Technological Innovation and Leadership – The Guide to Successful Innovations (The 4th of a Many Part Series)
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In the previous part we raised the Shakespearean question – to Brand or Not to Brand?
Well here are some insights on how that answer could be dealt with – and hopefully prevent Innovators and Brand Managers from meeting the same fate as our dear friend Hamlet.
The 1st Criteria – is it a significant advance?
The innovation should be one step ahead of the next best – and it should also REPRESENT a significant advance, Representation of the advance is key. It has to be directly tied to the use experience. The innovation should also be News Worthy. This will adequately generate a word of mouth buzz for the brand, which is essential if the brand wants to build equity. Thus again going back to our Google Gears example – no other application allows you to club the world of Online document applications with your desktop. So essentially it’s a clear generic benefit – something never seen or perceived by users in the marketplace. Something that effectively becomes newsworthy as a result. Notice that the representation aspect here is key.
Zapak games is another company which has quite a few innovations. Again understand that their innovations are culturally rooted and hence have a clear newsworthiness in built if the company gets it even marginally correct. Consider the Bipasha game – there are games, there are games, and then there are games with Bipasha. Not saying that there haven’t been games with film stars in them but Bipasha touches the cord of the Indian on 2 levels – the cinematic as well as the sexual. So it stands out and thus has the opportunity to become an effective brand. So even tough their games do not really have a ‘significant advance’, they do have an advance with respect to the user – they REPRESENT an advance for the user – touching his emotional, psychological, and cultural chords.
The 2nd Criteria – Do the Customers care?
The innovation needs to be an advance that is meaningful to customers. Meaningful enough to change their buying behaviour and loyalty patterns.
That can be best done by the creation of a new category altogether.
Again we go back to Google Gears. It addresses the heart of the online document application problem. It WILL alter the way people view document applications.
There will be online document applications, offline document applications, and there will be applications that work online and offline as well – a new category.
Zapak here should take some flak for its ZapakMail. It did not have any relevance to new customers – it was supposedly fast. But so what? Gmail is fast as well. And so is Hotmail. And users already have accounts on other services; why in the World would they migrate to Zapak. In a sense Zapak did not pay the switching costs of consumers.
The other problem with Zapak was that its Media Planning was primarily targeting the existing email user. That is what came out of the media planning atleast.
They had one ad for the new user – the one that compared Zapak to a Postman. But that ad was shelved because of protests. So they only had the ads that target existing users running on TV.
Ideally they should have been growing the pie because they are not really innovative – they are ‘me too’. And pushing a ‘me too’ benefit is never the smartest idea.
The 3rd Criteria – Will it merit Investment over time?
An innovation worth branding often warrants investments over time to extrapolate more benefits, build the brand, and engage users. The investment that a brand receives, more often than not is directly proportional to the revenue stream. In some cases there may be exceptions when the brand is to play a key strategic role. This is particularly true for media and business conglomerates where there is a lot of cross business activity.
In general though, the input a brand receives will often be based on its current and potential business size.
So if the numbers do crunch well enough then then the innovation is simply not worth branding. Quite obvious isn’t it?
This kind of a decision is often the most difficult to make and is often based directly on criteria 1 and 2. I think the best position for an innovation to be in is one where it creates a sub category and provides an active benefit to the customer. The revenue making potential then automatically comes with the building up of loyalty however businesses must make sure that they can capitalize soon enough before other “me too’s” flood the marketplace.
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We have some great innovators who read these pages – i haven’t quite been able to solve the 3rd Criteria. Could you please shed some light?
“The innovation needs to be an advance that is meaningful to customers. Meaningful enough to change their buying behaviour and loyalty patterns”
Wont all innovations fall into that category?
I will like to add that branding will depend on how easy is it to market the product and how imitable is it.
If the product can be easily imitated by having a workaround on the patent etc, then your competitor can always come out with a similar product. In that case things will depend on how easy or difficult it is to market the innovation. If your competitor has complementary assets like service network, sales network, customer loyalty etc its better you sell your innovation to your competitor. Otherwise your competitor can find out a workaround of your innovation and come to market alone.
On the other hand if you competitor isn’t so powerful or even if powerful doesn’t have complementary assets you can think of branding early to have advantage over your competitor. For e.g take case of Airtel. When it launched operations in India, there were powerful competitor like BPL, Essar-Hutch, Tatas etc but all of them lacked the complementary assets to make mobile services successful and all of them have to start from scratch. In that case Airtel was on even ground with others and therefore could afford to go alone with entire gamut of marketing.
Pavi –
I dont think so – while you may be correct with respect to innovations that reach you as a consumer as a result of favourable word of mouth, its not an obvious line by any means with respect to all innovations!
Consider the number of products thats may have been ‘innovated’ upon but are scrapped before production. Consider the failed innovations that do get produced but are never accepted by the consumer.
Do you agree?
Rohit – excellent addition! Really awesome perspective.
Since you mentioned product innovations that can be copied id also like you to have a read of my article on evolutionary design (you can just type it in search) on WATBlog im sure ul get easily linked. Im sure you will enjoy it.
Another addition to what you said – its often observed that the No. 1 player is never really the most ‘innovative’ – they merely capitalize upon ideas quickly – and quickly enough so that they are perceived as the ‘innovator’. Consider Totyota with hybrid cars – there are many such examples.