© Description This is a logo owned by Parmalat for Parmalat. Source The logo is from the http://www.parmalat.ca/ website. Retrieved Feb 15, 2017
Role of Innovation in Consumer Packaged Goods
Developing innovative products for consumers is considered as one of essential marketing functions at Parmalat. Product innovation usually plays an important role in life cycle of any consumer packaged goods company. Innovation is tasked to drive incremental volume for the company, keep consumer delighted with its products and provide retailers with increased profits opportunities. In Food Industry, major players, such as Parmalat, are literally expected to come up with new products every year to inject news and dynamics to the category and “protect” their shelf space at retail.
As Food is considered to be a mature consumer industry, innovation dynamics is different from revolutionary innovation pace of high tech industry with consumer expectation of radically new products driven by emergence and evolution of new technologies. A great deal of innovation in Food is driven by line extensions of established products (e.g., Coke Zero), packaging innovation ( a bag with a zipper to preserve cheese freshness) and size innovation (e.g., snacking formats – Black Diamond Cheese Sticks).
Long term focus for Innovation Development
At Parmalat, innovation development is based on 3-5 year horizon of annual new product development. This longer planning cycle is needed to properly assess long term industry, consumer and competitive trends to ensure that new products would anticipate emerging consumer needs and provide distinctive point of difference vs. competition. At Parmalat, any product idea is going through a rigorous process of five stages of Innovation Process:
- Market launch.
The process is designed around the concept of the innovation funnel when multitudes of new product ideas are being refined by the innovation cross-functional teams through key decision gates.
Social Media is an Emerging Innovation Contributor
Social Media and different forms of on-line consumer research are playing an increasingly important role in identifying new trends and generating product ideas for Parmalat. One of the examples of using social media for new product ideas generation is the “New Ideas” portal recently added to the company’s Intranet. Employees have been very enthusiastic in providing their new product ideas and reviewing and voting for the best ideas on-line. The most popular ideas are then further investigated by respective Marketing Teams and presented to the Innovation Committee. The program is supported by the HR department which helps to administer participants’ inputs and progress them to the presentation ready stage.
Innovation Brainstorming Sessions
Employees’ ideas generated on the “New Ideas” portal are also feeding into a larger annual corporate innovation event – Parmalat Innovation Day. The Parmalat Innovation Day is a one day-off site event for representatives of major functional departments such as Operations, Supply Chain, Sales, Category Management and Marketing. On a typical Innovation Day, the cross-functional team will get a briefing on new consumer/industry trends, review existing ideas from employees, case studies of global and competitive innovation from different part of the globe and will come up with a short list of new product ideas selected for further development.
External Social Media for New Product Ideas
Brand’s pages at Facebook and consumer relations contacts are also leveraged as source of new product ideas. Consumer’s feedback and questions sometimes provide valuable information and unique insights into consumer needs. For example, questions about cheese storage helped to drive more convenient types of packaging (e.g., resealeables and ways to preserve cheese freshness).
Lessons for Others
- Annual launch of “innovation” and new products is essential for competing in Food Industry
- Innovation is comprehensive and long-term process for large corporate players
- Social Media is emerging contributor of innovative ideas from both internal and external audiences
Industry: Food Consumer Packaged Goods
Name of Organization Contact: na
Authored by: AB
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