NIELSEN

BREAKTHROUGH
INNOVATION
REPORT
2016 SOUTHEAST ASIAN EDITION

2016 SOUTHEAST ASIAN EDITION

 W E L C O M E

1 THE NIELSEN BREAKTHROUGH INNOVATION REPORT


JOHAN VRANCKEN
Managing Director
Nielsen Innovation Practice
Growth & Emerging Markets
LET TER FROM
THE AUTHORS
Welcome to the second edition of the Nielsen Southeast Asia
Breakthrough Innovation Report.
Nielsen began this journey five years ago in North America where our
first Breakthrough Innovation Report launched in 2011. Since then, we
have launched the report in Europe, India, China and Southeast Asia.
Globally, we have logged thousands of hours of analysis, interviews, and
conversations with industry leaders to uncover the secret to achieving
true innovation success. The Breakthrough Innovation Report celebrates
what truly represents best-of-breed innovation success stories.

The Southeast Asia Breakthrough Innovation Report evaluates new

products launched in more than 160 product categories, representing
71% of annual consumer packaged goods sales across Indonesia,
Thailand, Philippines, Vietnam and Malaysia. Our rigorous review
RUCHI BALLAL
Director process centres around three key criteria: distinctiveness, relevance and
Nielsen Innovation Practice endurance. After reviewing 12,920 new consumer products launched in
2013 through their first 24 months of shelf life to the end of 2015, we
name the 10 best-of-breed breakthrough product innovations and shed
light on what makes these innovations stand out from the crowd.

Our extensive analysis reveals that, for any brand to achieve true
breakthrough innovation success, it is critical to seek opportunities
to disrupt category norms, leverage analytics to unearth genuine
opportunities, create a process to fit an innovation, not the reverse, and
make execution a central focus rather than an afterthought. And in order
CECILIA LV to succeed in all of these areas, consumer insight and analytics play a
Senior Manager
fundamental role in guiding early stage exploration and pivoting along
Nielsen Innovation Practice
the innovation journey to make your new product better, stronger, bolder,
bigger and, ultimately, to achieve breakthrough innovation success.

Copyright © 2016 The Nielsen Company 2

 CONGRATUL ATIONS

NIELSEN
2016

BREAKTHROUGH INNOVATION
WINNERS

GARNIER SAKURA WHITE DOWNY PARFUM REXONA INVISIBLE DRY

THAIL AND COLLECTION MYSTIQUE INDONESIA
PG 29 THAIL AND AND PHILIPPINES

MR. KESO EC CRUNCHY CHOCO FLAKES TEA+ OOLONG TEA

PHILIPPINES PHILIPPINES VIETNA M
PG 31 PG 27

MOUNTAIN DEW FA MI CANXI AQUARIUS

VIETNA M VIETNA M VIETNA M

= SEE WINNER SPOTLIGHTS

3 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

 FUTURE CONTENDER1

KITK AT GREEN TEA ,

M AL AYSIA

THE MAKING OF WINNERS:

NIELSEN BREAKTHROUGH
INNOVATION CRITERIA

DISTINCTIVENESS
Deliver a new value proposition to the market. Ingredient
reformulations, repackaging, size changes, repositioning,
and other minor refinements to existing brands are excluded.

RELEVANCE
Generate significant year-one sales.

ENDURANCE
Achieve at least 90% of year-one sales in year two. This
measure confirms a sustained level of consumer demand while
allowing for some decline in revenue during the transition from
trial to adoption.

Copyright © 2016 The Nielsen Company 4

SOUTHE A ST A SIA
MARKET OVERVIEW
THE FMCG LANDSCAPE FOR YOUR NEXT BREAKTHROUGH INNOVATION
THAILAND | 101 (-4)
4.1%
MALAYSIA | 87 (+7)
5.1%
INDONESIA | 119 (+2)
10.7%
How to read:
COUNTRY | NIELSEN CONSUMER CONFIDENCE INDEX Q2 2016 (+/- change since Q1 2016)
FMCG Nominal Value Growth % MAT Q2 2016
Source: Nielsen Quarter By Numbers, Q2 2016
Amidst a global environment of sluggish economic
growth, dampened consumer confidence and
concerns over commodity prices and political
stability, Southeast Asia continues to shine on
most companies’ radar, thanks to a combination of
factors such as population size, increasing spending
capacity and relatively buoyant economic growth.
With strong economic growth and low inflation,
Philippines has the most confident consumers in
the region. The FMCG industry continues to ride
this wave with high growth particularly evident
in convenience categories such as ready-to-drink
beverages and confectionery, which are attracting
significant attention from manufacturers.
Indonesia and Vietnam also register on the radar
of senior leaders across the region as priority
markets to invest in over the next five years.
Indonesia has been on the road to recovery since
5 THE NIELSEN BREAKTHROUGH INNOVATION REPORT
THE PHILIPPINES | 132 (+14)
7.1%
VIETNAM | 107 (-2)
4.8%
the second half of 2015, with both economic
growth and consumer sentiment showing signs
of improvement. Indonesia is enjoying the
fastest FMCG-sector growth in Southeast Asia,
highlighting consumers’ positive outlook and
willingness to spend. While growth has slowed
dramatically in Vietnam, the country’s young,
aspirational and increasingly connected consumer
base showcases a market where consumers’ lives
are improving every day, and where aspiration for
new experiences is growing.
Thanks to low inflation, Malaysian consumers are
growing more confident about the future and their
willingness to spend is increasing. While Thailand
consumers remain cautious about the economy,
the FMCG sector continues to grow at a moderate
pace. The growth of the convenience channel
in Thailand taps into consumers’ busy lifestyles
where they continue to seek products and services
that deliver value and convenience.
 FIVE EMERGING TRENDS INFLUENCING
FMCG INNOVATION SUCCESS

