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Where’s Home? Using Br and Source as a Competitive Advantage

Thanks to sc andals in many countries in the last few years, the global Food and Beverage industry has been forced to recognise that consumers want to know where products are made and from where their ingredients come.

Most US retail food stores are now required to inform consumers about the country of origin of fresh fruits, vegetables, fish and meat. The final rule to implement country-of-origin labeling (COOL) took effect on March 16, 2009 there. Sales of prepared dishes containing beef dropped significantly in Europe earlier this year and this resulted in lower prices for wholesalers and eventually also for the farmers. According to Reuters, a recent poll run by Consumer Intelligence in the UK, showed that more than 65% of respondents said they trusted food labels less as a result of recent incidents, so in fact the whole food industry has been impacted.

This interest in sourcing is happening in other industries too, but rather than seeing these dem anding consumers as a challenge, you can answer their thirst for information and turn it into a competitive advantage.  To illustrate how you can do this for your br ands, here are a few br ands, including some of the global heavyweights,  that have done exactly this.

Beverages

Wine, alcohol and coffee have always been sold primarily on origin, because it has a significant impact on taste and consumers’ enjoyment of the products. However the br ands in these categories have usually been built upon their blending expertise or regional knowledge.

SOURCE: Nestle.com

Although tea has also used sourcing to differentiate itself, it is only recently, with the launch of Nestlé’s Special T that a br and has built itself based upon the country of origin of its ingredients. Special T offers teas from five regions of the world, Japan, China, India, Ceylon and South Africa and claims to propose to tea-lovers the same quality and ease of preparation as the very successfulNespresso system.

 

Electronics

Apple.com

This post was prompted in part by the latest, rather indulgent campaign of Apple. The company has been running a cross-media ad campaign with the sign-off “Our Signature“, to state and reinforce its core values. Whilst it cannot claim American sourcing, it has cleverly made an association with the US through their claim “Designed by Apple in California”.

Some, dare I say many, consumers will “hear” American and attribute a better image to the br and than they would with the reality of Asian sourcing (no criticism intended). The ad is also, at least in my opinion, a covert attack on Samsung’s iPhone-threatening Galaxy range whilst also responding to the growing dem and in many countries to repatriate labour from Asia.

Apple has responded to their customers’ need for information by turning a possible perceived negative (Asian sourcing) into a positive (Californian design). Very clever.

 

Cars

Renault logo

Certain industries have perceived best-in-class country associations; take French perfume, Egyptian cotton or Italian fashion. German cars have also been seen as the most robust and well made, at least in Europe, even if they are not always the most attractive in terms of design. The German br and Opel has used the German quality associations as their selling point for both their Corsa and Meriva cars for many years. Thecampaign is so popular that there have been many parodies made and posted on Youtube, including one by French manufacturer Renault. In the latter video, the seller presents his new Renault Mégane with a German accent and phrases, in the exact same style as in the Opel ad; quite amusing and extremely flattering for Opel.

 

How a br and can use COE

According to Wikipedia, the country-of-origin effect (COE) is a psychological effect which occurs when customers are unfamiliar with a product (quality) and the image of the product’s country of origin has a “halo effect” on the customers’ evaluation of the product itself. The country associated with the product may be the country of manufacture, place of assembly, or even just the country in which the company has its HQ. A positive country image may allow marketers to introduce new products while quickly gaining customer recognition and acceptance.

Where is your br and designed, made, or assembled; are your company headquarters in a country with a strong perception that could be used to improve the image of your br and? If so, then you can use it to great effect whilst also answering your customers’ need for more information. A real win-win.

Do you have any other great examples of br ands using the image perceptions of its br and’s country source? If so, please share them below, we’d all love to hear from you.

If you would like to know more about br anding, check out our website: https://www.c3centricity.com/home/engage

Need help in underst anding your br and image and equity or defining suitable metrics? Let us help you catalyse your customer centricity; contact us here.

Social Customer Service: How to be Responsible, Resourceful & Ready in Real-time

A recent Infographic got me thinking about what has and hasn’t changed in customer service thanks to social media. In fact I should have said what has still not changed and MUST change in the very near future.

If you feel that you haven’t made all the necessary changes to meet the challenges of the new social customers and their dem ands, then read on for four actions you should be taking to improve your customer service.

