the UK; Milda forSweden, etc.) and use (in place of oil versus in place of butter/margarine).

Each respondent evaluated 100 systematically varied concepts on each ofthe three rating scales. The IdeaMap computer program created theindividual and unique combinations from a subset of the full set of 316elements, presented the combinations to respondents, and collected the

ratings of each concept on the three attributes.

Figure 1

ORIENTATION PAGE FOR THE ENGLISH STUDY


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Figure 2

ORIENTATION PAGE FOR THE SWEDISH STUDY

4. Analysis: The ratings for interest for each respondent were re-coded, sothat the low ratings (1-6) were recoded as 0, and the high ratings (7-9),denoting strong interest, were recoded as 100. The ratings for the otherattributes were not recoded. The ratings assigned by each respondent werethen analyzed by ordinary least squares, using a dummy variable model.The analysis showed the part-worth contribution of each of the 80elements for the particular respondents. The regression model for anindividual is expressed by the simple equation:

Interest = k0 + k1(Element 1) + k2(Element 2) k80(Element 80)An algorithm then estimated the part-worth contributions of untestedelements, so that in the end each respondent had a full set of utilities,showing the contributions of each of the 316 elements to interest.

The additive constant, k0, is technically the conditional probability that therespondent will rate the concept between 7 and 9, denoting high interest, ifthere are no elements present. Clearly no concepts were rated absentelements. However, the additive constant is an estimated parameteremerging from the regression modeling. It provides a sense of the basic

interest in the margarine products. Additive constants below 20 correspond


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to products that are not themselves particularly interesting, but can bemade interesting by the judicious selection of particular product features

and sales messages. Additive constants of 60 or higher denote productsthat are intrinsically interesting, so the concept elements need not do muchwork to increase concept acceptance.

The utility values k1 k80 show how each of the 80 different elementstested by a single respondent drive interest ratings. Technically, the utilityvalues are the coefficients of the dummy variable regression equations,and emerge from the dummy variable regression analysis. For example, autility value of 10 can be interpreted as an additional 10% of therespondents may be expected to rate the concept as highly acceptable (7-9)

if the element is introduced into the concept. High utility values (ki > 10 ormore) correspond to strong performing elements. Utilities of 5-10represent good performers. Utilities 0-5 represent elements that domodestly at best. Utilities below 0 correspond to elements that do poorly.Most of the elements in the study do poorly, with utilities of 5 or lower(see figure 3).

Figure 3

SMOOTHED FREQUENCY DISTRIBUTION,

SHOWING THE NUMBER OF CONCEPT ELEMENTS OUT OF 316

THAT ACHIEVE SPECIFIC UTILITY VALUES

The subgroups are listed in descending order of their peak counts, so that the Total is

the top-most distribution, and the UK is the bottom-most distribution.


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5. Subgroups: For this paper, we will look at the data by total across allcountries, by concept response segment and then by country. A sense of

the type of data that emerged from this multi-country study can be seen intable 2, which shows the winning elements for the total panel, threeconcept response segments and the four countries (see below).

At the level of country there were some observations made that describedthe data, but there did not appear to be the unifying theme that wouldallow Unilever to use the data both for the current project, and also let it

become the foundation of a knowledge system. Some of the observationsmade from looking at the same data across different countries (itself amajor leap forward), were the following:

a) At the country level, there are some differences in utility ranges andthe nature of the winning elements.b) The constants vary slightly, with that of Sweden rather low, meaning

low basic interest in the idea. For Unilever this ability to understandthe basic attraction of an idea by country, and later by segment, was to

become very important because it provided a new way to understandcountry-to-country differences in reactions to concepts.

c) The score ranges vary slightly, with the Netherlands and the UnitedKingdom somewhat more responsive. Again this would become

important because there were no similar normative data on responsesto concept elements by country.

d) The preferred themes vary slightly, with the Netherlands more open toa variety of themes, while the United Kingdom and Sweden aredominated by health and Germany by convenience.

e) Nonetheless, at country level there are few major or consistentdifferences, and preferences are not strongly differentiated at countrylevel. There are few elements with high utility values (figure 3).

f) The story is not a purely national one. There must be a deeper patternin the data.