A look across Southeast Asia reveals five

converging themes which will influence the success
D E M A ND FO R of innovation in the region in the years to come.
A FFO R DA B LE LUXU RY

EM E RG E N CE O F
H OM EG ROWN COM PA NIE S

CO N V E NIE N CE

E VO LU TI O N O F TH E
CO NNEC TE D CO N S UME R
HE A LTH A ND
WE LLN E S S

Copyright © 2016 The Nielsen Company 6

 KEY TRENDS IN SOUTHEAST ASIA

1. DEMAND FOR AFFORDABLE LUXURY

With rapidly expanding disposable income and a willingness to spend, consumers across Southeast Asia
are looking for affordable products that will improve their lives and allow them to enjoy life’s smaller
luxuries. FMCG products provide an affordable channel for consumers to step into this “aspirational”
lifestyle, as evidenced in the premium FMCG segment which is growing at 21% year-on-year, compared
to 8% year-on-year growth across the mainstream FMCG sector.

Consumer sentiment reflects this trend, with close to three in five (56%) consumers in Southeast Asia
saying they are willing to pay a premium price for innovative new products, compared to just 43% globally2.

ASPIRING FOR BETTER LIVING, AT AFFORDABLE PRICES

I AM WILLING TO PAY
PRODUCTS AT
A PREMIUM PRICE FOR
AFFORDABLE PRICES
INNOVATIVE NEW PRODUCTS

GLOBAL
SOUTHEAST ASIA

51% 56%
43% 43%

Source: Nielsen Going Premium in Southeast Asia report, Oct 2015

One of 2014’s Breakthrough Innovation winners from Southeast Asia3, Japanese skincare brand Hada
Labo, was the first of its kind to launch a lower tier premium range in Thailand. While the positioning
was at the lower end of the premium tier, and pricing was relatively affordable, the brand’s image
was enhanced by consumers’ perception of Japanese products as being superior, and this perception
together with clever marketing contributed significantly to the brand’s success.

KitKat Green Tea, launched by Nestlé in Malaysia in 2015, is another example of a premium offering
that is relatively affordable to everyday consumers. The premium product image is supported by the
imported Japanese-quality ingredients and the Japanese-style brand communication and promotion
activities. Though priced at 50% higher4 than the category average, KitKat Green Tea is is perceived to
be affordable where the actual price of the product is not prohibitive for most consumers.

7 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

 KEY TRENDS IN SOUTHEAST ASIA

2. EMERGENCE OF HOMEGROWN COMPANIES

Across Southeast Asia, homegrown local and regional FMCG brands are going head-to-head with
multinational brands, and many are outpacing their multinational rivals on growth. Nielsen research
highlights a preference for local brands across Southeast Asia, largely due to factors such as
affordability and national pride, and almost three in five Southeast Asian consumers believe local
brands are most attuned to their personal needs and tastes. While in the past local players have
dominated traditional trade channels and multinationals have focused on modern trade channels, this
market dynamic is shifting and local players are growing at more than twice the rate of multinational
brands in the modern trade channel. Further highlighting this trend, consumer attitudes toward new
products are skewed to local brands, with more than half (52%) of Southeast Asian consumers opting
for local brands over global brands when it comes to trialling new products5.

BIG ON HOMEGROWN BRANDS

THINKING OF NEW PRODUCT PURCHASES,

I PREFER TO PURCHASE LOCAL BRANDS 52% 42%
OVER LARGE GLOBAL BRANDS SOUTHEAST ASIA GLOBAL

Source: Nielsen Looking To Achieve New Product Success report, June 2015

SHARE OF VALUE SALES WHY LOCAL PREFERENCE?

2012–2014 WHAT IS MOST IMPORTANT TO YOU WHEN
CHOOSING LOCAL OVER GLOBAL BRANDS?

BETTER VALUE
50%
VALUE FOR MONEY
SOUTHEAST ASIA
GROWTH %
NATIONAL PRIDE 37%

LOCAL 42 43 43 13% POSITIVE PREVIOUS

EXPERIENCE
27%
REGIONAL 8 8 9 23%
ON SALE/
PROMOTION 27%
GLOBAL 50 48 48 5%
SAFER
INGREDIENTS/ 26%
PROCESSING
Y1 Y2 Y3
ORGANIC/
ALL-NATURAL OPTIONS
22%
Source: Nielsen Go Glocal report, April 2016

Wardah, an Indonesian personal care manufacturer, is proving tough competition for multinationals, providing
consumers with a range of halal certified beauty care products designed to appeal to Muslim women. The brand’s
marketing strategy features women dressed in traditional attire, reinforcing its positioning as a local brand which
offers products developed with its consumers’ specific needs in mind. Further contributing to Wardah’s success, its
locally developed distribution network ensures its products are readily available to customers.

Copyright © 2016 The Nielsen Company 8

 KEY TRENDS IN SOUTHEAST ASIA

3. E
 VOLUTION OF THE
CONNECTED CONSUMER

Whether it is premium or value, multinational or local, one trend that resonates across Southeast Asia is
connectivity. With smartphone penetration increasing exponentially across the region, consumers have
information and purchasing power at their fingertips. Southeast Asian consumers are prolific users of
social media, and many look to online reviews to influence their product purchasing decisions and share
their experiences with others – one third of Southeast Asian consumers read online product reviews
before making a purchase decision6. Subsequently, companies in the region are increasingly leveraging
digital campaigns as an important part of their marketing mix when it comes to new product launches.
Brands are also creating social media content with strong social messages and impactful campaigns
encouraging consumers to share their brand experience more broadly on social media.

ONLINE RETAILING WILL BECOME THE NORM

PERCENTAGE AGREEING PERCENTAGE PL ANNING

THAT SHOPPING ONLINE TO BUY GROCERIES ONLINE
IS CONVENIENT IN THE NEXT 6 MONTHS

71% SOUTHEAST ASIA 16%

75% SINGAPORE 24%

74% PHILIPPINES 9%

72% THAIL AND 15%

72% VIETNAM 18%

70% MAL AYSIA 18%

64% INDONESIA 14%

Source: Nielsen The Future of Grocery report, April 2015

While consumers in Southeast Asia are flocking to social networks, ecommerce for FMCG is nascent but
growing fast. In this competitive retail environment, retailers and manufacturers must add value and
differentiate by providing digital tools to help consumers take control of their shopping experience while
also increasing sales potential. The most successful retailers and manufacturers are at the intersection of
the physical and virtual world, delivering a seamless customer experience.

9 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

 KEY TRENDS IN SOUTHEAST ASIA

4. HEALTH & WELLNESS

With growing access to information, consumers are increasingly aware of the impact their food and
beverage choices have on their health and wellness. Obesity rates in Southeast Asia are generally below
developed markets like the UK, US and Australia, however, prevalence is accelerating at an alarming
rate, which is serving to raise awareness. While exercise is the preferred method of losing weight for the
majority of Southeast Asian consumers, many are looking for fresh, natural and minimally processed
foods which meet the needs of their busy lifestyles.

WHAT’S ON THE NEW PRODUCT WISHLIST OF CONSUMERS?

PRODUCTS FITTING PRODUCTS MADE OF

A HEALTHY LIFEST YLE NATURAL INGREDIENTS

GLOBAL
SOUTHEAST ASIA

29% 28%
38% 36%

Source: Nielsen Looking To Achieve New Product Success report, June 2015

This trend is found not only in foods but also in personal care, where consumers are going back
to basics, seeking products with natural ingredients. Himalaya Herbals, an Indian pharmaceutical
company, is one such example which highlights this shift – the company launched an array of personal
care products, anchored on the herbal proposition, across Thailand and Indonesia and is successfully
creating a space for itself in the market.

Copyright © 2016 The Nielsen Company 10

 KEY TRENDS IN SOUTHEAST ASIA

5. CONVENIENCE

While once it referred to a store front, convenience now describes the way of life for many consumers
in Southeast Asia, and there is growing demand for products which make consumers’ lives simpler
and easier. It is becoming increasingly important for manufacturers to focus their innovation efforts on
products which deliver convenience to consumers, be it functional such as reducing preparation time, or
in its logistics such as delivery.

WHAT’S ON THE NEW PRODUCT WISHLIST OF CONSUMERS?

PRODUCTS THAT ARE CONVENIENT TO USE

37%
SOUTHEAST ASIA

26%
GLOBAL

Source: Nielsen Looking To Achieve New Product Success report, June 2015

With limited time available, consumers want a product that delivers on convenience without sacrificing
taste or benefits. W.L. Foods understands that Filipino consumers like to snack, especially when out
of home and on the go. Capitalising on this trend, W.L. Foods created EC Crunchy Choco Flakes, a
convenient mini pack size of breakfast cereal that moved the product category beyond the breakfast
table to an on-the-go snacking alternative.

11 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

 SEIZE THE MOMENT
Southeast Asian consumers have more disposable income than ever
before, are willing to spend, and are on the lookout for new products,
providing ripe market conditions for innovation.

LIKE IT WHEN PURCHASED A NEW

MANUFACTURERS PRODUCT IN THEIR
OFFER NEW PRODUCTS L AST GROCERY TRIP

GLOBAL
SOUTHEAST ASIA

W
NE

NEW 73% 73%

63%
57%

Source: Nielsen Looking To Achieve New Product Success report, June 2015

WELCOME TO

IN SOUTHEAST ASIA

Copyright © 2016 The Nielsen Company 12

 HOW DO WINNERS

The Breakthrough Innovation winners spent considerable time

to find the consumer struggle with existing products and their
compensating behaviours to determine the right “job” to be
done. Instead of conforming to existing category norms, the
winners challenged established category dynamics, disrupting
categories and establishing a new “playing field”.

13 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

Copyright © 2016 The Nielsen Company 14
 JOBS THEORY

WHAT’S A JOB? WHY ARE JOBS SO IMPORTANT?

