Consumer Innovation Trends for Products and Services

Consumer Goods Technology (website here) has published good insights on what are going to be the drivers for the next wave of consumer innovation in products and services in the article "Top 3 Innovation Drivers Revealed" here. Highlights from the article:

"Economic Blues: History shows that when the economy stumbles badly, entrepreneurs use this as an opportunity to create "engines of change." During the Panic of 1907, for instance, Henry Ford redefined how manufacturing was done by devising a far more efficient assembly line process..."

"Boomer Influence: While all forms of media continue to demonstrate a bias toward youth, the facts of the aging baby boomers tell a different story about economic influence, growing healthcare issues, lifestyle changes and generational transfer of wealth. In America alone, 76 million baby boomers have an annual spending power of $2 trillion..."

"A Greener World: The 19th century was powered by coal, and the 20th century was powered by oil. Recognition of what past and current human behaviors are doing to our planet have us now moving into an era that will be powered by the sun, the wind, wave motion and renewable energies..."

Personal Care Growth in Russia

SCA, a EUR 11.5b Swedish consumer product goods company (details here), has expanded its Russian personal care consumer products business successfully, see details here. On the same page, a good visual allows a quick browse of SCA's 2008 quarterly reports and highlights. Interesting to note is that SCA net profits grew 4% in 2008.

Consumer Electronics - Nokia Wins in China

From the China Daily article "Nokia signs $1.76b phones deal in China" here. Article states:

"Nokia has signed a 2009 framework deal worth $1.76 billion to supply handsets in China for top phone distributor China PTAC, with the annual contract's value falling from the year ago."

What is interesting to note is that China produces large quantities of off-brand, generic mobile phones that are sold across South and South East Asia, Middle East and Africa. Yet, the quality associated with a brand such as Nokia is winning with the consumer.

Usability - "Universal Design" Through Human Factors Science

During a recent lecture visit to Georgia Institute of Technology I had a chance to catch up on the ever growing group - The Center for Assistive Technology & Environmental Access (CATEA), see details here. Even though the mission of the center is driven to explore accessibility for disabled or handicapped individuals to consumer products and their ease of use - the center has employed "human factors" design and engineering approach that focuses on the interface between humans and machines. Products studied have included everything from photocopiers, mobile phones, and TVs to medicine bottles, printers and scanners.

An outcome of the efforts has been "universal design" intended to make a product accessible to as many different types of users as possible. For example, a mobile phone may have a specific function for people who are hard of hearing. Yet, this is useful for anyone trying to carry on a mobile phone conversation in a noisy environment. Another example is a mobile phone designed for the blind - it could be useful for individuals whose visual attention is focused elsewhere, such as while driving a car.

I learned and practiced the science of human factors with probably some of the best in the industry at the AT&T (then NCR) Human Interface Technology Center (HITC), folks such as Dr. Mark and Nong Tarlton, Dr. Richard Henneman and Dr. Tom MacTavish. Here is a short abstract on HITC:

"The NCR Human Interface Technology Center (HITC) exists to meet its customers' business needs through the application of new human-interface technologies. The HITC designs and develops these user-interface solutions through a user-centered design (UCD) process, in which user needs and expectations guide all design and development decisions. The HITC consists of about 90 engineers and scientists with expertise in such areas as cognitive engineering, graphic design, image understanding, artificial intelligence, intelligent tutoring, database mining, and new I/O technologies. Established in 1988, the HITC is funded by work performed for its customers."

Absolutely way ahead of its time, HITC was the place where research met or tried to meet the commercial world. I was engaged in a National Institute of Science and Technology (NIST) project “Information Infrastructure for Healthcare” – details here.

I am reminded of Steve Jobs statement - "It's really hard to design products by focus groups. A lot of times, people don't know what they want until you show it to them." This was how we conducted our business at HITC!

World's Largest Retailer Pays Bonuses

In business news this week - "Wal-Mart paid out $933.6m in bonuses to 1m of its workers. The retailer has not had to ask for government assistance."

China's Silicon Valley - National Innovation Zone

From colleague Mr. Tony Tsai, Chief Executive Officer – BHG Retail Innovation Institute & Executive VP Operations – The BJ Hualian Hypermarket Co. from China:

"The State Council has reached a decision to back the building of a national independent innovation demonstration zone in the Zhongguancun Science Park (Z-Park) in Beijing, said Minister of Science and Technology Wan Gang Friday.  Some Chinese people like to call the Z-Park "China's Silicon Valley".

See details on the innovation center here.

Read about the Zhongguancun Science Park (Z-Park) here.

Investment in Chinese Firms Sags

From the China Daily, see complete article here:

"Private equity and venture capital firms have invested about $419 million in 11 companies in China over January and February, said the report. They invested $3.62 billion in 152 companies in China in the first quarter last year."

World Perspective / Photo - 5 [Education]

Taking metric (equivalent of class 10 or 10th grade) examination on the premises of Peshawer University, Pakistan.  Candle lights are lit as the power outages are often and unplanned, lasting 12 hours or more in a day. 