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Table 2

WINNING ELEMENTS FOR THE TOTAL PANEL, THE COUNTRIES,

AND THE THREE KEY CONCEPT-RESPONSE SEGMENTS THAT

EMERGED FROM THE STUDY

Segment Country

Tot Conv HealthCooks UK GR SW NT

Base size 833 253 244 223 213 201 204 215

Additive constant 44 41 44 42 43 46 36 50

Maximum scoring

element 4 12 8 12 8 5 6 7

Minimum scoring element -7 -10 -10 -8 -5 -8 -10 -14

Range of elements 11 21 17 20 13 13 16 21

Average of elements 1 1 1 1 1 0 1 1

Total Panel

FA20Is made from vegetable

oils, provided by nature

and essential to your body 4 4 6 6 5 0 6 5

EN2 Live a longer healthier life 4 3 6 7 6 0 3 7

Conveni ence Segment

FA28Because it's liquid, it'seasy and handy to use 3 12 0 -1 2 2 2 4

FA25It can do everything a

solid margarine can - but

it's quicker, handier and

cleaner 3 10 3 -1 1 3 3 5

Health Segment

FA9 Has virtually nocholesterol 4 3 8 4 8 -1 4 4

PD23Its a well balanced mix of

30% oil and 70%premium margarine 1 -1 7 -2 2 1 -1 1


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TABLE 2, CONTINUED

Segment Country

Tot Conv HealthCooks UK GR SW NT

Cooking Interested

Segment

PK19Comes in a bottle similar

to olive oil 1 -2 -2 12 3 0 0 1

VS5 Glass bottle 1 -2 -1 11 2 3 -1 1

UK Respondents

FA9 Has virtually nocholesterol 4 3 8 4 8 -1 4 4

FA5 Contains calcium for

strengthening bones and

teeth 3 3 4 6 8 0 4 2

German Respondents

PB23The packaging stays clean

- every time. So does your

fridge. And so do you. 1 9 -1 -2 2 5 1 -2

PD16It's a well balanced mix of70% oil and 30% butter 3 2 6 3 2 4 1 3

German Respondents

FA20Is made from vegetable

oils, provided by nature

and essential to your body 4 4 6 6 5 0 6 5

TG12For the health-consciouscook 4 3 6 4 5 1 5 4

Dutch Respondents

FB28It doesn't spit and spatter

because of its specialformulation 3 6 4 2 4 0 1 7

EN2 Live a longer healthier

life 4 3 6 7 6 0 3 7

(GR = Germany, SW = Sweden, NT = Netherlands; Conv= convenience oriented)


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6. Concept-response segmentation: Conjoint analysis models at theindividual respondent level. This individual modeling allows segmentation

of respondents, independent of country (Green and Krieger, 1991). Thedata from the four countries were analyzed, independent of country, togenerate three trans-national segments. The systematic generation of suchtrans-national segments was key to the objectives of this study, and to theobjective to database multi-national concept information. We had set upthe design to allow us to do this segmentation, following the approach

previously suggested for other products such as coffee (Moskowitz, 1996).

The stronger performance of some elements emerging out of thetransnational segment, based upon patterns of utility values independent of

country, appears clearly in figure 4.

Figure 4

SMOOTHED FREQUENCY DISTRIBUTION FORTOTAL PANEL AND

CONCEPT-RESPONSE SUBGROUPS, SHOWING THE NUMBER OF CONCEPT

ELEMENTS OUT OF 316 THAT ACHIEVE SPECIFIC UTILITY VALUES

The subgroups are listed in descending order of their peak counts. The segments show

greater numbers of high scoring elements than does the total panel.

The segments transcend country, and appear in different proportions ineach country. The data from the total panel shows the weak performanceof the elements, but the segments have quite a number of stronger

performing elements. International data by itself can become confusing ifthe analysis is kept to a description of what wins and what loses. It was

critical for Unilever to be able to identify these winning segments, their


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themes, and the organizing principles giving rise to the segments, becausethese results suggest larger-scale organizing themes that increased

fundamental knowledge of the margarine-oil business beyond the studiesof individual countries and individual products.

The insights for Unilever afforded by the concept-response segmentationtook on additional value because of the large number of concept elements(316) that repeated across the different countries. Some of the insightsappear in table 3.

Table 3

INSIGHTS BASED ON WINNING THEMES

FROM THE CONCEPT-RESPONSE SEGMENTATION

1. Each of these segments represents a viable but quite distinct target.

2. Their presence in each country, and across all user groups explains the relatively

neutral data - the demographic scores are averaging out three quite diverse attitudinal

segments.

3. It is still not possible to reach everybody. Convenience Seekers and Cooks tend to

be diametrically opposed in terms of preferences.

4. By targeting segments instead of demographics, it is finally possible to create aproduct that excites real interest

Conveni ence Segment r espond to six themes

Its cleaner

Its quick and easy

It has some sort of packaging design which makes it quicker

It wont spit, spatter or burn, causing mess and skin burns

Its a liquid or spray, not a solid

Its a modern product for a busy lifestyle

Health Seekers respond to f ive themes

Contributes to a healthy lifestyle

Includes specific health benefits in terms of calories, etc.