A “job” is the progress that
an individual seeks in a given
circumstance.
The job to be done generates the
energy required for someone to
take an action, such as pull
a brand into his or her life or
develop a compensating routine.
While many of the jobs in our lives
have adequate solutions, successful
innovations resolve circumstances
of struggle and fulfill unmet
aspirations: they perform jobs that
formerly had only inadequate or
nonexistent solutions.
Because jobs occur in the flow of
daily life, the circumstance is the
essential unit of innovation work—
not customer characteristics,
product attributes, new technology,
or trends.
Understanding the job reveals
why (the cause) people purchase
and use products and services,
as well as why they sometimes
behave in ways that involve no
purchase at all (nonconsumption).
Innovation initiatives that are
organised to resolve well-
defined yet poorly performed
jobs proceed with purpose
and efficiency. Conversely,
initiatives untethered to specific
jobs lack meaning and proceed
haphazardly, if at all.
Viewing the marketplace through
the lens of consumers’ jobs to
be done, redefines categories
(typically far larger than
conventionally envisioned) and
reframes competitors (typically
more numerous and diverse than
conventionally considered).
Jobs Theory focuses the insight
process on the search for
circumstances of struggle,
unmet aspirations, and pools
of nonconsumption. Demand
Driven Insights identify poorly
performed jobs.
Jobs Theory creates a shared
purpose and common language
that facilitates communication
and integration across diverse
functional areas. A well-defined
job enables efficient development
as well as inmarket success.

DIRECTLY VERIFIABLE ELEMENTS INCLUDE:

CIRCUMSTANCE COMPENSATING BEHAVIOR

don’t want make just go

to go to hurry how big is the my own? without?
up! large again?

shop...
sigh.
$

it’s morning... it’s hot out... they always mess up my order... it costs too complicated... time consuming...
too much... don’t like waiting in line can never get the flavor right

Who, when, where

where Complication, compromise, trade-off, or struggle

Desired progress, outcome, 1. Buying and using a product that imperfectly performs the job
outcome, experience,
experience, or solution 2. Cobbling together a workaround
workaround solution
solution involving
involving multiple
multiple products
products
or solution
3. Nonconsuming
Nonconsuming compensatory
compensatory behaviour
behavior
Remember: Sometimes
Sometimes the
the struggle
struggle isis discernable and
and quite
quite clear;
clear; other
other times,
times, especially when
when
consumers have developed
consumers have developed compensating
compensating routines,
routines, the
the struggle
struggle isis far
far less
less obvious.
obvious.

WHAT DOES A JOB LOOK LIKE?

YOU CAN VISUALISE A CIRCUMSTANCE IN WHICH A JOB ARISES AS A SHORT STORYBOARD CAPTURING
ESSENTIAL ELEMENTS. SOME OF THESE ELEMENTS CAN BE DIRECTLY VERIFIED, AND OTHERS NEED
TO BE INFERRED AND VALIDATED.

15 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

 JOBS THEORY

REMEMBER!
•T
 he essential unit of
innovation work is the
consumer circumstance, not
product attributes, consumer
characteristics, or trends.
•B
 ecause the circumstance
exists before any innovation
enters the world, some
compensating behaviour must
be “fired” in order for a new
solution to be “hired.” For every
innovation initiative, managers
should know what will be fired
and why—the circumstance-
specific consumer criteria for
making choices.
•A
 s noted, all products can •B
 ecause jobs-based innovation
be viewed as services that systematically eliminates waste,
successfully resolve circumstances jobs-based innovation is lean
of consumer struggle. innovation. Risk tolerance is not a
quality of successful innovators.
• The
 “job spec” reveals the
benefit bundle that will perfectly • I nnovation risk is a function of
address the circumstance. failing to nail a poorly performed
The job spec is the innovation job. Risk level is independent of
blueprint. Identifying a job any investment requirements.
provides remarkable clarity to
•W
 hile technologies, priorities,
the innovation process, enabling
and daily routines evolve, jobs
bigger wins, faster development,
remain relatively stable over time.
and fewer misfires.

Breakthrough Winners are masters of understanding consumer

WANT TO SEE JOBS struggles and nailing down solutions that resolve them. Our
Spotlight section features stories of selected winners from Thailand,
THEORY IN ACTION? the Philippines and Vietnam, from companies operating globally and
locally. Their stories differ, but they all have something in common:
They nail jobs.

ELEMENTS THAT NEED TO BE INFERRED INCLUDE:

CRITERIA SOLUTION

is that
new? D
ICFFEEE

ia YS
CO D
ICFFEEE

ter WA ce
CO
DADY
ICFFEREEEDRINK
CO TO Y
AD
RE INK

i
DR
Y TO

r
AD
RE INK

c AL an
DR
TO
ICFFEE
CO

t
are ums
TO

ED
RE RIN

c
cir cific
D
AD K
Y

e
sp
Wow! It’s like they’ve
been reading my mind.

The criteria
The criteria that
that people
people apply
apply Thefunctional,
The functional,emotional,
emotional, Breakthrough Winners
Breakthrough Winners nail
nail poorly
poorly performed
performed jobs:
jobs:
in evaluating
in evaluating “job
‘ job candidates”
candidates’ andsocial
and socialdimensions
dimensionsofof Coffeehouse taste without the coffeehouse hassle.
(i.e., potential
(i.e., potential solutions).
solutions). benefitthat
benefit thatcollectively
collectively
constitutethe
constitute theideal
idealsolution
solution
Understanding the
Understanding the job
job
for
forthe
thejob:
job:the
the“job
‘ jobspec,”
spec,’
dramatically
dramatically reconfigures
reconfigures
ororblueprint
blueprintfor
forsuccessful
successful
category
category structure
structure and
and innovation.
innovation.
competitors.
competitors. ForFor aa given
given job,
consumers
consumers regularly consider
an
an array of solutions that
extends
extends well
well beyond
beyond aa given
given
store aisle –and
store aisle andoften
oftenbeyond
beyond
the
the store
store as
as well.
well.
Remember: criteria are always
circumstance specific.

