india-breakthrough-innovation -report-nielsen

INDIABREAKTHROUGHINNOVATIONREPORTFEBRUARY 2014Copyright © 2014 The Nielsen Company1

BREAKINGTHROUGHWITHINNOVATIONIN INDIABusinesses innovate or businesses die. It’s that simple. Successfulbusinesses stand out because they make innovation a priority andput their money where their mouth is. We’ve validated throughin-market performance that one of the few reasons why highgrowthFMCG companies in India stand out is because they investin innovation and make it work for them. This report presents thestory of the Breakthrough Innovation Winners. Given the long oddsand paramount importance of breakthrough innovation, our firstpurpose is to celebrate the winners – and in the pages that followwe’ll recognise high achievements. Second, we highlight someessential themes and takeaways that can help marketers improve theirinnovation performance and win in the Indian marketplace. Finally, wehave interviewed the winners to learn from their experience – enablingus to share their stories, discoveries, and transferable insights.India is considered by many as a hotbed of innovation. However,innovating successfully in India is far from easy. But, as this year’sBreakthrough Innovation Winners demonstrate, success is rooted inthree core principles of Demand-driven Innovation: demand-driveninsight, demand-driven development, and pervasive leadership.DEMAND-DRIVEN INSIGHTDEMAND-DRIVEN DEVELOPMENTPERVASIVE LEADERSHIPEach of the winners, while unique in their own right, exemplify thepower of embracing demand-driven principles, and some of theirstories are shared in greater detail in the Winner Spotlights section.There is, of course, no dearth of successful incremental innovations inIndia that generate compelling returns for their managers but this isour opportunity to celebrate the breakthrough innovations that stoodout by expanding their categories, delighting consumers, and creatingnew platforms for sustainable innovation.2 INDIA BREAKTHROUGH INNOVATION REPORT

THE MAKING OFWINNERSThis report is a distillation of our research of more than 14,500launches from more than 80 FMCG categories including food,personal care, household care, over-the-counter products and softdrinks in the Indian marketplace. For this report, we evaluatedproducts launched in 2011 – identifying 31 breakthrough winners. Tobe a Breakthrough Innovation Winner, a product needed to satisfythree requirements:RELEVANCE: Generate launch-year revenues in the top 0.5 percentilefor new FMCG launches in India (in the channels tracked by Nielsenin India). This corresponded to approximately INR 125 million in yearone sales at a minimum.ENDURANCE: This measure confirms a sustained level of consumerdemand after the launch year. Winners had to either double thelaunch year sales in months 13-18 or generate revenues in the top 0.5percentile at the 18 month milestone for all launches (correspondingto approximately INR 211 million at a minimum in the channelstracked by Nielsen in India)DISTINCTIVENESS: Deliver a new value proposition to the market.Our innovation experts excluded re-packagings, re-formulations, andre-positionings and ensured that distinctive offerings that abidedby demand-led principles and/or differentiated themselves withbreakthrough execution made the final cut.BUSINESSES IN INDIAHAVE THE CAPABILITYTO INNOVATE, YETWE DON’T SEE THATCAPABILITY TRANSLATEOFTEN ENOUGHINTO INNOVATIONSTHAT ARE PARADIGMCHANGERS – INMOST CASES WESEE INCREMENTALCHANGES, PRODUCTEXTENSIONS.NANDINI SETHURAMAN,CHIEF MARKETING OFFICER,WALMART INDIACopyright © 2014 The Nielsen Company3

