Guest Post by: Denise Lee Yohn
A few weeks ago, Forbes ran an article (http://www.forbes.com/2010/01/22/retail-marketing-products-barbie-hyunda...) entitled, “Innovation Beyond Apple.” The piece de-briefed a discussion among executives from a range of consumer goods companies including HSN, Mattel, and Chrysalis, an incubator company for emerging brands. It challenged readers to think about innovation differently, and many of the points resonated with me.
The article argued that, although many executives are chasing Apple by pursuing their own killer product, “focusing exclusively on product innovation is a mistake for most companies…Innovation can [also] be communicated through retail outlets and partnerships with other marketers.” It pointed to Mattel’s award-winning 35,000 square-foot Barbie flagship store in Shanghai which includes a spa where mothers and daughters can indulge themselves and HSN’s partnership with designer Badgley Mischka as examples of marketing innovations which drive sales as much as new product developments have.
This different way of thinking reminds me of a motto the marketing team had at Sony Electronics when I headed up Brand and Strategy there several years ago. We pledged “to be as innovative in marketing as our engineers and designers were in products.” This aspiration led us to pursue a target segment-led marketing planning framework (vs. the traditional product category-led approach) and new programs like a film-making contest in conjunction with the SXSW film festival.
The article also called to mind a quote I read from the late marketing leader, Geoffrey Frost, who held the CMO position at Motorola and Nike. His approach to marketing: “Your ads are the most pervasive products you make.”
Although the rising and falling of both Sony and Motorola in recent years has largely depended on product innovation (and the lack thereof), marketing innovation (and the lack thereof) has also played a role in the performance of these companies.
marketing innovation -- why
That’s because marketing can add value to products when you have an innovative product (Motorola’s tie-in with Dolce & Gabbana for its glamorous limited edition gold RAZR comes to mind), and marketing can create its own value when you don’t. Frost believed, “When you start thinking of the advertising as a product, and the product as your ultimate form of advertising, and really subject both to the same standard, it gets really interesting. When they accelerate together, you get a great feedback loop going.”
In other words it may be difficult for any company to sustain a stream of breakthrough product innovation, so marketing innovation fills in the gaps. And as it becomes increasingly difficult for companies to differentiate their brands on product features alone, marketing opens new dimensions for distinguishing brands.
marketing innovation -- what
Marketing innovation can take many forms, including:
distribution – channels which are new for the category or new altogether – e.g., consumer electronics vending machines which have popped up in airports and other high-traffic venues
partnerships – relationships with unlikely business partners – e.g., Mattel partnered with MAC cosmetics to launch a Barbie line of products
customer experience – e.g., The Container Store allows shoppers to forego shopping carts and instead use scanners to select items in store – then products are delivered to their homes
community – networks of people engaging with each other and with the brand – e.g., Best Buy’s Twelpforce
marketing innovation -- how
Along with this new platform of innovation must come new approaches to innovating:
dollars allocated to Marketing R&D. Instead of demanding a ROI for every marketing expense, companies should budget for the exploration of new marketing ideas. Of course, marketing R&D should follow a development path with test and learn periods similar to product R&D.
tolerance for marketing failure. New product failure can never be completely avoided and so the same standard should be applied to marketing. Instead of retreating to conventional marketing practices after a couple of unsuccessful attempts at innovation, companies should expect a steep learning curve for marketing – especially as new technologies open up new communication channels.
open-ness to collaboration and outside expertise. Just as many companies, most notably new product machine P&G, are opening up their product innovation process to outside parties, marketers should seek out new collaborations and partnerships. This may require new confidentiality and compensation standards.
integrative thinking. Product development and marketing should no longer be thought of as separate disciplines – instead, a more integrative thinking approach is called for. Innovation can combine product and marketing drivers and consider technological possibilities alongside unmet customer needs and desires. A holistic approach may lead to bigger, more substantive breakthroughs.
Above all marketing innovation requires the company to become a learning organization. That is, one which is open to developing new competencies and which takes risks in the name of driving new growth.
Image source: picturenarrative