Renee Prejean-Motanky

IS INNOVATION STILL THE BUZZWORD FOR A WINNING BUSINESS?

In Integrated Marketing Strategy, marketing, marketing campaign, Marketing Plan on March 3, 2011 at 4:04 pm

The buzzword for business success, for as long as many of us can remember, has been INNOVATION; how you keep consumers tantalized, competitors at bay, and margins growing. LEADERSHIP was all about fostering the creative environment that generated the ideas that gave you your edge.

Different kinds of outer diapers. Baby diapers.

But maybe innovation’s day is done. Not that long ago, a leading consumer goods company invested vast amounts of time and money developing an innovative new product: a light-weight, environmentally friendly, impeccably dry diaper—with built-in cream to prevent diaper rash! The marketing mavens behind it confidently expected to roll out their new product with a stiff price tag attached because it was the answer to every parent’s prayers.  This was innovation marketing at its best: as old products were copied and discounted, you introduced newer, more inventive ones at higher prices.

But that dream diaper never made it to the marketplace. Why? Because it cost too much! When given the choice between the “all-in-one nappy” (it was to launch in Britain where diapers are called nappies) and traditional choices, modern consumers settled for the old solution because it was cheaper.

Every business should think long and hard about this diaper because it signals a deep shift in the market.  What it shows us is that new technologies mean that cheap imitations are now very good, and the Internet makes it very easy to find them. With good, cheap copies readily available, and consumers and businesses both fleeing from debt, the extra-featured “deluxe” version of a product isn’t compelling. Today we’re all buying generics. 

The old way of segmenting markets is rapidly changing (right along with the economy.)  Buyer strategies have changed in all echelons.  Most, when given the choice between multiple features or cheap, cheap wins! Less is now more. The battle for innovation has faded and the battle for value (defined by price) has returned with a vengeance, reminiscent of past times. 

That doesn’t mean quality and customer service can slip: if anything, the anxious consumer is more demanding than ever. The belief that you can keep customers loyal and trading up has vanished. This is a lesson that Southwest Airlines taught many of its competitors.

That doesn’t mean the challenge of innovation fades, just that it focuses more on processes rather than products… How can you deliver your product for less? How do you make it easy for your customer to find you and stick with you? In this new market, customer loyalty proves more difficult to win. Only price and ease of access prove compelling.  Consumer anxiety has provoked change that is likely to last.  “If I can find a stress-free experience at a lower cost,” that is the winning combination!

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: