New Product Strategy: Scale with SGOAs

Individual New Product Development and Testing

It’s a well-understood principle in new product strategy development that the Linus Pauling quote is accurate:

The best way to have a good idea is to have lots of ideas.” 

Or in other words, you need to have a lot of bad ideas to have a good idea. In a typical brainstorming or idea generation session for new products, the teams we work with will generate hundreds of starting ideas.  

After the initial idea generation, starting ideas are then reviewed by the team. The team selects starting ideas that represent a range of approaches in different areas. Each starting idea is then shaped into a concept with benefits, reasons to believe, and a working product name or description.     At this point, there may be approximately 20-40 ideas developed into concepts.

A gated process, often called stage gate, is used to screen new products, ensure hurdles are met, and cross-functional management is aligned to the product.

Large consumer packaged goods companies will then bring a number of these concepts forward to testing, prototype development with product and package, sensory testing (for food products), in-home testing, BASES testing, and more. At each step, there are hurdles the new product needs to pass to proceed to the next step.  This is all well and good for individual new product ideas.

New Product Strategy of Scaling with SGOAs

A complementary new product strategy that many find effective is to use strategic growth opportunity areas (SGOAs) to define broad platforms for new product development. An innovation leader and their team work on the SGOA area on an ongoing basis, and insight and expertise is developed in this area. Often, the organization may identify new technologies or external partnerships that accelerate progress in the SGOA area.  Scotts’ new product ideas in the natural space with PCH provide a good example.

The benefits of working with an SGOA new product strategy include:

  • Scale: A larger potential business opportunity than a single product may command
  • Velocity and effectiveness: Testing and learning about specific new products build organizational expertise and competency over time to allow faster reps
  • Reach: Better ability to identify and leverage relevant technologies, and external partnerships

Defining the SGOA New Product Strategy

Each strategic growth opportunity area has the following elements:

  1. Overall description of area, size of area, growth of area
  2. Target customer (to whom)
  3. Need state (for what)
  4. Rational and emotional benefits sought
  5. Current product solutions (including substitute products and near in competitors)
  6. Latent dissatisfaction or unmet need
  7. Example new product ideas/lines

Typically, the SGOA description will be developed by the innovation team with cross-functional input, particularly sales, marketing and R&D. A pipeline of ideas is developed, as seen in this new products case study.  

Barilla Example New Product Strategy with SGOAs

For example, five broad SGOA new product strategy platforms that Barilla US used to guide its new innovation in the US included:

  1. All family convenience meals
  2. All family nurturing
  3. Adult escape and adventure
  4. Adult healthy conscious eating
  5. Young kid (ages 10 and under) snacks and treats

In each case, the target consumer is the first part of the SGOA description, and the second part contains the benefit area. In the all family convenience meals area, the SGOA was defined as follows:

  • Description: Getting a family meal together that everyone will eat is hard during the week.  It seems like we’re in a rush and eating at different times.
  • Target consumer: Moms who need to provide or make available convenience meal choices for their families
  • Need state: Rushed lunches or dinners during the week
  • Rational benefit: Something quick that still tastes good and is satisfying
  • Emotional benefit: Relief of the burden of cooking and enjoyment at getting something tasty
  • Current solutions and latent dissatisfaction: The current convenient meal choices don’t taste very good and aren’t very satisfying, but I don’t have time to make something better
  • New product ideas/lines: Italian-style entrees (shelf stable in microwaveable trays), pasta cups, panini lunch bites

Requirements for Success Assessment Applied to SGOA New Product Strategy

As a next step, a leading B2B foodservice supplier that we worked with asked that we also define cross-functional success requirements for each SGOA. The SGOA new product strategy was vetted looking at the firm’s capabilities and we identified gaps. The cross-functional success requirement areas that were assessed included:

  • Manufacturing / co-packing
  • Distribution model
  • Cost competitive / pricing and margins
  • Sales
  • Supply chain
  • Product and packaging
  • Marketing
New Product Strategy: Scale with SGOAs

An example of how this played out was that the organization had a gap in supply chain around the ability to deliver product with three-hour hold times in the product and packaging area and also a gap in the ability to mix and prep raw materials in the supply chain area.  This capabilities assessment was then integrated with market analysis and competitive intensity to create an overall assessment.

New Product Strategy: Scale with SGOAs

If your new product development isn’t leveraging an SGOA approach to new product strategy, or, if you are leveraging the approach and would like to learn more about integrating requirements for success, contact Insight to Action.

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