CELEBRATINGTHE WINNERSThis year’s winners delivered a new proposition to the market,generated a threshold level of sales for their owners, and enjoyed asustained level of consumer demand beyond the launch year.CERELAC WHEAT RICEMANGO WITH DATES(Baby Food)NIPPO HI-TOP(Batteries)PARLE HAPPY HAPPY(Biscuits)PARLE FESTO(Biscuits)OREO VANILLA(Biscuits)BAKEFRESH(Biscuits)HORLICKS OATS(Breakfast Cereals)NESCAFE MY FIRST CUP(Coffee)BRU GOLD(Coffee)AXE PROVOKE(Deodorants)FOGG(Deodorants)KUSTODY(Deodorants)DABUR ALMOND HAIR OIL(Hair Oil)COMPLAN PISTA BADAM(Health Food Drinks)DEL MONTE JUICES(Juices & Nectars)LACTOGEN 4(Milk Food)MADHUSUDAN(Milk Powder)ALL OUT POWER SLIDER(Mosquito Repellent)BEST(Packaged Rice)BINGO TANGLES TOMATOTANGLE(Salty Snacks)BINGO TANGLES MASALATANGLE(Salty Snacks)STAYFREE ADVANCED(Sanitary Napkin)DOVE NOURISHINGOIL CARE(Shampoo)CLEAR COMPLETE ACTIVECARE(Shampoo)POND’S PURE WHITE(Skin Cream)OLAY REGENERIST(Skin Cream)VIVEL SANDAL GLOW(Toilet Soap)GODREJ NO. 1 SAFFRON& MILK CREAM(Toilet Soap)SENSODYNE RAPIDCOLGATE SENSITIVEMAGGI NUTRI-LICIOUSRELIEF(Tooth Paste)PRO-RELIEF(Tooth Paste)PAZZTA TOMATO TWIST(Vermicelli & Noodles)Source: NielsenSpecial feature in the winner spotlight sectionThese winners challenged convention and triumphed byexpanding or transforming categories – a breakthroughwinner hallmark. These winners racked up an averageof INR 340 million in their launch years and have set thebenchmark for FMCG innovation success in India.4 INDIA BREAKTHROUGH INNOVATION REPORT

SETTING ABENCHMARKFOR FMCGSUCCESSOur 31 winners toiled in their launch years and beyond to set up a newbenchmark for innovation success in the FMCG space. Marketers inIndia have forever struggled to find the right success targets for theirFMCG launches. Now, they can track their performance against thevery best.• Distribution: Winners kept building distribution well into thesecond year. On average, our 31 winners were available in 145,000stores at the end of 6 months and over 200,000 stores at the endof 18 months. 8 winners attained 200,000 stores within 6 monthsof launch and 9 winners had distribution in over 250,000 stores atthe end of 18 months.• Revenue: On average, sales for our winners more than tripledfrom months 6 to 12. Moreover, in the case of 10 winners, salesdoubled from months 12 to 18. On average, winners generatedabout INR 110 million at the end of 6 months and about INR340 million at the end of 12 months. At the end of 6 months, 9launches had crossed the INR 100 million mark and 2 of themhad breached the INR 500 million mark. At the end of 18 months,4 brands had surpassed the INR 1 billion mark and 2 of them hadsales upwards of INR 2.5 billion.• Market Share: Even though many winners belonged to wellpenetratedcategories, yet on average they garnered over 1 percentmarket share at the end of 18 months. 9 winners had alreadysecured 1 percent share in their respective categories within 6months of launch.Winner Averages At 6 months At 12 months At 18 monthsDealers (000) 145 182 204Revenue (INR million) 110 338 615Market Share % 0.74 0.95 1.05Copyright © 2014 The Nielsen Company5

SHIFTING THEODDS IN YOURFAVOUROnly 31 breakthrough innovations emergedvictorious out of 14,509 launches. That’s a successrate of only 0.2 percent. While these 31 innovationsmay have come from 20 different categories, theyall stood out because they practiced demanddriveninnovation and not only excelled at beingdistinct and relevant, but also endured.Now even though a 0.2 percent (31 out of 14,509 launches)breakthrough success rate is not very encouraging, the good news isthat odds of success vary. We found that the top 20 FMCG players hada better shot at breakthrough success than the rest of the market – andamongst the top 20, the 9 global companies seemed to have an edgeover their 11 local counterparts. But even in this league, with deeppockets and accumulated learnings over the years, only 1 out of 20innovations stood out.GLOBAL COMPANIES HAVE AN EDGE IN INDIAALL FMCGCOMPANIESTOP 20 FMCGCOMPANIESLOCALCOMPANIES INTOP 20 FMCGGLOBALCOMPANIES INTOP 20 FMCGNUMBER OFINNOVATIONS14,509437184253BREAKTHROUGHINNOVATIONRATE0.2%4.8%3.8%5.5%Source: Nielsen6 INDIA BREAKTHROUGH INNOVATION REPORT

