Interview: Phil Roos, Managing Director, GfK Strategic Innovation
We’ve all shopped for groceries. It’s part of our daily, weekly or bi-monthly routine. We may experience shopping either as a mundane routine to be endured, or as some in our office have confessed, a fun and relaxing “event.” We all have brands that we buy regularly, others we don’t like and still others that we are willing to try out. Our decisions for the brands we buy can be shaped by word of mouth, trial and error, and advertising and packaging. Products might tout a newly added ingredient (“New and Improved!”) or position themselves with price versus value, nutritional benefits or some other determiner that’s important to us. Some on our staff have even bought products based solely on how cool the package design is—but of course designers are not your typical demographic consumer group!
As we reach for that can of green beans, jar of facial cream or box of breakfast cereal, we may not be aware of all the brainstorming, research and marketing that goes on in support of the products we buy.
This past year a local brand innovation firm, The Arbor Strategy Group (ASG), was acquired by GfK, the world’s fourth largest marketing research firm, and is now known as GfK Strategic Innovation, GfK’s global innovation practice area. The company helps their clients address a variety of growth issues through strategic brand innovation by utilizing a process of identifying relevant, high-potential market opportunities and developing successful new concepts and products to fill those spaces.
GfK Strategic Innovation’s Phil Roos has agreed to share with us about his own background, some insights regarding product branding, and how his company does what it does.
Hile Design: Hi Phil, thanks for taking time to speak with us. For starters, please tell us about your own professional background and how you ended up founding ASG.
Phil Roos: I have a strange background. I started as a CPA, but never actually practiced the craft, and decided instead to go into marketing. I was in brand management at Quaker Oats, where I worked on granola bars and cereals, and I ran the Gatorade business as my last assignment. Since then, I’ve been president of a cookie and snacks company, head of marketing at Little Caesars Pizza, and held a similar position at a leading lawn and garden chain—with a couple of stints in consulting along the way. I have a resume only a consultant would love.
I started Arbor Strategy Group in 1998 as a boutique growth-strategy consulting firm. In 2001, we bought what we now call NewProductWorks, our innovation center located in Ann Arbor, Michigan. It contains the world’s largest physical collection of innovative new consumer products from around the world. We track every new product launch across 300-plus product categories globally, and procure samples of the most innovative for our collection. We also have a database and analytical interface of global new product launches that we use to understand patterns in how categories develop and what innovation will work at a given period in the category’s evolution. We have a tool called the Innovation Tree® that we use to predict what type of innovation will be successful in the future. That has transformed our business, as we now have a way to make disruptive innovation predictable. We now can truly show clients how we can help them to “See the Future” and “Be the Future”—to figure out where the big opportunities of the future are, and then develop winning ideas that will help them capture those opportunities.
We were recently acquired by GfK, which has allowed us to truly apply our knowledge on a global footprint, as GfK has offices and local expertise in over 100 countries.
HD: Wow, you’re right, that’s quite a resume. And I wonder how you stay so fit and trim while working with all those snacks, cookies and pizzas? You must have strong willpower!
I remember the first time I visited your office (which is very cool) here in Ann Arbor. When I walked in and saw your NewProductWorks, I thought I’d entered a grocery store! It’s really fun and informative to select a product from the collection and see its marketing history expressed through its various packaging and messaging over the years. I also enjoyed seeing products and packaging from different parts of the world—fascinating.
Speaking of packaging, share with us what makes for an effective brand, and how do consumers’ buying habits affect the messaging of a brand?
PR: The most successful brands are able to connect with consumers’ emotional needs. This is particularly true of brands that cross multiple categories. They “own” a consumer emotional space that allows them to transcend the dynamics of different categories. Beyond emotional benefits, what is critical is that the brand backs that up with the product features and functional benefits that are right for a particular point in time. Consumer emotions don’t change much, but the features and functional benefits they see as addressing those needs change all the time. Hitting the market with the right message and product bundle at the right time is critical to success.
HD: Got it. I bet a lot of people reading this article don’t realize that emotion is a part of their buying process, but it is.
Does the process differ between rebranding an existing product compared to launching a new product?