#1. Responsibility

Marketing, Sales and Customer Service all have contact with customers and therefore also responsibility for them. Today these departments must work more closely together to provide a seamless connection with the customer. They need to build on each other’s efforts to satisfy the customer, so that each customer perceives that there is one company working to delight him and that he is really important to them.

Action: Employees from all customer-facing departments need to meet regularly, at least monthly, to exchange and share their latest experiences and learnings. What are customers talking about, complaining about or dreaming of? What new opportunities are there to get ahead of competition in better satisfying these current or latent needs? Organise regular exchanges or “lunch & learn” sessions and if you work in the USA recognise your most active employees by signing them up in the “Most Engaged Employee Contest”.

#2. Resources

Most organisations underst and the importance of their customer, and we all know they are more than ever in control thanks to social media. However, few companies are investing in developing their customer centricity and keeping their customer database current. Business needs to start walking the talk so their customers notice and feel a difference in how they are being treated, listened to and satisfied.

Action: Did you know it costs about 8 times as much to acquire a new customer as it does to retain a current one? Review how you collect and store your customer information. Have you verified their details in the last year? Most companies have upwards of 28% of their database which is out-of-date; when did you last check your own level? Is data stored by br and or business unit? Integrate the information, so the connection with your customer is seamless, more intimate, knowledgeable and fulfilling for you both.

#3. Ready

Social Media connections are growing exponentially but is your organisation staying ahead of the curve?. Recent figures from the latest Burson Marsteller Global Social Media Check-up 2012 suggest there are more than 10 million references to major global companies on social media every month and more than half of these are are on Twitter. Companies need to be following these discussions in addition to responding to customers in the usual way through call centers, email or postal mail.

Action: Review and revise your care center resources and training. Ensure you have a sufficiently growing number of trained staff to be available when the customer most needs to contact you. Provide the customer service agents with the knowledge, information and authority to respond to customers on social media as well as over traditional contact means. Remember that nothing disappears on the web, so written responses need to be accurate, precise and appropriate. If not you may fall into a PR disaster similar to the one Nestlé found itself in on its Facebook page in early 2010.

#4. Real-time

Did you know that customers expect a more rapid response to queries than they are used to getting? This is driving them to non-traditional methods of interacting with customer service agents such as chat and social media. According to the latest State of the Industry report from Acxiom and Digiday 74% of companies cannot respond to customers in real-time. How have you changed your care centres to respond to this dem and?

Action: Review your current customer service practices to ensure you are responding to your customers’ dem ands in real-time or at least offering a short-term solution. Have you made your agents available 24/7 or found a way to propose an alternative solution to customers who might contact outside normal working hours but when they are most likely to need help with your product or service? Customers expect answers within one to four hours these days.

These are the four essential steps that most organisations have still not taken to respond to the new social customer and their increased dem ands. What are you waiting for?

If you have taken other steps to optimise your organisations customer centricity to respond to the dem ands of the social customer then please share them here.

For more information on customer connection, please check out our website: https://www.c3centricity.com/home/engage/

How to Innovate better than Apple

Last week I gave a lecture to a group of Executive MBA students at Miami University. It was a fabulous new experience for me, having only done lecturing in European Business Schools until now. There were lots of great questions and many comments about why organisations do what they do when looking to innovate.

It’s always easier to identify the sub-optimal processes a company uses when you’re on the outside and even easier to suggest possible changes that are needed, but when you are in the heat of the action, it is not so obvious.

I therefore thought it would be useful to list some of the ideas we came up with, in the hope that it will help all those challenged to improve the status quo within their own organisations and to provide some new ways to look at innovating outside the box.

 

#1 What business are you in?

When you are looking to innovate, instead of starting with your own current technology and skills, or products and services, how about taking a step back and thinking about what business you are really in. Lego is a great example; they realised that they were not selling (just) toys; they understood that they were in the imagination business. Which business are you in? Do you have an opportunity to redefine it? Here are some ideas to get you started:

  • Food: Family Time, Neutraceuticals – offer family sized portions, children’s play areas, partner with another industry as Nestlé did with L’Oreal when creating Inneov
  • Cigarettes: Personal Pleasure – tobacco companies should be going far beyond their current simplified expansion into electronic cigarette offerings
  • Alcohol / Beverages: Fun / Relaxation: br and lounges, music, video or internet services
  • Pharmaceuticals: Wellness – instead of curing or treating, offer prevention

 

#2. Can you add something new to an existing product?

