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Transferring Innovation to Global Markets

By: Michael Doyle
Posted: April 6, 2010, from the April 2010 issue of GCI Magazine.

When it comes to cosmetics, “relevance” is critical. Brand owners need to be able to pinpoint the singular attributes and features that will differentiate a product in consumers’ minds and entice them to buy. But global beauty markets are not interchangeable. Product attributes such as fragrance or color that work in Brussels may not resonate in Beijing. This means that reaching lucrative high-density markets, such as India or China, requires much more than simply a solid distribution strategy. Rather, global success will be determined by how adept companies are at transferring the product innovation that defines their brands to new markets while taking into account the unique requirements of specific geographies and cultures.

Doing this requires that organizations find better and faster ways to tap into the vast resources that exist within their R&D knowledge base, which may include everything from formulation recipes and data from past experiments to supplier information, consumer preference models and production history. There are three ways that beauty brand owners can empower regional product development sites to succeed in emerging markets.

Streamline Local Decision-making

What shampoo attributes are most important to Chinese consumers? Which sunscreen ingredients and tints most closely match the skin tone range for women in Mumbai? To quickly establish a foothold in a new location, beauty companies must be able to cost-effectively adapt proven formulations to meet the demographic needs and preferences of their target consumers. There are other market-specific issues that are important too—including political, regulatory and supply chain considerations. For example, an organization might need to compare the prices offered by flavorant, odorant or active substance suppliers within a specific geographic region, or understand a particular government’s regulatory policies on active ingredients.

This requires local knowledge and local expertise that is not readily or rapidly available within a centralized R&D headquarters far removed from the culture and environment of the target market. Thus, regional product development sites must be given the analysis tools (and the autonomy) they need to make these locally relevant decisions. At the same time, organizations must also be careful not to overburden local teams with R&D tasks that can be more cost-effectively handled by existing resources or that require many years of technological development to learn.