Breakthrough success rates varied significantly by categories. While3 out of 10 innovations were in the personal care space, 4 out of 10breakthrough winners belonged to this segment.Interestingly, when innovations took place incategories with a few dominant players, there was agreater chance at breakthrough success. This alsomeans when you innovate in a fragmented category,you give yourself lower chances of achievingbreakthrough success. So there is an innateadvantage based on which turf you decide to play on.CATEGORY LANDSCAPE IMPACTS INNOVATIONPERSONAL CARECATEGORIESCATEGORIES WITHDOMINANT PLAYER% OF ALLINNOVATIONS 29% 49%% OFBREAKTHROUGHINNOVATIONS39% 74%Source: NielsenCopyright © 2014 The Nielsen Company7

THREE-COREDISCIPLINESOF DEMAND-DRIVENINNOVATIONAN EQUATION FOR INNOVATIONIDENTIFY ANUNMET NEEDCREATE ADEVELOP A+ + +DISTINCTIVEMARKET READYCONCEPTOFFERINGEXECUTETHE RIGHTACTIVATIONSTRATEGYBREAKTHROUGH INNOVATIONSource: NielsenBreakthrough innovation success is rooted in three core disciplines asexemplified by many of the 31 winners. Organisations that internalisethese disciplines give themselves a better shot at success.• Demand-driven insight: Uncovering latent demand – lurkingin the unmet needs and poorly performed jobs in consumers’ lives– is at the core of breakthrough innovation.• Demand-driven development: From beginning to end, theinnovation team must pursue the demand-driven insight faithfullyand fully. The concept, product, and go-to-market execution allmust align – free from the constraints of established processes,existing resources, or marketplace assumptions – in order torealise a breakthrough proposition.• Pervasive leadership: Driving the innovation process withrigour and passion over the countless hurdles that must becleared from idea to launch to years of in-market support requirestop down, bottom-up, outside-in, and inside-out leadershipthroughout a committed organisation.8 INDIA BREAKTHROUGH INNOVATION REPORT

KEY LEARNINGSFROM OURBREAKTHROUGHINNOVATIONWINNERSSuccessful innovation is not formulaic, but there are patterns andbehaviours that winners share. Breakthrough innovations cut throughthe clutter because they address an unmet consumer need with adistinctive market-ready offering and then back it up with relentlessfollow through. This is why they are breakthrough.THE INNOVATION AGENDANEEDS TO BE SET FROM THETOP. YOU NEED TO HAVETHE COURAGE TO CULLLOW ROI INNOVATIONSIF THEY ARE NOT HITTINGMILESTONES; PROFITABILITYGUARDRAILS ARE ASIMPORTANT AS MEETINGCONSUMER NEEDS.DEEPIKA WARRIER,VP- MARKETING, PEPSICO INDIABreakthrough innovations cut through the clutter because theyaddress an unmet consumer need with a distinctive market-readyoffering and then they back it up with relentless follow through.Copyright © 2014 The Nielsen Company9

Breakthrough innovation refuses to be reduced to an insipid checklistbut we found a few themes that were common to how our Indiabreakthrough winners activated their launches in year one. Here arefive learnings that stood out.1 PREMIUM PRICING: Our breakthrough winners out pricedtheir categories. They knew they had a winning proposition andthey asked the consumer to pay for it. On average, our winnerswere priced at a multiple of 1.7X compared to the category averageversus 1.2X for all innovations. Some winners challenged the pricingperimeter of the category and asked for several multiples of a pricepremium. Olay Regenerist, one of the breakthrough innovations inSkin Creams, is priced almost seven times higher than the categoryaverage. Breakthrough innovations like Colgate Sensitive Pro Reliefand Sensodyne Rapid Relief in the Toothpaste category are priced fourtimes higher than the average category price. Indian shopping basketsare upgrading and these winners cashed in.2 LEVERAGING THE MODERN TRADE CHANNEL: Our winnersalso outperformed their peers in the modern trade channel. Theymaximised the in-store theatre opportunity and used it to appeal tothe early adopters. Breakthrough winners grew twice as fast as theother innovations at the all India level but seven times faster thanall other innovations in modern trade. Clearly, winners jumped on tomodern trade early and banked on it as a laboratory for innovation.Most of the successful innovations like Bru Gold, Colgate Pro Relief,Sensodyne Rapid Relief and Maggi Nutri-licious Pazzta Tomato Twistwitnessed extremely high growth and higher than typical revenuecontributions for their respective categories come from Modern Trade.Index to AverageCategory PriceUNSUCCESSFUL INNOVATION1.2XBREAKTHROUGH INNOVATIONSource: Nielsen1.7XThe Modern Trade channel was used as a key medium to reach theirintended consumer groups since the channel has access to premiumendconsumers and most of the successful innovations did ride on apremium positioning.6 MONTHSVALUEGROWTHALL INDIAMODERN TRADE7X VALUE GROWTH IN MODERN TRADE18 MONTHSVALUEGROWTHSource: Nielsen10 INDIA BREAKTHROUGH INNOVATION REPORT