Copyright © 2016 The Nielsen Company 16

 WHILE SIMPLE AND INSIGHTFUL IN THEORY,
FINDING THE UNDERLYING “JOBS” THAT
CONSUMERS NEED IN THEIR LIVES IS A
DIFFICULT CONCEPT TO PUT INTO PRACTICE.
Breakthrough Innovation winners found underlying consumer pain points and created innovations that
made consumers’ lives easier, often breaking existing category boundaries. There is no definitive way to
discovering the right “job” that is currently not met by category offerings. However, a number of winning
innovations found solutions that connected multiple consumer needs.

2 NON-CONSUMPTION : Identify
new usage circumstances for your category or
product | Creating a new usage occasion or product
application not only grows the brand but can change
the category landscape as a whole.

1 NON-CONSUMER: Appeal to the W.L. Foods understands that Filipino consumers

neglected consumer dissatisfied with current
offerings | If consumers are not satisfied with what
is currently on offer in the category, creating another
“me too” innovation will not suffice. Innovation that
stems from an unfulfilled need, an existing gap or
a problem in consumers’ lives is more likely to fill
that “category gap” and encourage trial. Consumers
feel compelled to purchase a product that meets
the untapped or unmet need, be it functional like
quenching thirst in a quick and convenient way,
or emotional such as the desire to relax or feel
pampered, or even social, like helping friends to
bond at a social gathering.
like to snack, especially when out of home and on
the go. By creating a mini pack size of consumers’
favourite breakfast cereals, EC Crunchy Choco Flakes,
W.L. Foods moved the product category beyond the
breakfast table to an on-the-go snacking alternative,
available at a lower price than usual snacks. By
offering a new pack size and position, W.L. Foods
extended the traditional category usage occasions to
open up new opportunities and take breakfast cereal
into a totally new consumption occasion.

When Suntory PepsiCo launched TEA+ Oolong7 Tea

in Vietnam, they knew they had tapped into a gap
in the ready-to-drink tea market. The category was
dominated by sweet, lemon-flavoured green tea – a
health compromise to make the product palatable.
Suntory PepsiCo changed the category dynamic
by creating a ready-to-drink product that is both
healthier and tasty with an authentic and well-
balanced tea taste – TEA+ Oolong Tea was born.
Read more about this in the Spotlight section.

17 THE NIELSEN BREAKTHROUGH INNOVATION REPORT


3 TRADE-OFFS : Uncover circumstances
where consumers are forced to choose between
unsatisfactory alternatives | Despite the myriad
of products available, in many categories
consumers say they are unable to find a product
which completely fulfills their needs. For
example, an iced tea that quenches thirst but
gets warm on a hot day, a healthy snack that
delivers on nutritional requirement but lacks
taste, or a sunscreen that provides adequate
sun protection but is sticky on the skin. Every
time a consumer makes a compromise when
using a product, there is an unmet need and an
opportunity for a breakthrough innovation that
will disrupt the category.
Copyright © 2016 The Nielsen Company
4 ACCEPTING THE DOWNSIDE :
Seek out categories where consumers are accepting
product limitations due to lack of choice | Despite
the myriad of products available, consumers
sometimes have to accept product limitations
when no alternative is available e.g. consider
the drowsiness that accompanies flu medicines!
Offering consumers a solution that provides the
same benefit without the negative consequence will
enhance consumers’ lives and satisfaction and be a
certain win for the manufacturer.
Unilever understands consumers’ compromise
when using standard deodorants – unsightly marks
that deodorants can leave on their clothes. With
the launch of Rexona Invisible Dry, Unilever solves
this problem by creating a product that leaves no
marks on clothes but retains the odour and sweat
protection benefits consumers receive from their
regular Rexona deodorants. Launching a product
that does not compromise on sweat and odour
protection, while ensuring no residue marks are left
behind, is the critical factor behind the breakthrough
success of Rexona Invisible Dry in Indonesia.
18
 ANALYTICS
MAXIMISE

OLD NEW
SCHOOL THINKING SCHOOL THINKING

Use analytics to validate ideas Use analytics to build ideas and make them better
and prevent “failure” in market

LEARN BUILD

HYPOTHESIS
IDEA
POSITIONING
CL AIMS
PRODUCT
PACKAGING
CREATIVE
PRICE
VARIETIES
MEASURE

Most companies use consumer research and
analytics to validate ideas and mitigate risks, and
eventually try to prevent product launch failures in
market. However Breakthrough winners embrace
a growth mindset; they use analytics not only to
mitigate risk, but also to maximise potential. Their
use of analytics enables them to strengthen ideas,
increase potential and ultimately succeed in market.
In creating TEA+ Oolong Tea, Suntory PepsiCo
undertook a rigorous innovation process over the
span of two years that involved team members
from all parts of the business. At least ten
consumer research studies were conducted to: i)
discover consumers’ unmet needs, ii) perfect the
product taste profile, iii) validate the packaging
and iv) refine the communication strategy.
Research and analytics tools were not only used to
validate ideas but also to strengthen concept and
maximise potential of the initiative.