Professor Steenkamp Knox Massey Distinguished Professor of Marketing and Area Chair of Marketing at Kenan-Flagler, proved back in 2007 that at least for Fast Moving Consumer Goods, small innovations (which are often referred to as renovations) can be just as successful as large step-changing breakthrough innovations. His research came to the conclusion that it was the ones that fall in the middle of “newness” that don’t meet with significant customer success. So what small changes can you make to your current offer to make it more appealing?

How about adding sound to a food, as Kellogg’s did with their Rice Crispies or Nestlé did by adding a layer of chocolate to the top of their cream deserts in France? Or what about adding smell to your outlet, as bakers and coffee houses already do these days, or Singapore Airlines did many years ago? A small change can have a big impact, especially if tapping into a different sensory perception from those customers are used to having stimulated.

 

#3. Can you add a service to the product?

Some products are actually designed to work with services, which are quite often the more expensive part of the sales equation (e.g. razors and blades or espresso capsules which are not only br and specific but can also only be bought online). However, there are other products that have provided additional services to their customers, by building upon their relationship with them, and boosting loyalty, even significantly in many cases. Examples include:

  • Starbucks offer more than coffee; their outlets are a “home away from home”, offering comfy sofas, free internet, tables for working and meetings
  • Purina offers pet insurance
  • Gerber offers college fund investment packages

 

#4. Can you change the packaging to make it more convenient?

Observe how your customers are using your product in their normal daily lives, as well as the products of your major competitors. Identify issues they have whilst using it, or ways they compensate for a product that is less than ideal for them and then add this extra benefit not offered by your competitors. Some recent examples:

  • Adding a simple h andle to a larger pack makes it easier for your customers to carry; these can be found on Dog Food and Toilet Paper, but not on all Cat Food and Kitchen Towels
  • Repackaging your product into smaller or single portion packs, if this is how most of your customers are using it. Incidentally these single portion packs may find a further use in developing markets where the price point is important for attracting potential new customers.
  • Inverting the tube of thick or creamy substances – as Heinz did for the Ketchup, or many toothpaste manufacturers did for some of their br ands

 

#5. Can you combine some of your current offers or extend a br and into an adjacent category

P&G have many examples of doing this very successfully, following the reduction in the number of br ands they offered about ten years ago. For example, they combined the sheeting action of Cascade & the water-filtering technology from PUR to create a spotless car-wash product under the Mr. Clean br and. Both Nestlé and Unilever have extended their confectionery br ands into ice-cream bars.

 

#6. Can you deliver the product or service in a different way?

Many airlines, including British Airways and Air France, now offer a fourth class on board their aircraft, premium economy / coach. The extra services they offer include priority check-in and boarding together with business class, as well as more legroom and better services on board than economy / coach.

Zappos has been built on service and they even have it in their slogan “Powered by Service”. They regularly surprise and delight their customers by offering express delivery for free. As their CEO Tony Hsieh is quoted as saying:

“Customer Service shouldn’t be a department;

it should be the entire company”

How could you surprise and delight your own customers by exceptional or additional services?

These examples have hopefully stimulated your own thinking, to take it outside your current innovation box. If you have other ideas, then please share them below; we would love to hear about your own creative examples.

However, if you would like support in reinventing your own innovation, why not do like many of our clients and start your journey in the fast-lane, by asking for a 1-Day catalyst session? We would love to catalyse your business to even greater success.

For more information on innovating brilliantly, please also check out our website: www.C3Centricity.com

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6 Tips to Thinking Outside the Innovation Box

Does your business have an innovation process? No? Then perhaps you should count yourself lucky! Most businesses that do have one, sometimes get stuck in it, stopping them from thinking Bigger and Bolder, and therefore also stopping them from dreaming. If this is the case with your own organisation, then this post should offer some inspiration for change.

When companies are starting up, they often begin with just one or a few products or services to offer. However, as they grow, they get ideas about other products or services they could add, sometimes at the suggestion of their current customers. As business continues to grow, they might set up an innovation process or put someone in charge of searching for new ideas and unfortunately this tends to be when they start to lose contact with their customers and what they really desire.