3VALUE GROWTHMAXIMIZING THE METRO OPPORTUNITY: Our breakthroughwinners also went aggressive in the metros in their launch years(where approximately INR 3 out of INR 10 is spent on FMCG ingeneral) – they grew 7X faster than the other innovations and sold3X more per store than the others. They were under indexed in ruraland the smallest of towns – but they kept betting big on where themoney is, where shoppers are most experimental, and where theirdistribution networks won’t let them down. Metros are great fornew innovations as many consumers here can be classified as earlyadopters who actively look out for new launches, making a marketer’sjob relatively easier.7XMany innovations that look to create or fortify relatively newercategories are better served by focusing on the evolved metroconsumer. Take the case of Olay Regenerist in India. It primarilytargeted females in the age group of 30 - 45, living in the top 10-12metros. Its success story was scripted in catering to these evolvingconsumers who are more aware than ever and have begun to engagewith the category. Sonali Dhawan, Chief Marketing Officer- P&G India,says, “The knowledge of Skin ageing had significantly grown versusfive years ago. Especially now that consumers know that skin ageingstarts from mid 20s and that fairness creams may no longer suffice.Also, the success of Olay Total Effects in India and the acceptance ofthe product among the Indian consumers did help drive the launch(for Olay Regenerist).”SOLD MOREINNOVATION MINDSET HAS TO BE DRIVENFROM THE TOP, WHILE ENABLING FREETHOUGHT AND EXPERIMENTATION AT ALLLEVELS OF THE ORGANIZATION. TEAMS NEEDTO IDENTIFY THEIR ‘SILVER BULLETS’ AND DORELEVANT RESEARCH AND TESTING BEHINDTHE CONCEPT AND MARKETING MIX, INORDER TO GENERATE CONFIDENCE IN THESIZE AND SUCCESS OF THE IDEA.Source: Nielsen3XVIKAS AHUJA,CMO, MYNTRACopyright © 2014 The Nielsen Company11

4 CAPITALISING ON THE GROWING CLOUT OF NORTHERNSTATES: The one part of the country where breakthrough innovationsparticularly stood out was the North zone. The winners grew saleshere four times as fast as other innovations. The South and West arehistorically known as preferred test markets but the winners did notignore the growing clout of the North zone. Winners like Ponds PureWhite, Godrej Saffron, and Kustody had much higher salience andgrowth in the north versus their respective categories and capitalisedon this high-growth region.NNORTH ZONEMONTHS 6-184X VALUE GROWTHALL INDIAMONTHS 6-182XVALUE GROWTHWSESource: Nielsen5 INVESTING BEYOND YEAR ONE: Winners took little rest. Ourbreakthrough winners continued to power through with relentlesssupport beyond the first six months. We found same store salesincreased 41 percent in months 6-18 on a much higher base comparedto just 11 percent for the other innovations. Our winners built demandby not only being in the right stores but also by supporting theproduct well into the second year. Lactogen 4, Bakefresh, and Fogg areprime examples of winners who kept the momentum strong well intothe second year – each of these brands at least doubled their year onesales in months 13-18.successCUMULATIVE SAME-STORESALES GROWTH41%other0MONTHS11%6MONTHS18MONTHSSource: Nielsen12 INDIA BREAKTHROUGH INNOVATION REPORT

