Gentle care for life


A Discussion about Product Development

Integrated Report 2019

  • Message from the President
  • About Unicharm
  • A Discussion about Product Development
  • Unicharm: A Story of Sustained Growth
  • Financial and Non-Financial Highlights
  • Change in Business Environment and Unicharm’s Approach
  • Review of Operations
  • Unicharm’s Value Creation Process and Key Challenges

A Discussion about Product Development

Earnings have been firm in the feminine care business for the last few years. Sales growth is being driven by many new products, some of which have been developed overseas, as well as in Japan. To explore those trends, we talk to Chikara Oka, the executive officer in charge of the global feminine care business, and Yuki Noda, who heads product development in the business.

How product development supports the strong-performing Feminine Care Business

New product ideas born from consumer needs and market insights

Noda Unicharm adopted a new division structure in January 2019. Under the new structure, all feminine care business functions, from marketing through to product development, are carried out by the global feminine care business division. It’s only been a few months since we moved to the new structure, but what are your impressions?

Oka Marketing teams and product development teams have always communicated closely with each other, but bringing them under the same organization has increased the time they work together, further improving communication. Marketing teams focus on consumer needs, while development teams are interested in getting ideas for new products from market insights. Approaching discussions from those two different angles deepens understanding of consumers, leading to new product ideas. In that sense, I think the new structure is having a positive impact.

Noda I agree, the reorganization has removed walls between different departments. Development and marketing teams have become open, creating a culture where they are freer to speak their minds while also respecting the specialist knowledge of their counterparts.

Oka To give an example, marketing personnel are now more likely to pick up the phone and speak to the development team if they see something that catches their eye in product development test results. If the topic is hard to discuss over the phone, they can use video conferencing instead. In some cases, production staff and engineers also take part in discussions, helping to enhance communication. Dialogue between teams in different countries is also one of Unicharm’s strengths. Marketing and development teams both actively encourage locally hired overseas staff to provide their opinions on products, such as what improvements need to be made to help products sell better or satisfy customers in local markets. I think that kind of communication is one of the reasons Unicharm has developed so many successful products overseas.

Using three perspectives in product development

Noda We have to use three different perspectives in product development – insect, bird and fish. Let me explain. First, our local subsidiaries need to have the eyes of insects to minutely observe consumer habits in each country and region. Second, head office needs to have the overarching view of birds to see and learn from successes and failures when product ideas are transferred to other markets. Third, and most importantly, local subsidiaries and head office need to share their knowledge, using the eyes of fish to rapidly see any changes in the tide of consumer behavior. By working closely and diligently together, local subsidiaries and head office can identify potential needs, helping us to consistently develop products that match the requirements of local markets.

Oka With marketing we have to accurately understand what drives local consumers. By visiting overseas subsidiaries and talking with local staff, head office can get a more accurate picture of actual conditions on the ground in local markets.

Noda But if we stay in certain areas too long, we can become biased with preconceived notions, preventing us from noticing small changes in the environment. As a company keeping an eye on global markets, Unicharm head office needs to be able to identify what features of a market are unique to that country and suggest products that are more likely to satisfy local needs. One of head office’s key roles is to guide local product development to ensure it heads in the right direction.

Know, discuss and think about markets

Noda What approach do you take when visiting local markets?

Oka I think it’s important to thoroughly know, discuss and think about markets. Observing how local consumers live and shop gives us insights into new product ideas.

Noda Over the last year, we’ve had more opportunities to visit overseas markets together. On many occasions, I’ve seen you go into local retailers, and in an instant, get a picture of what’s happening in the market and the state of the competition, simply by looking at products on the shelves. You then pass on insights about what Unicharm needs to do to local marketing and product development staff. I’ve also seen you talk to people in stores for more than an hour. I’ve been impressed by your passion for the job and the sharp observations you make about local markets.

Oka Visiting local stores and businesses to understand conditions with your own eyes and ears is low-key work. But repeated visits by marketing and development staff will sharpen their senses. Things they see could leave a lasting impression, which they can discuss later with local staff and other people on their team, potentially triggering a flash of inspiration or a new product idea.

Noda That’s right. Approaching issues as a challenge to be tackled could lead to new ideas that might otherwise have been overlooked.