Today we all underst and the importance of customer centricity, the power of putting the customer at the heart of the business and yet we still manage to forget them somehow when looking to innovate. For this reason, I thought it would be useful to share my six tips to help you to think outside the innovation box in your organisation, whether you are a big multinational, or just a small local firm.

#1. Start with your customers in mind

This makes so much sense and yet we all seem to forget it at times. Big companies have R&D departments so their innovations tend to be technology and skill driven. Smaller ones have maybe more limited resources, so ideation falls on the desk of the owner, marketing head or the person responsible for operations. All businesses have customers, so why not start with them? What do they dream about improving, what are their biggest issues with your category? Finding solutions to their frustrations will almost certainly guarantee the success of your next new product or service.

#2. Why do you want to innovate?

The answer to this simple question will give you some ideas of the solutions you need to create:

  • Is competition growing? If so, what do they know about your customers that you don’t? What can you do about it, both now as well as in the future to stop it happening again?
  • Is the market segment growing faster than you are, so even though your sales are growing you are losing market share? If so, why; what products and sub-categories are increasing, what benefits are attracting customers more than in the past? Can you follow or lead with a different benefit area?
  • Is your image getting old and in need of updating? Where are your comparative weaknesses and is competition filling all possible positionings in the category map?

#3. Do you need to innovate or renovate?

The difference between the two can make a huge difference in what you develop. If you need to innovate but actually produce a “small” innovation, closer to a renovation, you are less likely to succeed, at least in CPG, according to Steenkamp. Identify which end of the innovation scale you are aiming for and rework your ideas until you reach it.

#4. Can you innovate outside your box?

Most companies innovate in very predictable ways, so that even their current customers are less excited or inspired to try their new offers. This is unfortunately a trait of human behaviour; we all get bored in the end, even with the best product or service that excited us when it was launched. What was once seen as a breakthrough can quickly become taken for granted as customers become used to it. Therefore why not think outside the box, using different levers? For example food companies continuously bring out new flavours, when maybe a new sensation is what’s needed. Nestlé’s chocolate mousse is a great example of this.

#5. Reinventing innovation needs a new culture, not a new process

As mentioned above, new processes are usually not the best answer to more successful innovation. According to a recent Forbes article likeminded people develop likeminded products. To create breakthrough innovation, you need a culture shock, people who think differently. This can be as simple as taking people from different departments to work together, or hiring people from the outside, with very different mind-sets to stimulate new thinking.

#6. Innovate in answer to scenarios not trends

Most customer-facing organisations follow societal trends. The problem with this is that their competition is doing exactly the same thing, which means that they will be in a constant rush to launch faster than their competitors, and at best end up leading a new segment of two or more almost identical products.

A much better way to innovate is to respond to opportunities or challenges identified by developing future scenarios out of the trends. These have the advantage of being unlikely to be duplicated, at least in the beginning, and are further out time-wise so they will allow more time to create a new offering even before your customer knows they have the need. In some cases this might mean you will have to be patient until the customer is ready – it took Nespresso more than 20 years to become the phenomenal success it is today! – but at least you are less likely to be faced with a competitor offering a similar product.

If you follow these six tips, you can be sure your innovation will meet with greater success and your business will be well prepared to capture future opportunities better than the competition. If you are already doing all of these, I congratulate you. Still struggling to grow as fast as you would like? Well then here is my seventh, only for the bravest innovators:

EXTRA #7. What business are you in?

If you are constantly met with innovations from your major competitors just before or after your own launches, then it is time to get out of the fight be changing the territory. What do I mean by that? Ask yourself what business you are really in.

For example a cigarette manufacturer could see itself as a provider of personal pleasure; now that opens up innovation doesn’t it, far beyond just a different cigarette br and? And suppose a food company became a nutrition business offering supplements and meal replacements; a home cleaning corporation widens to become a home carer and beautifier; a pet food company shares its passion for animals be offering insurance and medical treatments. Asking what business you are really in and not the one you thought you were in, can sometimes be just the spark that is needed to truly successful innovation.

So which one of these are you going to use this month to start reinventing your innovation? Take action today, so that you get a positive ROI on your reading of this post.

Would you like to share your own ideas for improving innovation? Please add a comment below; we reply to all comments and might invite you to write a guest post on the topic for us.