WHAT SETSWINNERS APART?Best-in-class innovators take a holistic view of their initiatives,keeping an eye on three key dimensions throughout the innovationdevelopment process.THE BEST INNOVATION DECISION MAKINGSYSTEMS EMBRACE THREE KEY, RELATED AREAS:STRATEGYCONSUMERVIABILITYFINANCIALPOTENTIALHave you identifiedan unmetconsumer need?Do you have enoughdifferentiation and consumeracceptance for both short andlong-term success?Will you executein market to reachyour sales goals?THINK BEYOND YOUR IMMEDIATE COMPETITIVE LANDSCAPE WHEN YOU DETERMINEMETRICS. LOOK AT GLOBAL BEST-IN-CLASS AND LOOK AT OTHER CATEGORIESTHAT COULD POTENTIALLY EXTEND INTO YOUR OWN SPACE. HOLD YOURSELFACCOUNTABLE AND DEVELOP A CULTURE OF CONTINUOUS IMPROVEMENT WHEREYOU COMPETE WITH YOURSELF.NANDINI SETHURAMAN,CHIEF MARKETING OFFICER, WALMART INDIACopyright © 2014 The Nielsen Company13

OTHER WINTHEMES & THEIMPORTANCE OFDISTRIBUTIONQUALITYMany winners told us that demand-driven insight was a prerequisitefor breakthrough success – they could not have gotten far without aproposition they believed was extremely relevant and distinctive. Eachof them pursued development faithful to the core insight. Winnersalso spoke of a superior product that was an outcome of a clear stagegate process that ensured development within one year.OTHER CLIENT “WIN” THEMESPRODUCTSUPERIORITYCLEAR STAGEGATE PROCESS12 MONTH GESTATIONWINDOWDISTRIBUTIONQUALITYHEAVY RELIANCEON TELEVISIONSALES-MARKETINGPARTNERSHIPDISTINCTIVE & RELEVANT PROPOSITION14 INDIA BREAKTHROUGH INNOVATION REPORT

From an execution standpoint, ourwinners focused on distributionquality. They got into the rightstores, invested in high quality instorecollateral and in the shopperexperience. They relied heavily onTV and mass media to reach out to abroader audience and did not shy awayfrom leveraging experts and credibleinfluencers to win the consumer.Winners banked heavily on mass media (TV & Print) along witha reliance on credible influencers to generate trial. Many winnerschallenged category codes and found creative ways to make a splashand garner attention. Sensodyne is globally associated with sensitiveand effective pain relief and therefore the brand not only leveraged theirglobal brand equity but also believed that advertising recommendationsfrom dentists would really drive the “fast relief” communication for thebrand; this helped them connect successfully with their consumers.Fogg deodorants kept their TV ads simple and focused on the keyUSP of being more effective and guaranteeing long lasting fragranceand more sprays. On the other hand, Bru Instant Coffee’s innovativestrategy to include aroma inserts in newspapers worked wonders ingarnering attention and effectively communicated the message ofwaking up to an aromatic Bru coffee.Lastly, the winners also acknowledged that sales and marketing unifiedas one team to make the innovation a success.ANYTHING THAT HAS THE POTENTIAL TO SHAPE THE MARKET NEEDSINSIGHTS, TIME AND RESOURCES TO GAIN TRACTION. MANY BUSINESSESPULL THE PLUG ON POTENTIALLY STRONG IDEAS BECAUSE THEY AREUNWILLING TO PROVIDE THE INITIAL RESOURCES NEEDED TO BUILDTRACTION IN THE MEDIUM TERM.AMAL KELSHIKAR, COUNTRY HEAD & GM,ABBOTT NUTRITION INTERNATIONAL – INDIACopyright © 2014 The Nielsen Company15

WINNERSPOTLIGHTSSPOTLIGHT 1 : HORLICKS OATSSPOTLIGHT 2: MAGGI NUTRI-LICIOUS PAZZTA TOMATO TWISTSPOTLIGHT 3: GODREJ NO. 1SPOTLIGHT 4: BRU GOLDSPOTLIGHT 5: SENSODYNE RAPID RELIEFSPOTLIGHT 6: OLAY REGENERIST16 INDIA BREAKTHROUGH INNOVATION REPORT