19 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

FIT THE INNOVATION
It is important to recognise that there are two
kinds of innovations – the kind that keeps the
brand fresh and interesting in consumers’ mind
so business can be sustained in the competitive
environment; and the kind that breaks traditional
category norms and disrupts the category.
Companies need both kinds of innovations to
succeed. But it is key to understand the differences
between these two types of innovations and
that they require considerably different efforts,
investments, and processes to execute.
Innovations that continue to sustain and refresh
current business (e.g. line extensions; flavour
variations) typically align with standard processes
and priorities of established business practices.
These innovations leverage existing assets and
know-how, require relatively little investment,
demand little explanation to retail partners, and
Copyright © 2016 The Nielsen Company
provide a return measured in months, not years.
For these innovation types, the standard innovation
process from concept to launch is sufficient.
However, disruptive innovations tend to create
unfamiliar challenges for existing processes and
expertise. For this type of innovation, companies
should expect bigger capital expenditure and
sustained marketing support over time. It is
extremely difficult, if not impossible, to expect
disruptive innovations to flow through the same
processes and incentives as line extensions.
Companies should not try to force fit disruptive
innovations into existing processes; rather they need
to create a process to fit each unique innovation.
20
 EXECUTION

Innovating to appeal to a specific consumer circumstance or address an unmet need is critical, but launching a new
product into a cluttered and highly competitive landscape is difficult no matter how good the innovation. To ensure
consumer trial, every aspect of launch preparation is important.

Many marketers restrict their focus to product formulation, communication, and pricing when designing the
product mix and neglect the importance of execution in the brand’s story. Execution should not be an afterthought;
it should be considered from the outset of the product’s development as part of the full product mix. Product
details such as colour and even promotional activity can strengthen the product offering substantially, but only if
considered well in advance of the product’s launch, rather than as an afterthought.

1 STAND OUT FROM THE CROWD 2 BE CONSISTENT

The average human attention span is just eight
seconds. Every day, consumers are exposed to over
5,000 advertising messages8 . For products to survive in
today’s crowded and constantly connected environment,
standing out is key. Successful innovation catches
consumers’ attention, cuts through the clutter and
ensures every marketing dollar delivers maximum impact.
All Breakthrough Innovation winners this year have
showcased what it takes to stand out from competition.
Mr. Keso (a savoury candy) stands out from the crowd
not just for its bold and unique flavours, but also for
the memorable jingle in the brand’s advertisement.
The catchy tune and the appealing visuals of creamy
cheese flowing out of the candy shell, coupled with
the unique taste of the product, plays to consumers’
senses – sight, taste and sound. Read more about this
in the Spotlight section.
The unique black packaging of Downy Parfum
Collection Mystique (a fabric conditioner), instantly
pops on retail shelves communicating a premium
and alluring product with its luxurious black
masquerade-themed packaging design clearly
differentiated from other competitive products that
predominantly feature light-coloured packaging
with flowers or smiling families.
Consistency in execution that ensures consumers are
exposed to the same product messaging across all consumer
touchpoints, is pivotal to success. Modestly successful
product launches usually address one or two marketing
touchpoints. Breakthrough winners design their product mix
to deliver a 360 degree consumer experience, resulting in
an outstanding brand platform that reinforces the brand’s
position across all touchpoints.
In Thailand, Garnier Sakura White’s advertising promises to
bring pinkish radiance to consumers’ skin with the power of
sakura9 extract. This “pinkish radiance” benefit is consistently
enforced across every consumer touchpoint, from advertising
to packaging, PR, point-of-sale and digital, particularly
through the use of color. For example, the packaging
heightens the messages through a pink jar and sakura flower
graphics on the box and the designs are aligned across the
whole range of products. Supporting public relations events
further endorsed the message through local presenters with
radiant pinkish skin dressed in light pink outfits. Read more
about this in the Spotlight section.
Downy Parfum Collection Mystique advertising promises “a
mysterious fragrance every day”. This positioning is reinforced
via its packaging and point-of-sale material using a black
masquerade-themed design. Sampling activity in the form of
fragrance balls allows the consumer to test the fragrance as they
would a fine perfume which reinforces the premium connection
to the consumer as the advertising message promises.

Market execution is pivotal to the success of product innovations and must be planned from the outset of the
innovation cycle and not after the product is on its way to stores!

21 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

ACHIEVING
BREAKTHROUGH
INNOVATION SUCCESS
Breakthrough innovation doesn’t occur by chance. Brands which achieve true innovation success build
discipline into their innovation process, forge an open and risk-taking culture, and enlist insight and creativity
to guide innovation thinking. They are challenging established category dynamics rather than conforming to
them. They consider emerging trends, but don’t follow them blindly.

By following a few key guidelines you’ll gain critical insight on consumer behaviors, attitudes and shopping
habits to guide your innovation efforts:
- Challenge established category dynamics rather than confirming to them to disrupt the category
- Use analytics to maximise the opportunity, instead of just validating them
- Create a unique process to fit the disruptive innovation
- Execution should be a focus and part of the product’s story, not an afterthought

Copyright © 2016 The Nielsen Company 22

 W I N N E R
S P O T L I G H T S

23 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

 SPOTLIGHT #1
TEA+ OOLONG TEA

SPOTLIGHT #2
GARNIER SAKURA WHITE

SPOTLIGHT #3
MR. KESO

Copyright © 2016 The Nielsen Company 24

 SP OTLIGHT #1

TEA+
OOLONG TEA
FINDING THE BLUE OCEAN 10 THROUGH
UNDERSTANDING THE NON-CONSUMERS

TEA+ Oolong Tea is by far the most successful product launch reviewed for this year’s
Breakthrough Innovation Report. It is the first oolong tea in the ready-to-drink tea
category in Vietnam. It reached 10% market share11 in its first year and expanded the
overall category, while other products in the category struggled to maintain sales. The
success of this Breakthrough winner did not come by chance. In creating TEA+ Oolong Tea,
the Suntory PepsiCo team undertook a rigorous innovation process over two years that
involved functions from across all parts of the business. At least ten consumer research
studies were conducted to discover consumers’ unmet needs, to perfect the product taste
profile, to validate the packaging and to refine the communication strategy.

