The Truth About Innovation: Part Three

Continued From Part Two

By now, the point of this three-part article should be abundantly clear. We in industry have overused the term “innovation”, and are therefore somewhat desensitized to technological and product developments. Consumers barely even notice most of what we accomplish due to the continuous nature of our innovations.  Here is the rub.

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New product development in our sector is really driven by needs and wants in the marketplace, not technology. This is known as the “Marketing Concept”, the dominant strategic approach in contemporary marketing, wherein marketers identify a need in the marketplace and deliver a bundle of features and benefits (a product) that addresses that need. Technological advancements are fine, but generally result in barely noticeable, incremental innovation. This means that product development is primarily under the purview of marketers since these professionals are responsible for assessing consumer needs. Research and development then follows the lead of marketing to insure that what those folks are developing has a relevant market application and is something consumers actually want. Many firms learn this simple lesson too late and expend massive resources pushing something that doesn’t resonate in the marketplace.

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Unfortunately, this is often lost on most industry people who have never taken business classes, but it is very basic science to those of us who have. We learn that new products (which fail 80-90% of the time) should be need-driven in almost all cases (excepting the area of needs consumers didn’t know they had in the first place, which is rare). The firm’s job is to address, and in many cases exceed, expectations in meeting the market need while differentiating their offerings from competitive and substitute products. This attempt at differentiation generally results in a whole heck of a lot of non-innovation, some continuous innovation, and an occasional dynamically continuous innovation, but rarely does it result in something that disrupts the industry.

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Nevertheless marketers and media alike will continue to push “the next big thing” as manufacturers look for the next big ingredient and retailers tailor their product mix to meet the demands of their customer base. I will take the road less traveled and remind everyone that new market applications are what spawns innovation in the personal care world, and not necessarily a new ingredient that meets an existing need. So let’s dispense with the hype and begin talking about ingredients and products in terms of how consumers view them rather than “innovations” that do not matter to the marketplace. Indeed market applications are crucial to justifying the use of certain ingredients as well as the development and commercialization of the products themselves. May The Marketing Concept Be With You.

Discussion: How do you use the term "innovation"? Does Apple have some products that are "more innovative" than other? Explain.