Below, students of a local school in Swat, Pakistan solve their examination papers in the debris of their school.  The school was destroyed during fighting between the Pakisani military and insurgents.

Global Recession

BBC has created an interesting site dedicated to the world's current economic condition called "Global Recesion" here.  It an interesting mix of business and financial news on the world-wide recession while being an interesting mix of news on almost all major sectors from manufacturing to BPO, impact on individuals to nations and regions, with good analysis on the events of the day.

South Asian Leadership's Internet Presence

BBC assesses the quality of South Asian political leadership's web presence in "Which S Asian leader has best website?" here.  Couple of interesting surprises.

Consumer Insight - Skin Color: White or Tan?

I have been following Philip Martin's "The Color Initiative" (details here) with interest. Two recent podcasts have provided Asian consumer insights of great value.

Traditionally, from the Far East and South East Asia to South Asia and Middle East, white skin color is prized, darker color has been associated with lower cast or class, implication of an individual's socio-economic standing, etc. Interestingly these influences date back not just centuries but millennia.

To highlight this point, in the podcast a Taiwanese 18 year old girl states:

"I try hard to make my skin white, yes. If my skin is lighter, I think I will be more happier."

Philip Martin states of the skin whitening business:

"Across Asia, skin whitening is a growing and lucrative $18 billion dollar industry. Cosmetic companies and dermatologists are scrambling to cash in – pushing whitening creams, ointments, and skin-bleaching treatments."

Listen to the podcast or read the transcript for "Skin whitening big business in Asia" here.

Next Philip Martin provides a contrarian view that the consumer is choosing to act on from within the same region in the podcast "The color of success in Asia" here.

These two podcasts highlight that a tradition within a culture can have long lasting affects. With economic growth and independence, the consumer can choose to shed the burden of tradition in favor of another choice available to them. The Asian consumer is going to be evolving at a fast pace and the traditional CPG companies engaged specifically in beauty-care may need to look upon this business as FMCG.

Innovations from Developing Nations

An article from Fast Company "How Innovations from Developing Nations Trickle-Up to the West" here by way of Mr. Karthik Meda. The article states:

"Innovation has always been about people in rich nations getting the latest stuff and the rest of the world getting our castoffs as our markets scale and prices come down."

The above statement highlights the narrow approach to thinking about innovation. The above statement may not be wholly correct, and a few of my friends living and working in the developing worlds may just simply smile at the above observation and shake their heads.

I believe the article may have been a good read, say ... 15 years ago. Multi-Nationals recognized these aspects ages ago, built innovation centers in the regions where the creativity was needed and delivered to the consumer. Please search my blog for a plethora of global examples of innovation delivering on the need from the developing world.

Overall, the article disappoints.

Coca-Cola Loses China Huiyuan

Tit-for-tat or the Chinese anti-monopoly law is in affect - read the article "Hard to Swallow" from The Economist here.  The article states:

"On March 18th an answer emerged with the rejection of the largest outright acquisition by a foreign firm, a $2.4 billion offer by Coca-Cola for China Huiyuan, China’s largest juice company."

According to The Economist:

"The most benign interpretation of the rejection being bandied about by lawyers and bankers is that it reflects a political response to critical comments by America’s new administration. The more worrying interpretation is that, even as China publicly urges other countries to commit to opening their markets to Chinese investment and trade, it is imposing yet another barrier to outsiders. Worse still, the barriers are in its domestic consumer sector, one of the few global economic bright spots."

Does the consumer lose out in the end?  I believe they do.

China Declared as an Equal to USA on the World Stage

An email from The Economist:

"Dear Reader,
 
There is a sense in Beijing that this is China's moment. Its leaders nolonger stick to the script that China is a humble player in worldaffairs that wants to focus on its own economic development. InsteadChina is a "great power", which can chide America for its profligatespending, harass its spyships and treat a visiting Hillary Clinton asan equal. As for Europe, that distant, elderly speck on the horizon,it can be safely ignored: France is still blacklisted for daring totalk to the Dalai Lama. Geopolitics is now a bipolar affair, withAmerica and China the only two that matter. Thus in London next monththe real business will not be the G20 meeting but the "G2" summitbetween Presidents Barack Obama and Hu Jintao. This week we look atChina's new role in the world. Even if its new assertiveness reflectsweakness as well as strength, its relative power is growing--and boththe West and China itself need to adjust to this.

And how the world should see China - Click here."

Culinary Consumer Proposition

Chef Roy Choi states in a podcast regarding the Kogi Taco Truck (details here):

"Instead of creating that barrier of tablecloth and waiter, or pretension or anything, what we’ve done is really just break it all the way down to its purest form and brought people out to the streets. Our dining room is the streets."

Listen to the podcast with a slide show here.

Kogi Tacos are an invention by the consumer for the consumer delivered to the consumer in the simplest of consumer desired formats.  Is this scalable?  Is this a temporary market place?  I do not know all the answer, yet I believe this is the future of consumer led innovation that cannot be duplicated in controlled environments.

For example, the above can be contrasted with Culinary Innovation Centers being developed.  Please see a blog by colleague Franz Dill here on the subject.

