Successful innovation relies on effective consumer insight

1. ‘Eyes on the prize ....tracking the way to product success’HGCA Biscuit Workshop8th & 9th April 2014 Peter BurgessHead of Consumer & Sciences Campden BRI

2. Successful innovation relies on effective consumer insight

3. What influences consumer behaviour? Insights from behavioural economics (psychology & economics) 1. Personal factors Decision Defaults ‘System 1’ & ‘System 2’ thinking leads to a typical going with the flow of pre-set options – consumers will ignore choices available to them in favour of behaviour established through routine, sticking to what they know or doing the same things repeatedly. A report quoted by Harvard Business Journal found that families, on average, repeatedly buy the same 150 items, which constitute as much as 85% of their household needs. http://hbr.org/2011/04/why-most-product-launches-fail/ar/pr Source: Mindspace – Institute for Government

4. What influences consumer behaviour? Insights from behavioural economics (psychology & economics) 1. Personal factors Status quo bias Our responses to incentives are shaped by predictable mental shortcuts such as strongly avoiding losses 1. Losses loom larger than gains. 2. Reference points matter. 3. We overweight small probabilities. 4. We mentally allocate money to discrete bundles. 5. We live for today at the expense of tomorrow. Source: Mindspace – Institute for Government

5. What influences consumer behaviour? Insights from behavioural economics (psychology & economics) 3. Personal factors Affect Emotional associations can powerfully shape our actions- they unconsciously reduce the complexity of decision-making, influencing automatic evaluations that help us towards a decision Salience Our attention is drawn to what is novel and seems relevant to us – we can be impulsive and biased towards instant rather than delayed gratification Source: Mindspace – Institute for Government

6. What influences consumer behaviour? Insights from behavioural economics (psychology & economics) 2. Social factors Messenger We are heavily influenced by who communicates information – influence of experts or sources of authority Norms We tend to do what those around us are already doing ‘’The evidence from a number of leading behavioural and neuroscientists suggests that our species is designed as a herd or group animal.’’ Source: Mindspace – Institute for Government

7. What influences consumer behaviour? Insights from behavioural economics (psychology & economics) 3. Environmental factors Product & packaging Plenty of data to show how factors like in-store lighting, music, layout etc can influence purchase decisions – more recently the relationship between pack design, pack functionality, labelling and the links to product expectations, experiences and future purchase intentions is becoming evident. • Lab research supports the notion that: • - ‘sweet’ tastes are better expressed by means of rounded shapes,typographies, and names. • - ‘sour tastes’ are better conveyed by means of more angular shapes, typographies and names. • Suggests that information derived from packaging could shape • expectations in the mind of the consumer about the taste of a • product and impact purchase behaviour. • Predictive packaging design: Tasting shapes, typefaces, names and sounds. • Valasco et al. Food Quality & Preference (2013)

8. What influences consumer behaviour? Insights from behavioural economics (psychology & economics) 3. Environmental factors Recent Campden BRI study to measure the effect of different forms of on–pack images on consumers' expectations and experiences of a product. ‘Visibility’ ‘Ingredients plus Cotswolds’ ‘People’ Hall test to measure the effect of on-pack images on consumers’ expectations and product experiences. Pre and post questionnaire Front-of pack image manipulation, creation of 10 designs. Source: Campden BRI MSFR 119170

9. What influences consumer behaviour? Insights from behavioural economics (psychology & economics) 3. Environmental factors • Significant differences (p<0.05) were found for each of the hedonic • measurements in relation to pack design. E.g. Significant differences • between pack designs in relation to expected liking of product appearance Source: Campden BRI MSFR 119170

10. What influences consumer behaviour? Insights from behavioural economics (psychology & economics) 3. Environmental factors • A significant association was found between purchase intention and the • gap between expectations and experience. Products with small • discordances demonstrated greater alignment with consumer’s • expectations and overall performed better. Source: Campden BRI MSFR 119170

11. ‘’People don’t do what they say, don’t say what they think, and don’t think how they feel’’. David Ogilvy • In obtaining consumer input on NPD concepts/prototypes must recognise: • Behaviour is context dependent • Words are poor tools • Role of intuition in decision making • Emotional and rational decisions are intertwined • Consumer research can sometimes focus on what can be readily measured because its expedient. • ‘’ ..in danger of valuing most highly those things we can measure most accurately, which means that we are often precisely wrong rather than approximately right’’ John Banham Challenge in obtaining consumer insight is....

12. Improving understanding of consumer responses through…. Application of implicit (physiological) measures such as eye tracking technologies and neuromeasurement devices.

13. Consumer Research – Eye Tracking This method can be used to implicitly assess consumers’ attention, engagement and recall of information from product labels, packaging and/or marketing communication. Visual attention is important as in most cases we can only perceive and interpret something clearly when we fixate on an object. The eye-mind relationship is what makes it possible to use eye movements to tell us something about human behaviour .

14. Consumer Research – Eye Tracking At Campden BRI we primarily use a fixed eye tracking system (pupil centred corneal reflection technology) to track and measure consumer fixations in response to stimuli shown on a high resolution screen. • Eye tracking sensor bar • – infra red light emitter and high • resolution cameras.

15. Consumer Research – Eye Tracking Fixture display to assess findability and/or standout Product display to assess attention, engagement and recall of communication The system uses bespoke software to aggregate the data. ‘Heat maps’ are created and projected on the stimuli tested, as well as a series of data tabulations and gaze plots.

16. Consumer Research – Eye Tracking Recall of information can be related to heat maps and gaze plots to assess efficiency and effectiveness of on pack communication. Source: Seafish & Campden BRI

17. Consumer Eye Tracking – Eg. Standout & Engagement Measures

18. Consumer Research – Eye Tracking – Key Benefits..... • Ability to determine what consumers find important or interesting and • what they tend to ignore. • Assessment of consumers’ decision making processes. • Ability to explain inefficient or ineffective product performance. • Identification of search patterns and strategies. • Evaluation of how consumers perceive visual designs on packaging and how this relates to clients objectives.

19. Consumer Research – Eye Tracking – Considerations..... • Careful test design is important in the understanding and correct interpretation of the eye tracking data – there are lots of data to work through! • ET systems do not measure thoughts but rather a correlation of thought – its therefore important that tests are accompanied by some form of interview or think-aloud protocols to fully understand why a consumer has been fixating on some areas and ignoring others.

20. Consumer Research – Next steps ….. • EEG - Electroencephalography. • Picks up electrical activity in the cortex • • Combined with ET shows levels of concentration, attention and • emotion EEG brain data is converted into metrics of attention and emotion which can be combined to determine overall degree of engagement.

21. Thank you for listening • Contact details: • Peter Burgess • Head of Department • Consumer & Sensory Sciences • T: +44(0) 1386 842122 • E: peter.burgess@campdenbri.co.uk