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Unformatted text preview: Marketing Innovations to Consumers – By: Detlev Zwick
To market existing, established, and known products is hard enough. It is even more difficult to market a new product, even when consumers can place it in an established product category. Whichever way you look at it, it’s darn hard to market innovations -‐ and do not let anyone tell you otherwise. On the flip side, there is nothing more exciting than marketing a really new product and as management guru Peter Drucker once said: “Marketing and innovation produce results; all the rest are costs.” The trouble with marketing innovations is obvious when you think about it. Innovations are fraught with uncertainties of all kinds and that is what makes marketing them difficult. Consider a few simple questions: What is the best marketing (product-‐price-‐channel-‐promotion) mix to use for initial product launch? Which market segment should be targeted first and which ones should be targeted later as the product matures and competition moves in? What will the pace of adoption (i.e., how well the product is received into the market) be for this product? (When) will our technology be obsolete? Clearly, navigating the uncertain waters of innovation marketing is tricky and many well-‐rehearsed marketing principles simply don’t help much. So how do you survive? Below are three points of advice that every marketer charged with marketing innovative products should keep in mind: 1. PLACE YOUR PRODUCT FIRMLY IN A RECOGNIZABLE CATEGORY
Innovations are particularly intimidating for many customers while certain other products are not. There are many reasons for why this may be so, for instance, doubts about ease of use and uncertainty about product performance. A less well-‐known but extremely important reason is that consumers often cannot place innovations firmly into one, and only one, familiar product category. Consumers use a number of simple decision rules, called heuristics, to make sense of new products. When using heuristics, consumers essentially draw from an existing stock of knowledge to interpret the selling proposition presented to them. Consider Colgate 2-‐in-‐1 toothpaste & mouthwash. Over the years, consumers have adopted two different oral care categories for toothpaste and mouthwash. Unless you have a product that is strong enough to create its own new category, it makes a lot of sense to “attach” your innovation to an existing product category to enable consumers to use their heuristic skills to make sense of the offer. Therefore, marketers at Col gate-‐Palmolive made sure consumers see Colgate 2-‐in-‐1 toothpaste & mouthwash as a form of toothpaste with the added benefit of a mouthwash effect. That way consumers’ cognitive work to understand the product and evaluate its strengths and weaknesses was minimized and the intimidation effect diminished. By avoiding potential consumer confusion regarding product category, Colgate 2-‐in-‐1 toothpaste & mouthwash became one of the most successful new product launches in the company’s history. 2. GET TO KNOW YOUR CUSTOMERS
Innovators love to create new things and often become very attached to them. Emotional attachment to an invention is understandable, but it poses a problem when it comes to marketing. The inventor, seduced by the “coolness” and “amazing capabilities” of his/her invention is often the worst judge of what matters most in a product: consumer perception of the product’s benefits. It may not be easy to admit but ultimately the value of an invention is neither judged by the inventor, nor the angel investors, nor the venture capitalists, but by the consumer. So how do we know what consumers think? First, forget about focus groups and market surveys that marketers effectively use to research the market for more traditional and established products. As far as innovations are concerned, these research techniques are bound to fail simply because customers may find it difficult to articulate a need, preference, or desire for products that they cannot see or easily understand. Ask yourself whether the Walkman could have been the result of a consumer focus group? Rather than the traditional approaches, successfully researching the innovation market requires leaving the lab and getting down and dirty with lead users. Lead users are individuals that are willing to adopt and try out innovative products before these products are introduced to the mass market. In a sense, they are innovators in their own right, as they are willing to take risks with new and unproven concepts. Lead users are the heroes of innovation marketing because they provide us with a glimpse of what future needs may look like. They teach us how to improve novel products to address real-‐life problems that your competition may have not yet seen or heard. 3. CHOOSE YOUR MARKET SEGMENT AND YOUR STORY…WISELY
Selecting the best target market for your product launch is no easy task. Innovations are by definition radically new products, and reliable market knowledge concerning adoption rates is hard to obtain. If the wrong market segment is initially targeted, you may see your competitor take the gravy by owning the more profitable segment before you can recover from your mistake. Distributing the risk over too many market segments has been shown to be ineffective inmost cases because such a strategy requires the company to spread resources so thinly that no segment can be conquered at all. Therefore, unfocused marketing may spell doom for the innovation regardless of its intrinsic merits. This point can hardly be overstated. Initial target market selection should be guided by a rigorous weighing of the consumer’s perceived cost/benefit ratio because this is ultimately what determines product adoption. In other words, innovation marketers have to ask themselves: how compelling is the reason for a consumer to buy this product? Preparing and presenting a clear, simple, and unified story regarding the benefits of the innovation is the key to success. Today's consumers are time-‐starved and demanding. You need to have a good story to tell and you need to tell it fast. To practice, put yourself in the consumer's shoes and start by answering these two questions: What is the one thing your product can do for me? Why is it better than what I currently use? Finally, selecting and communicating with the initial target market must take place with the future in mind. That’s why it’s called the initial target market. In addition to considerations regarding projected rate of adoption and segment profitability, good innovation marketers select the initial target market for its ability to help spread adoption to adjacent market segments. Of course, capturing more segments likely means making more money on your innovation. It also allows the inventor to extend the life cycle of the invention by continuously administering small changes to the initial product that specific segments perceive as valuable improvements. In essence, marketing innovations is difficult and exciting, but most of all it is essential. Because of the nature of the product, uncertainty is a constant companion in the marketing process. For many reasons, the odds are stacked against success. Good marketing however can make the difference between market failure and commercial triumph. Innovators should regard marketing as a mediating institution between their innovations and the consumer. Through marketing, consumers learn how to approach, imagine, and interpret the new product. Through consumers, marketers learn how to approach, imagine, and create new innovations. If done well, marketing is a beautiful dialogue that benefits everyone. ...
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- Fall '11