The Executive Times (ET): You have a number of products or brands. What factors do you consider before launching a new product?
Nowshad Karim Chowdhury (NC): At Unilever, any new product innovation is a consumer driven process whereby creative marketing and relevant technology leads to new and different products. We consider a number of factors, namely: consumer need for the product; our capability to offer a product to meet those needs; development of the particular category in Bangladesh; other country experiences in the same category etc.
ET: How do you identify the need for a new product?
NC: Our marketers are always vigilant about new product innovation opportunities, be it extension in a category we already operate in or entry into a completely new category. We carry out a number of quantitative and qualitative consumer immersion programs on a regular basis. This helps us enhance our understanding of Bangladeshi consumers and their needs leading to new product ideas. As an operating company of a global Unilever, we can also choose and evaluate new product ideas from the product portfolio that Unilever offers across the globe.
Unilever has an Innovation Management Process where every new idea goes through four different phases:
1. Idea: This is the stage where new product ideas and concepts are tested/evaluated
2. Feasibility: At this stage the product mix (formulation, packaging etc.) is locked
3. Capability: Communication campaign is developed and tested
4. Launch: The product is launched and monitored
During the launch of a product, the focus is on 'bringing the product alive in the consumer's mind'. The execution varies from category to category. Typical launch activities include: communication campaign on various media, experiential marketing activities, awareness drive at retail end etc.
ET: What factors are taken into consideration while deciding to make product extension?
NC: For all of our brands, there are global Unilever guidelines that outline the scope of each brand. We strictly adhere to these guidelines when deciding on product or brand extensions. However, this is heavily dependent on equity of mother-brand. When deciding on any brand extensions, we make sure that it should take something from the core and give something back to the mother-brand equity.
For example, Wheel Bar played an important role in developing the detergent category in Bangladesh. Leveraging the strong wheel mother-brand equity, wheel washing powder was launched in Bangladesh during the late 90's. This was one of the major successes of Unilever Bangladesh.
ET: What are the analyses that you do to ensure that the launching of a new product will not reduce the band value of other products or cannibalize the profits of an existing product?
NC: We carry out a special type of research called Simulated Test Market (STM) that helps us project volume and estimate cannibalization rates for a new product. If the test results are positive- i.e. the incremental impact is greater than the cannibalization impact-we go ahead with the launch.
For example, before launching Vim bar, we carried out STM putting it against Vim powder. The results were positive and we launched the product.
ET: Having too many products of similar kinds can be confusing to customers. How do you make sure that these products have clear differentiations?
NC: Consumers and their needs are of topmost priority in every decision that we take. Each brand is positioned to address a specific consumer need. When we have more than one Brand in a particular category, we ensure clear differentiation in proposition based on consumer needs. For example, in Toothpaste, the two most sought after benefits are germ-free mouth and fresh breath. We have two distinct brands addressing these two needs: Pepsodent with germi-check proposition and Close Up with fresh-breath confidence promise.