25 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

Suntory PepsiCo discovered that while Vietnamese
consumers are becoming increasingly health-
conscious, they do not want to compromise on
taste. The ready-to-drink tea category in Vietnam is
dominated by lemon-flavoured green tea which is
both sweet and sour. Suntory PepsiCo uncovered
the potential to offer a healthier product that is
less sweet but with a more authentic tea taste
for the increasingly health-conscious Vietnamese
consumer. Suntory PepsiCo identified this blue
ocean opportunity and launched a new tea in the
category. Importantly, the product proposition
is based on two differentiated selling points: the
first is the naturally occurring OTPP (Oolong Tea
Polymerized Polyphenols), extracted from oolong
tea that helps to prevent fat absorption from food;
and the second is the unique oolong mild tea taste
which is lighter than traditional ready-to-drink tea
products. The idea of “feeling light”, as opposed
IN CREATING TEA+ OOLONG TEA, THE SUNTORY
PEPSICO TEAM UNDERTOOK A RIGOROUS INNOVATION
PROCESS OVER TWO YEARS THAT INVOLVED FUNCTIONS
FROM ACROSS ALL PARTS OF THE BUSINESS. AT LEAST 10
CONSUMER RESEARCH STUDIES WERE CONDUCTED TO
DISCOVER CONSUMERS’ UNMET NEEDS, TO PERFECT THE
PRODUCT TASTE PROFILE, TO VALIDATE THE PACKAGING
AND TO REFINE THE COMMUNICATION STRATEGY.
Copyright © 2016 The Nielsen Company
to bloated or heavy, immediately resonated with
Vietnamese consumers, and ultimately became
the key focus of the communication. The two
well-defined product differentiators, combined
with a balanced taste profile, were key to the
product’s success. TEA+ Oolong Tea also has a
premium image that is supported by Japanese tea
quality, but it is available at an affordable price for
mainstream consumers.
Following TEA+ Oolong Tea’s successful launch
into the market, a number of competing brands
launched similar oolong tea offerings, but with
little success. Suntory PepsiCo’s investment in
quality technology enabled it to produce a high
quality oolong tea product. This optimal quality,
combined with a recipe which appealed to Vietnam
consumers’ tastes, resulted in a product offering
which its competitors were unable to match.
26
 SP OTLIGHT #2

GARNIER
SAKURA WHITE
LEVERAGING NATURE TO ADDRESS CONSUMER
NEED, SUPPORTED BY 360° EXECUTION

Garnier is a brand which is founded on being inspired by nature. This positioning

has guided Garnier’s product development and innovation efforts toward techniques
which leverage natural ingredients. It is through this focus that Garnier identified an
opportunity to harness the natural healing elements of sakura, a flower that blossoms
only seven to fourteen days a year and is appreciated by many Asian cultures as a symbol
of the transient nature of life. Garnier also cares deeply about consumer needs. Upon
uncovering Thai women’s desire to have not just fair, but pinkish complexion and pore-
less skin, Garnier tapped into this need gap in the market to create a product that is
gentle yet effective in achieving the ultimate pinkish fair skin with a pore-less look.

27 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

Garnier Sakura White promises to bring pinkish
radiance to consumers’ skin while minimising
pores. The product’s positioning and messaging
is carried consistently across every consumer
touchpoint, from advertising to packaging,
public relations, point-of-sale, and digital
communications, particularly through the
consistent use of colour. The packaging heightens
the message through a pink jar and sakura flower
graphics on the box. The designs are aligned
across the whole range of products from facial
foam, moisturiser, to facial mask. Public relations
events further reinforce the same message through
local presenters with radiant pinkish skin dressed
in light pink outfits. The consistent delivery of its
message strengthens the marketing execution and
makes every marketing dollar work its hardest.
GARNIER SAKURA WHITE PROMISES TO BRING PINKISH
RADIANCE TO CONSUMERS’ SKIN WHILE MINIMISING
PORES. THE PRODUCT’S POSITIONING AND MESSAGING
IS CARRIED CONSISTENTLY ACROSS EVERY CONSUMER
TOUCHPOINT, FROM ADVERTISING TO PACKAGING,
PUBLIC RELATIONS, POINT-OF-SALE, AND DIGITAL
COMMUNICATIONS, PARTICULARLY THROUGH THE
CONSISTENT USE OF COLOUR.
Copyright © 2016 The Nielsen Company
With the average Thai consumer spending 23
hours online per week 12, digital advertising was
also leveraged heavily throughout the campaign. In
2015, Garnier Sakura White launched a campaign
offering “the Unlimited Longest Selfie Stick” so
that “You’ll never have to show your large pores
in your pictures again”. The campaign aimed to
capture the selfie-loving culture of Thai young
consumers, and the campaign web film generated
almost three million views on YouTube. The
Garnier team attributes part of the success of
Garnier Sakura White to the digital campaigns
which resonated with Thai consumers and created
significant social media buzz about the brand.
Overall, the consistent delivery of key visual cues
and messaging across all elements of the product
launch was a critical component in the strength of
Garnier’s marketing strategy and execution, and
ensured maximum return on investment.
28
 SP OTLIGHT #3

MR. KESO
INSPIRED BY AND CREATED FOR
THE EVERYDAY CONSUMER

Mr. Keso is the first savory candy with cheese filling in the Philippines introduced
by Rebisco, a prominent local player in the snack food industry. Rebisco has
over 50 years of experience producing quality biscuit and snacks for Filipino
consumers. Mr. Keso is part of Rebisco’s Mr. Candies range, the first range of
candies from Rebisco aimed at adults.