Products that do not stand out in the market have no real value

Oka In product development, we have to predict changes in consumer habits and grasp consumers’ underlying needs. Information gleaned from consumer surveys is most likely already in the hands of competitors as well, so it’s very important to find ways of identifying consumers’ underlying needs, which even they haven’t noticed yet. To do that, we have to sharpen our instincts and senses.

Noda Indeed. In many cases survey respondents aren’t completely honest with their answers. The same test product affects people in different ways – it may leak for some, but not for others. We have to look into the reasons for those issues, as well ensure consumers see that the basic non-leak, stay-dry and comfort characteristics of our products are better than those of our competitors.

Oka I agree. One of the key features of Unicharm is its complete commitment to products. We want consumers to be able to notice the quality of our products without seeing our brand on the packaging.

Noda Many of our product development engineers are craftsmen at heart. They tend to expect consumers to like their products because they’ve invested so much time and effort into creating them. However, developing products based on your own feelings will only lead to a stream of very similar products. That’s where digital technology becomes important. Unicharm is rolling out digital technology because it gives us effective insights into consumers’ subconscious needs and buying habits.

Oka If we can’t develop products that stand out in the market, we won’t be able to sustain sales or market share growth for any length of time. To do that, every Unicharm employee needs to realize that their individual business activities help to lift quality of life for consumers. One of Unicharm’s Three DNAs is “Maintain our No.1 position through continued and dedicated service.” In other words, everyone in the Company has to be committed to providing outstanding customer satisfaction at all times. That ideal will underpin trust between product development and marketing teams, allowing us to speak our minds honestly with each other.

Noda Unicharm is capable of developing innovative new materials and it can use its non-woven material processing and molding technologies to add value to products that goes beyond basic material development. That means there are plenty of business opportunities ahead for the Group.

Emphasis should be on “what’s right” not “who’s right”

Noda Nurturing human resources is critical to supporting Unicharm’s sustained growth. What is the marketing division doing in that respect?

Oka In many cases, we use on-the-job training (OJT) for routine work. We make use of specialist training documents and manuals, but marketing is a relatively new field of study, so when we’re out in the field, we tend to ask trainees what they would do when faced with certain situations. From our experience, that is the quickest way to increase employee skills.

Noda In my case, during team meetings, I put forward different opinions on purpose, hoping that my team members will take the bait and argue against me. My aim is to debate different theories but also to encourage employees to passionately assert their views. That kind of conversation helps to develop their cognitive abilities.

Oka An organization that is focused on “who’s right” will never create new things. That’s why it’s important for everyone to be always looking for “what’s right.” Any organization will start to decline if it’s easier to follow somebody’s opinion and not think for yourself.

Sofy products never stray from what consumers want

Noda What does the feminine care business need to do to maintain its current strong performance?

Oka We have to keep offering new product ideas. Even if the price point for Sofy is a bit higher than rival products, consumers will probably continue to choose the brand if we can make sure they understand that Sofy products are always of the highest quality and the Sofy brand is always there for them. That price premium can then be reinvested in marketing activities that communicate the value of our products, or to support adequate investment in product development, creating a positive cycle. To achieve that, we have to identify and understand what drives consumers and what they base their decisions on.

Noda Yes, we need to know what consumers want from feminine hygiene products – for absorbency, extended stay-dry qualities, or for comfort. And we have to accurately understand why they make buying decisions and reflect that in our own products.

Oka Basic functions are important, but so are secondary functions such as design, portability and after-use disposal.

Noda Yes, the Sofy Cooling Fresh sanitary napkins we launched in Thailand lean more towards those secondary functions. The napkins have become hit products, thanks to a newly developed cooling sheet that eliminates stuffiness and odor and maintains a cool, fresh feeling. Products that meet consumers’ high standards in basic functions, but also stand out in the market due to their secondary functions, are likely to become important in the market going forward.

Oka Our Center-in Compact pads are selling well in China. Women are increasingly using smaller handbags due to the shift to smartphone payments, which means feminine hygiene products also have to be more compact. Some women in China also use social media to show what products they're using, spurring demand for stylish packaging designs.

Noda If we can win the trust of consumers with our Sofy brand, we should be able to make them fans of other Unicharm products later in life. Going forward, we’ll continue to work hard on developing new products that exceed the expectations of consumers.

Oka To identify underlying needs, we’ll have to make full use of digital technology and ensure close communication between marketing and product development teams. I look forward to working with you and the product development team in the years ahead.

A Discussion about Product Development

Unicharm: A Story of Sustained Growth


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