SPOTLIGHT 5 : SENSODYNE RAPID RELIEFNO TEETHINGISSUE HEREINSIGHT:Globally, Sensodyne, a GSK brand, is the largest brand for dentinehypersensitivity management and has a strong portfolio of productsthat address the various needs of sensitivity sufferers. In India, theawareness levels in 2011 for the condition of sensitivity was low at 17percent compared to 33 percent globally. Furthermore, Indians did notlike changing their current toothpaste.Amongst sufferers though, there existed a section of consumers whoneeded quick relief from the discomfort of sensitivity. Rapid Relief waslaunched to address this need.SOLUTION:Rapid Relief has an extremely hardworking scientific formulation toclinically provide relief in 60 seconds. It also provided the dentistswith a unique solution as an acid-resistant sensitivity toothpaste. Thiswas a first-of-its-kind benefit area which was previously unexplored,creating a differentiated positioning for the brand. The advertising wascustomised to suit the Indian audience, and tested. The entire mix wasadapted for the Indian consumer to ensure a successful launch. Theentire process took about a year to launch on ground. Dentists are coreto the Sensodyne brand. One of Sensodyne’s core success factors waskeeping real dentists at the heart of all its communication right from TVto the point of purchase. Rapid Relief was launched as a key variant tothe Sensodyne portfolio. The ambition was to make it fully available inall stores where the Sensodyne base variant was available. The segmentsells most out of the chemist and the Modern Trade channel, and assuch, visibility and distribution efforts were more concentrated towardsthese two channels.WE CONSIDEREDSUCCESS AGAINST OUROBJECTIVES ON THREECLUSTERS: MARKETPERFORMANCE, BRANDPERFORMANCE, ANDDENTISTS’ PERCEPTIONS.RAHUL BIBHUTI,GM, ORAL CARE, GSKIMPACT:Rahul Bibhuti, GM, Oral Care, says “We considered success against ourobjectives on three clusters: market performance, brand performanceand dentist’s perception. On market performance, the brand deliveredon objectives of market share, distribution targets, Share amonghandlers and PDO. On the brand performance we measured success onoverall awareness and brand equity parameters. We also delivered onour objective of driving awareness and recommendation of Rapid Reliefamongst the dentists we cover”. Sensodyne Rapid Relief generated INR260 million within 18 months of launch.22 INDIA BREAKTHROUGH INNOVATION REPORT

SPOTLIGHT 6: OLAY REGENERISTTHE INNOVATIVEANTI-AGEINGPRODUCTINSIGHT:In the last few years, there was a disproportionate increase in thedisposable income of the Sec A/A+ segment – mid luxury segment(relatively affluent consumers) driving higher spending on beauty/skin care products. The huge gap in pricing between the prestige andmasstige skin care brands left the consumers without a choice inbetween. The success of Olay Renegerist, one of the company’s mostsuccessful boutiques across the world combined with the success ofOlay Anti-ageing in India (> 50% of the anti-ageing category with TotalEffects being the #1 anti-ageing product) gave P&G the confidence tobring the best Olay boutique to India. The knowledge surrounding skinageing had significantly improved versus what it was five years ago.Moreover, consumers understood that skin ageing starts from themid-20s and post that fairness creams may no longer be enough.SOLUTION:The success of Olay Total Effects in India and the acceptance of theproduct among the Indian consumers did help drive the launch.Olay Regenerist was able to introduce a product that delivers theperformance of luxury skin creams at a very affordable price. Hence,with this product they were able to target people who were justentering the luxury segment. Successfully, they reapplied the best inclassglobal formula sold in developed markets which were relevantfor the Sec A/A+ segment – mid luxury segment in India. This wasalso one of Olay’s most awarded products globally. P&G realised theimportance of innovation in not only the product but also in the go-tomarketstrategy given the underdeveloped nature of the category. WithOlay Regenerist, their idea was to deliver a luxury skin care shoppingexperience in the context of the traditional beauty stores in India – akey challenge that they were looking to solve. They did this by creatinga department store-like environment by creating experience zonesin the traditional trade format thereby creating a premium shopperexperience. This was supported by significant PR buzz and leveragingcredible influencers (like beauty editors) and publicity surrounding thenumerous awards that the product won globally.Copyright © 2014 The Nielsen Company23

Sonali Dhawan, Chief Marketing Officer, P&G India, says, “We had awaiting list for the product much before they were in the market withthe top beauty editors from India who were on it. This drove a lot ofbuzz for the product even before it hit shelves. We leveraged credibleinfluencers like dermatologists and global awards that the producthad got.”IMPACT:• Year 1 volume delivery was ahead of P&G’s expectations. In valuessales, the launch generated INR 260 million in the first 18 monthsalone.• Great consumer review/feedback• Won multiple beauty awards in India like Vogue Beauty Awards, ElleBeauty Awards, etc.WE HAD A WAITING LIST FOR THE PRODUCT MUCH BEFORETHEY WERE IN THE MARKET WITH TOP BEAUTY EDITORSFROM INDIA WHO WERE ON IT. THIS DROVE A LOT OF BUZZFOR THE PRODUCT EVEN BEFORE IT HIT SHELVES.SONALI DHAWAN,CHIEF MARKETING OFFICER, P&G INDIA24 INDIA BREAKTHROUGH INNOVATION REPORT