29 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

Filipino consumers love to snack and many claim
to crave specific snack foods at different moments
of the day. Mr. Candies are based on traditional
and local flavours, and are designed to appeal
to these different taste cravings. The idea of a
savoury candy with cheese filling was inspired by
consumers’ everyday snacking behaviour when
pairing flavours. It is typical for Filipinos to pair
sweet and salty flavours such as unripe mangoes
with salt or shrimp paste, sweet glutinous rice
desserts with salty dried fish, or cheese with
sweet desserts. Inspired by this pairing behaviour,
Rebisco’s marketing, research and development,
and consumer research teams set out to find
the ideal flavour combination for the next Mr.
Candies variant. Months were spent observing
local snacking trends, speaking to consumers,
brainstorming new flavours, and testing flavour
combinations, all of which influenced the new
sweet-savory cheese-filling candy.
This product performs two jobs in consumers’
everyday lives: it makes snacking moments more
interesting by offering a unique and delightful
combination of f lavours; and it fulfils consumers’
craving of creamy cheese during the day with
conveniently packaged candies. Rebisco is
renowned for its catchy product jingles, and
stuck to this tried-and-tested formula to launch
Mr. Keso to the market. Despite a limited media
budget, the advertising campaign was highly
effective in achieving cut-through and standing
out from the crowd, ensuring the product was
top-of-mind for consumers.

INSPIRED BY THIS PAIRING BEHAVIOUR, REBISCO’S

MARKETING, RESEARCH AND DEVELOPMENT, AND
CONSUMER RESEARCH TEAMS SET OUT TO FIND THE
IDEAL FLAVOUR COMBINATION FOR THE NEXT MR.
CANDIES VARIANT. MONTHS WERE SPENT OBSERVING
LOCAL SNACKING TRENDS, SPEAKING TO CONSUMERS,
BRAINSTORMING NEW FLAVOURS, AND TESTING
FLAVOUR COMBINATIONS, ALL OF WHICH INFLUENCED
THE NEW SWEET-SAVOURY CHEESE-FILLING CANDY.

Copyright © 2016 The Nielsen Company 30

 Learn more about the Breakthrough Innovation initiative at www.nielsen.com/breakthrough.
Explore more content on a variety of innovation topics at www.nielsen.com/innovation.

FOOTNOTES
1.  Future Contender: the innovations under ‘Future Contender’ are new product launches that are launched after
the review period of this Breakthrough Innovation report hence have not yet completed 2 years of sales in
market however are showing promising signs to be a Breakthrough Innovation Winner in the near future. KitKat
Green Tea, launched in Malaysia in August 2015 by Nestlé, is only in the market for one year but shows signs of
being a potential Breakthrough Innovation winner in the future
2. Source: Nielsen Going Premium in Southeast Asia report, Oct 2015
3. Source: Nielsen Breakthrough Innovation Southeast Asia edition report, December 2014,
 he price of KitKat Green Tea compared to the chocolate category is calculated based on average price per unit.
4.  T
Source: Nielsen Retail Measurement data analysis, Malaysia 2016
5. Source: Nielsen Go Glocal report, April 2016
6. Source: Nielsen The Future of Grocery report, April 2015
7. O olong tea is a type of Chinese tea that takes oxidised tea leaves and then steams or roasts them to halt the
oxidation process. It is a popular type of tea drank in China and Japan
8. Source: http://www.nytimes.com/2007/01/15/business/media/15everywhere.html?&_r=0
9. Sakura refers to the cherry blossom, the national flower of Japan
 lue Ocean refers to uncontested market space, as argued by Professor W. Chan Kim in the book Blue Ocean
10. B
Strategy. https://en.wikipedia.org/wiki/Blue_Ocean_Strategy
11. T he market share of TEA+ Oolong Tea in Vietnam is the value share it achieved by July 2014 in Urban Vietnam
covering the 6 major cities. Source: Nielsen Retail Measurement data analysis
12. Source: Nielsen Cross Platform report, 2014

SPECIAL THANKS TO THE 2016 BREAKTHROUGH INNOVATION PROJECT TEAM

Nicole Corbett, Sivaraman Yegnaraman, Kang Eng Lee, Rishabh Singh, Lovenish Ruhela, Clarina Heng and
Sharmaine Ng.

31 THE NIELSEN BREAKTHROUGH INNOVATION REPORT

 DISCLAIMER

The information contained in this report is based on compilations and/or estimates representing
Nielsen’s opinion based on its analysis of data and other information, including data from sample
households and/or other sources that may not be under Nielsen’s control. Nielsen shall not be
liable for any use of or reliance on the information contained in this report.

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33 THE NIELSEN BREAKTHROUGH INNOVATION REPORT