If you want to know more about innovation, please check our website here: https://www.c3centricity.com/home/vision/

Do you know someone who is struggling with their own innovation? Please share this post with them.

Does your organisation need more help in reinventing its own innovation? We can run a 1-Day Catalyst session to get you started FAST; contact us here for more information.

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Be Customer Centric – differently!

If you are confident that you are doing everything you can to be customer centric, then this post is for you; it provides some further ideas on how to surprise and delight your customers in a different way, to ensure you keep your competitive advantage.

Last week I was in the US for a few days and stayed one night in a small lodge on Key Largo. If I hadn’t prepared my trip by checking out possible places to stay on Tripadvisor before I left, I wouldn’t have known about it, as it is hidden by greenery, even though it is on the main US 1 highway. I would highly recommend this lodge (Dove Creek Lodge) if you are in the area; not only does it offer great value for money, but they are very customer centric. They couldn’t do enough for us, even though we were only there for one night on our way down to Key West.

What touched me in particular, was the way they appeared to search for ways to surprise and delight their clients in everything they did, far beyond what you would expect, even from a star-rated hotel. For example, instead of plates of fruit, meats and vegetables for breakfast, they presented the same foods, but as sweet and savoury kebabs. Rather than serving a large bowl of yoghurt for everyone to dip into, they presented delicate glass cups filled with Greek yoghurt, fruit and granola, or graham biscuits with key lime cream. The whole stay was perfect but there is every chance that we will remember it longer than other places in which we have stayed, because we were surprised and delighted by that original breakfast presentation.

So what can you do differently, to surprise and delight your own customers? Think about what you or your category competitors normally do, but then do it in a slightly different way. Customers will be woken from their mindless, habitual behaviour, and made to sit up and take more notice of what you are offering. Here are some examples that I have experienced in the recent past, but I would love to hear about others that you have already seen, used, thought about or had the pleasure of enjoying:

Replacement product:

OK so you think that you have satisfied your customer when sending a replacement for a (perceived) faulty product? How about sending it express delivery, so they get it in record time? This will amplify your already good customer service and your customers will be delighted. Many companies add coupons as an extra, especially in the US, but those don’t delight or surprise any more. You could offer samples of new products as well, but just make sure they are relvant to the customer- I recently received a “normal” version of a “hypo-allergenic” product I had returned due to an allergy!

Bakery:

Instead of the usual fillings of bakery items, how about adding “surprise” additions. For example, how about jam donuts with jam and cream cheese for an added, surprising delight – I actually had this at the Bagel Isl and, Big Pine Key and would love to go back again to try some of their other surprising offers. I have also bought chocolates with very creative flavours, both savoury and sweet, that certainly got my guests talking with their coffeee after a meal!

Car rental:

Alamo and National, and maybe others I am not aware of, offer their customers the full choice of cars to rent  within their reserved price range, rather than the company deciding what car they will give you. This way, you feel that you have far more choice and are in control of your rental agreement, much more so than you do with other companies. I have also received a small attention on leaving the parking of some rental companies – a bottle of water in summer, a CD of seasonal music at Christmas, Halloween c andies in October. It is not so much the small gift as they surprise that delights.

Airlines:

Many airlines are now offering premium economy service, where their clients are treated, at least on the ground, like a business traveler, rather than as an economy passenger. The first time this happens, it comes as a pleasant surprise and I can imagine will likely make their passengers more loyal to the service and perhaps also the airline in the future, in the same way as complementary upgrades do.

Consumer packaged goods:

Extra ingredients or novel packaging ideas that add sensorial experiences to the product, can bring memorable experiences even to commoditized products. For example, Nestlé brought out a cream desert that had a chocolate layer you cracked with your spoon; Herbal Essence shampoos had significant success with special perfumes; Pantene ProV with its unique colours and solid “clunking” lid closure; Bud Light Premium which sells in an unusual rich, blue bottle; or scratch patches on air fresheners and laundry products. There are many ways to add additional surprising sensorial experiences to your offers, you just have to think like your target customer and know what would delight them.

Offering surprising and delighting extras is one way to make your customers remember your product or service, and almost guarantee repurchase and loyalty, since competitive products don’t have them. Surprising your customers makes an emotional bond that intensifies their experience, so they will remember not only your br and, but also the additional pleasure that is relived each time they think about it.