INNOVATING TOWIN IN INDIAYear 2011 Year 2012 H1’13Total Innovations 14509 14135 6639Food 45% 44% 45%Personal Care 29% 28% 27%Household Care 18% 20% 19%Undoubtedly, India is home to some of the finest minds and abundantresources. Many of its corporate, academic and scientific institutionshave a track record that is second to none. Relatively, higher businessgrowth in India also means that industry captains here have lot moreat their disposal to take risks and invest for the future. India has thepotential of being the benchmark for breakthrough success globallyand even though the number of FMCG launches have slowed inrecent times, what shouldn’t is the appetite to improve the odds ofbreakthrough success and deliver on that consistently.On average, Breakthrough Innovation Winners generate INR 340million in first-year sales and sustain high growth into the outyears.Nothing breeds success like success: the majority of breakthroughwinners go on to launch extensions that fuel additional growth atcomparatively low risk.India is capable of scripting many more breakthrough innovationsuccess stories. To shift the innovation odds in its favour, companiesin India should listen more acutely to partners and retailers, embracemore risk in the early stages of the innovation funnel, leverage thepower of modern trade as an experimental laboratory for innovation,launch fewer innovations that are bigger and bolder and supportinnovations well into the second year. While the odds of innovationsuccess remain daunting, we can make the risks more manageableand the path to success less hazardous by accelerating the cycle ofsharing, learning, and improving.Copyright © 2014 The Nielsen Company25

APPENDIXMETHODOLOGYNOTESChannels Covered by NielsenIndia:Nielsen covers seven types of retail outlets which sell FMCG productsin its retail audit. These include Grocers, General Stores, Chemists,Cosmetic Stores, Paan/Bidi shops (which sell FMCG products)Specialised stores which deal in packaged food products and ModernRetail stores. In case of Soft drinks, audit data is captured fromthree different channels namely Grocery, Convenience and Eating &Drinking outlets.Defining Dominant andFragmented categories:Herfindahl Hirschman Index was used to define dominant andfragmented categories. This index is defined as the sum of the squaresof the market share of 50 largest firms within the industry where themarket shares are expressed as fractions. So categories where theindex was higher would be dominant categories and where it waslower are more competitive categories.26 INDIA BREAKTHROUGH INNOVATION REPORT

ABOUT THE AUTHORDISCLAIMERRANJEET LAUNGANIVICE PRESIDENT & INNOVATION PRACTICE LEAD,NIELSEN INDIAManish Gupta, Anup Pradhan, Himanshu Marpakwar, Sneha Kalro,Chirag Bhatia and Akash Arora from Nielsen’s Innovation Practice inIndia were instrumental in creating this report. The author would alsolike to thank Taddy Hall, SVP, US Innovation Practice and the entire USBreakthrough Innovation Report 2013 team for their support. We reiterateour sincere thanks to those clients who participated in this report, as wellas embracing our belief that an idea shared is an idea improved.The information contained in this report is based on compilationsand/or estimates representing Nielsen’s opinion based on its analysisof data and other information. Client stories in the Winner Spotlightssection are not validated by Nielsen. Nielsen shall not be liable for anyuse of or reliance on the information contained in this report.About NielsenNielsen Holdings N.V. (NYSE: NLSN) is a global information andmeasurement company with leading market positions in marketingand consumer information, television and other media measurement,online intelligence and mobile measurement. Nielsen has a presencein approximately 100 countries, with headquarters in New York, USAand Diemen, the Netherlands.For more information, visit www.nielsen.com.Copyright © 2014 The Nielsen Company. All rights reserved. Nielsenand the Nielsen logo are trademarks or registered trademarks ofCZT/ACN Trademarks, L.L.C. Other product and service names aretrademarks or registered trademarks of their respective companies.14/7320Copyright © 2014 The Nielsen Company27

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