PR: Truthfully, there isn’t much difference. The key is in understanding where the market and consumer are in their evolution, and delivering the right bundle of benefits to match the current and emerging needs. With an existing brand, you have the existing equity and baggage of the brand to fit into the equation. That means that whatever track you take in addressing the market opportunity needs to be approached through the lens of all of the good and bad that the brand brings to the situation.
HD: Yes, one brand that comes to mind in terms of consumer evolution is how Cheerios has adjusted its marketing message to position itself as more than just a nutritional cereal. With the aging of the U.S. population, it now includes messaging about its cholesterol lowering benefits.
You mentioned that one of the reasons that companies come to you is to help them determine future consumer buying trends. Can you share more about NewProductWorks (NPW), and how it is used in this process?
PR: NPW plays a key role both in “See the Future” (i.e. identifying the big future strategic opportunities for innovation) and in “Be the Future” (i.e. developing specific winning innovation concepts/ideas). In “See the Future,” the product collection and database are central to analyzing innovation patterns to determine “what’s next” in terms of successful innovation in a category or market space.
HD: I see. Can you share about the process of product ideation—that is, when your team and the client meet to work together? What does a day of ideation look like?
PR: Among other things, our consulting and client teams (and even consumers) “shop the collection” for inspiration from other categories, other parts of the world and other points in time (we have about 30 years of historical product categories, and I’m sure you’ve heard the phrase “there is no such thing as a new idea…”) to generate ideas for a market space or category in which they are trying to innovate.
HD: Can you share with us what you see as growth spaces within the grocery industry in the next 10 to 15 years?
PR: In our model, we think about there being four cornerstone consumer motivators that drive consumer interest in any given product or product category: Gratification, Wellness, Convenience and Safety. Gratification is where you’d find benefits like taste, indulgence and customization “for me”—anything that says, “I’m worth it”—and the other three motivators are probably pretty self-explanatory. There are many different dimensions of each (e.g. under Wellness, you can have Holistic Wellness, Prevention of Disease, Performance, etc.). We see a future with tremendous advancements against all of these drivers, as consumers look for ever more powerful ways of getting their needs met. We see particular advancements in Wellness and Safety. We expect to see many more food and grocery items that purport to prevent disease and to deliver an even higher order of wellness needs, such as giving you a sense of personal fulfillment and well being. In the Safety area, we expect continued advancements in the area of sustainability: from natural, to organic, to locally grown, to new and more advanced ways of “doing the right thing” for your community and the planet. It should be an exciting next decade.
HD: I’m particularly happy to see companies being more concerned about sustainability. Since our own firm creates packaging for several different industries I can say that this is at the forefront of much of today’s packaging. For instance, there are new blister plastics created from cornstarch, as opposed to petroleum-based chemicals. Although they aren’t quite as clear as the traditional petrol plastics, a lot of research is going into refining the new materials so that they are of equal quality, while being biodegradable.
As mentioned earlier, last year your company was bought by the German marketing research agency, GfK AG. Was selling the company that you founded a difficult decision to make, and could you describe the benefits that you’re seeing with the new relationship?
PR: Partnering with GfK was an easy decision for us—a natural given where we were in our growth trajectory. The innovation business is becoming increasingly global, and being part of GfK gave us the ability to much more easily serve large global clients across multiple geographies. GfK also brought other infrastructure benefits that would have been difficult for a company our size to build on our own. So, it was a good match.
HD: Sounds like it’s what you needed to do to stay competitive. We just hope your branch stays here in Ann Arbor. We like you guys.
Finally Phil, get innovative. If you were a brand of beer, would you be a pale ale, a lager or a fancy import?
PR: Beer, like every other consumer product, is occasion-driven. When I’m having a special “me moment,” I’m a super-premium Weiss beer. When I’m watching the Red Wings with my brother, Bud Light does just fine.
HD: Thanks Phil. We wish your company continued success, and we’ll be thinking of you next time we’re buying groceries. I don’t suppose you hand out savings coupons, do you? No, didn’t think so!
For more information about The Arbor Strategy Group (GfK Strategic Innovation) and NewProductWorks, visit Arbor Strategy’s website.