As you saw from the above examples, it doesn’t need to cost a lot to be unexpected, it just needs to be in some way related to your product so the link remains in the customer’s mind next time they go shopping. These extras make a huge difference to the more commoditized products where br ands offer little differentiation beyond the br and and manufacturer’s name.

What other ways have you found to surprise and delight your customers? Have you, yourself been delighted by a special touch you have found in a product or service? Please share your ideas below.

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For more tips about delighting your customers, especially in innovation, please see our website here: https://www.c3centricity.com/home/vision/

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New Year, New Challenges: 3 Helpful Ideas for Innovators

As we ramp up to face the economic, political and societal changes that will surely continue in 2012, many organisations are challenging their R&D and hopefully marketing departments too, to develop and launch new products and services.

With luck, these developments were already in their plans and pipeline for this year, but sometimes businesses are forced into going to market sooner than they would have liked, due to market circumstances or competitive activities.

An article in Marketing Week (read here) at the beginning of last year, mentioned that Unilever said that increased investment, as well as their “Bigger, Better, Faster” innovation initiative was the driving force behind its increased profit and sales in 2010.

As we are all only too aware, today’s customers are highly dem anding of novelty and each period of satisfaction becomes shorter and shorter, as they quickly get accustomed to the latest improvements.

In an earlier post (read here), I spoke of the research carried out by Jan-Benedict Steenkamp, a marketing professor at UNC Kenan-Flagler which showed that CPG / FMCG innovation needed to be one of the two extremes of “innovativeness” to succeed:

  • either a minor improvement, or renovation, such as a new flavour, size, colour, packaging, content …
  • or a radically new product that is significantly different from anything else on the market. These are of course more breakthrough and therefore more difficult to develop. Past examples have included microwave meals, Sony Walkman, Nespresso, iPhone, Ipad,

The interesting and perhaps disturbing thing about breakthrough innovation, is that timing is everything; bring it out too early and people won’t underst and or see the need; too late and competition might beat you. This is one of the reasons that IT companies quite often offer “beta versions” of their products or software before they are 100% ready and then quickly follow with a version 2 with corrected or improved functionalities.

Other br ands such as Nestlé’s Nespresso or even Gillette’s Silkience, the first shampoo with integrated conditioner, launched almost 40 years ago, were introduced ahead of the curve, before their consumers were ready for them. The companies then had to decide to either wait it out (Nespresso waited many years to become profitable) or relaunch at a later date, but then risk being pre-empted by competition, who then have the time to copy the new product.

So how can companies better underst and their consumers’ needs, desires, or even unarticulated and unknown needs, and launch just in time to benefit from them? Here are three ideas that I came up with, but I would welcome your input too:

1. Develop Future Scenarios

Most organisations today are following trends, but as competition is almost certainly following the same ones, there is no competitive advantage and little chance of benefiting from identified tendencies. It is only when the trends are turned into future scenarios that the real competitive advantage appears.

 

2. Identify lead countries

Most industries have markets where the consumers are more dem anding or more open to innovation in certain categories. These are great countries for both market testing, as well as for showing others what is likely to happen in the near future. Such examples include:

  • fashion in France and Italy
  • technology in Japan and the USA
  • retailing in the USA

 

3. Collaborate with neighbouring industries

Several companies have formed alliances with others to either prepare first level ingredients for their own product preparation or to develop manufacturing technologies or retailing opportunities with cross-over possibilities. Examples that come to mind include:

  • Sony-Ericsson: a joint venture by Japanese consumer electronics company Sony Corporation and the Swedish telecommunications company Ericsson to make mobile phones
  • The retail giant Walmart formed a joint venture with Bharti Enterprises, Inc., one of India’s leading business groups, which led to their opening business there in 2009.
  • Nestlé and Coca-Cola formed a joint venture for Ice Tea (just ended)

 

Today’s consumers are highly dem anding of bigger, better and faster innovations, so companies must build speed and flexibility into their new product development processes and tools to answer these needs. Being better prepared is half the battle.

How are you preparing for the constant dem ands of your own customers and consumers? Please share your ideas and stories below.

For more ideas on new product and service development, please check out innovation on our website: https://www.c3centricity.com/home/vision/

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