China Investing in Europe

China is on to its second round of investments in Europe. An excerpt from The American Chamber of Commerce in the People's Republic of China news article "Business delegation of over 20 Chinese enterprises flies to Europe for investment":

"March 7, another Chinese delegation comprised of businesses and industry leaders led by the Ministry of Commerce leaves to visit four European countries for investment and economic cooperation. The delegation is heading for Germany, Switzerland, Spain and Britain. The new delegation will explore investment opportunities in the areas of automobiles, machinery, textile, food, electronics and energy-conservation and environmental protection technologies. The delegation is composed of more than 20 top Chinese companies as well as several national trade associations and government officials."

A recent visit by a Chinese delegation is covered in the article "China spends $10b in Germany" here which states:

"Feb. 25-26, Minister of Commerce Chen Deming leads a business delegation to pay a visit to Germany and Switzerland. A total of 36 procurement contracts worth of more than $10b are signed between Chinese and German companies on Feb. 25. The Chinese business delegation arrives in Switzerland on Feb. 26. The two countries sign a Memorandum of Understanding to boost joint work in energy saving, environmental protection and trade & economy. In addition, the Chinese business delegation inks trade deals worth more than $300m with Swiss companies, such as ABB and Holcim for technical software, advanced electrical equipment, metals and raw materials."

Crowds, Their Self Management - Empirical Data

The Economist writes about "The Kindness of Crowds" with empirical data extracted from CCTV footage in UK here. The conclusions drawn are around crowds, voilence and its self management only.

The point to note is that the data shows crowds alleviating volatile situation through external intervention by a by-stander in most cases. Should the by-stander be considered part of the crowd? I do not think so. A by-stander chooses to help or not help.

Please see my previous post "Debunking "Wisdom of Crowds" Myth - Two Examples" here.

10 Google Power Search Tricks

Fast search tricks for Google, click here.

USA - 25% Market Losses in 2 months?

Friend Mr. Brian Wade forwards an article fromt the Wall Street Journal discussing why the market has dropped 25% in the last two months here. The article asks the question below and answers it:

"So what has happened in the last two months? The economy has received no great new outside shock. Exchange rates and other prices have been stable, and there are no security crises of note. The reality of a sharp recession has been known and built into stock prices since last year's fourth quarter."

China - Zero Taxation on Exports?

Friend and colleague Mr. Tony Tsai, currently Chief Executive Officer - BHG Retail Innovation Institute and Executive VP Operations - The BJ Hualian Hypermarket Co. forwards impactful business news from China:

"Liao Xiangqi and Zhang Zhigang, former vice directors of the Ministry of Commerce, and Zhang Xiaoji, director general of the Foreign Economic Relations Department of Development and Research Center under the State Council, put forward a joint proposal about further expanding the product range covered by the export tax rebate and making zero export duties a reality. Chinese export-oriented companies account for 40% of total employment. If 10% of them close, approximately 10m people would lose their jobs. If the government hopes to increase employment, it should ensure the growth of the export market."

Arab Brands?

"There are no strong, Arab brands. Dates could have been the best brand. When you think chocolate, you think Switzerland and Godiva, ... But which brand do you think of when you say 'date'?"

So states my friend Mr. Abed Bibi, Managing Partner Wolff Olins, based out of Dubai. Bold statement while being true. Read further insights from Abed at Media Week Middle East here from pages 12 to 13.

I would like to provide a counter point with one specific example, Arabs are the only ethnic group that continues to wear their customary clothing when engaged professionally or politically even outside of the region. That is identity in itself.

Abed does believe Dubai to be a brand, while stating:

"Dubai is a lot more than what's the largest or the biggest. It's about the people, the traditions, the culture, the values, the hospitality..."

I would add something more tangible for the consumer of Dubai i.e. its visitors, its citizens, its laborers, etc. - Dubai is a megalopolis (and growing) without the crime or close to none. This cannot be stated of just about any other major city in the world. Powerful!

Consumer Insights - Retaliation to Facebook

An article in Gulf News here states:

"Facebook, which received some negative publicity locally yesterday with reports of a gang in Sharjah (an Emirate in UAE) threatening to post compromising videos on the social networking site unless ransom money was paid, is just one of many social networking sites losing its gloss."

Facebook is a democratization play, where consumer is "truly" the boss. One has to wonder as to the reason behind Facebook's policy change. Internet based businesses may focus marketing to a specific consumer (demographic, geographic, socio-graphic, etc.) - Yet it may be inappropriate to the sensibilities of a distant culture garnering responses that are detrimental to the brand.

I believe this creates an exceptional business development opportunity for marketers of the world.

Consumer Insights - iPhone Not a Hit in UAE

Interesting review of how consumers think about the iPhone in the Gulf region. See video of various interviews regarding the iPhone here.

Highlights from the conversations in the video are that pricing always plays an important role. Bridging the perception gap is an essential part of marketing, for example - In the video, a perspective consumer states how it is difficult to text using the iPhone. In reality, that is not the case. The mobile service provider Etisalat perhaps missed an opportunity here to touch the consumer on the specific need a mobile device fulfills for them - communication over text messaging.