Has some kind of oil mix

Tastes good

Versatility


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TABLE 3, CONTINUED

Cooks respond to f ive themes

It comes in a bottle like olive oil

Its made from vegetable oil

Its all about good home-cooking

Its the best

Can be used for baking

7. Databasing: The data permitted product management and R&D atUnilever to understand consumer demands across four different Europeancountries. The database thus created was reported in and of itself.However, beyond listing the database of elements by key panel subgroups,Unilever worked on creating a concept optimizer and simulator for thisdata. The optimizer sorted through the different concept elements, andcreated new combinations that had specific features, and performed well ina number of countries. The concept optimizer furthermore took intoaccount several dozen pair-wise combinations of elements that could notappear together (constraints). The optimizer accompanied the database asan integral part of the knowledge base, and was used separately in eachcountry for decision-making, as well as by an international teamrepresenting the different countries. All individuals were using the samedata, and could coordinate their development and marketing strategies,using this common database.

EIGHT LEARNINGS AND OBSERVATIONS EMERGING FROM

EXERCISE TO CREATE CONCEPTS FROM THE BOTTOM UP

The eight key learnings about the role of market research and the conceptdevelopment process are the following:

1. The Leadership: A demonstration of the power of bottom-up development.Applying a process and new methodology, Unilever market researchstimulated break-through thinking with a very diverse team of participants.The success of the project was an important concrete demonstration forUnilever leadership about the power of bottom-up development, at theearly stage of development.


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2. The Corporation: A chance to change the corporate culture involved inconcept development. It is worth noting here, parenthetically, that by using

a bottom-up approach for the first time in a European context, Unileverwas to discover the strength of that approach. Many projects are run top-down, but the record is beginning to show that that they are not

particularly successful.

3. The Corporation: An opportunity to systematize the concept developmentprocesses that lead to databases. The approach presented heresystematizes concept development, and improves the chances of success

because it combines a broad scope of raw materials, a way to understandconsumer reactions, and a segmentation approach that uncovers new, and

hitherto unexpected segments that transcend different countries andcultures.

4. The Corporation: Transcend differences among professionals in thecorporation responsible for developing new ideas and advancing into newareas. Internally we learned that we had to define concepts close to cultureand had to combine conservatism with expansiveness. It became clear thatinitially anticipated differences across countries were not thatoverwhelming that they hindered the process. In the subsequentdevelopment processes the coordination between country representatives

became much easier.

5. The Corporation: A platform for open negotiation among participants.The process offered a platform to negotiate without losing ones own

position. People dont need to defend their inputs. The methodologydefused the personality ownership and position issues during input-generation.

6. The Research Professional: Empowered market research professionals.Up to now a great deal of concept development has relied on experts, onintuition, or on serendipity. Market researchers have been relegated to the

job of evaluating the new concepts. When called to be members of thecreative team they have provided input, but have not been as vocal as theadvertising agency, marketing, or the external creative/marketingconsultant. The use of research here provides the professional with a wayto be heard, and with the ability to contribute winning ideas to the conceptdevelopment process.

7. The Marketing Research Field: Advanced the market research discipline.The use of segmentation across cultures provided a new dimension forconsumer researchers who continually seek better ways to understandconsumer behavior.


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8. The Marketing Research Field: Consumer research emerged into aneffective regional leadership tool. Consumer Research defined as a process

has the clear chance to define aligning principles in an environmentwhere so-called cultural differences are used to defend local perspectives.

IMPLICATIONS FOROTHERORGANIZATIONS

It is well recognized that there are many barriers to effective globalization,some external in nature. However, many barriers are internally erected.Examples include ineffective organizational design, legacy paradigms andover-reliance on ad hoc, disjointed information, and the like. For many

organizations, globalization is still a voluntary step for the local operatingmanager. The notion of relying on specific, ethnocentric learning andexperience creates a strong bias against full implementation of a globalstrategy backed by the well-known byword not invented here (Kapferer,1998).

Even when controlled by highly centralized management, an effective globalimplementation requires the buy-in and cooperation of regional and nationalmanagers to coordinate and control the myriad marketing elements acrossregional and national boundaries. The systematic, empirical process described

in this paper not only provides the global manager with the informationnecessary for improved decision making, it also enhances buy-in andcooperation across geographic boundaries by instituting a collaborative

procedure early in the idea process.

With objective data providing the roadmap for which elements are bestcontrolled centrally and which need to respond to local conditions, we think

becomes we know. The difference in results can be dramatic. Corporateenergies can be channeled against the right things in the right places. Globalideas are allowed to span their potential the promised economies of scale can

be realized. Important local differences are recognized and funded

appropriately. Petty arguments are discontinued. From a commonunderstanding of what needs to be done comes an uncommon commitment togetting the job done.


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THE AUTHORS

Johannes Hartmann is Vice President, Consumer Understanding, Unilever Bestfoods,Singapore.

Howard R. Moskowitz is President, Moskowitz Jacobs Inc., United States.

Jeff Ewald is President, Optimization Group, Inc., United States.

How International Companies Can Optimize Concept Development

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