Marketing and Innovation are Inseparable- Valutrics
by Kevin McFarthing
One of my favourite business aphorisms, although I can’t remember the source, is “sales is about selling more of what you have; marketing is about having more of what you can sell.”
Another one I quote often is from the famous Peter Drucker – “because the purpose of business is to create a customer, the business enterprise has two – and only two – basic functions; marketing and innovation. Marketing and innovation produce results; all the rest are costs. Marketing is the distinguishing, unique function of the business.”
The most fascinating – and important – aspect links the two; what role does marketing play in innovation? Some of you may be thinking that marketing is just about communicating the innovation; talk of marketing meaning advertising. “We now need to ‘market’ the innovation.” It’s a lot more involved than that, or at least it should be.
Marketing Defines
Marketing should play the lead role in defining priorities based on strategy. Priorities include targets for idea generation and defining the boundaries. This does not mean that Marketing should dictate ideas; rather, they should lead the process, involving other parts of the company and diverse external sources as appropriate.
Innovation is as much about insights as ideas. The insights come from knowledge of consumers, users and customers (terminology differs by industry and company……), and provide opportunities to meet recognized needs, as well as to identify potentially unrealized ones. Marketing should lead the search together with colleagues in Market Research.
One exception to the general guideline that Marketing defines, is in those companies with an ambidextrous organization for innovation. A Marketing team too close to today’s business may not be sufficiently aligned to the needs of a longer term, potentially disruptive, business group.That’s not to say that a definition isn’t made, it’s still essential.
Marketing Integrates
Innovation is all about establishing desirability, feasibility and viability. Do customers want it? Can we make it? Can we make money from it?
Desirability is led by marketing and market research. A lot of skill and intuition is needed to have a concept description or a Minimum Viable Product (or Prototype) that gives the closest experience to the final target as possible.
Feasibility is often led by RD. They need the technological capability to deliver the product, and need to work closely with Supply to be able to make it cost-effectively. If they can’t do it, they should find somebody outside who can.
Viability is decided by Marketing and Finance. This can be the toughest part, when everyone in the project team wants the most benefits for the lowest cost, selling at the highest price in unbelievably high volume. For some strange reason,it doesn’t always work out like that.
There are tradeoffs to be made, and somebody needs to have that overview. The people best placed to do that are in Marketing. For example, they may decide that cost should come out at the expense of benefits, in order to achieve viability.
While certain elements are led by different parts of the company, it’s not in isolation. Multi-functional teams ensure input from all the relevant parties so that in innovation, marketing is everyone’s job. The elements of desirability, feasibility and viability should be established in parallel with multiple inter-connections. It’s dangerous to have too much disconnect.
So, an integrative process is needed, and somebody needs to lead it. In most companies this is Marketing. If it happens but not in a department called Marketing, that’s less of a problem, as long as it is done.
Marketing Communicates
Finally, the communication role of Marketing comes into play.
Distinguishing between a feature and a benefit can be a constant debate in innovation, exemplified by the classic example from Theodore Levitt. When a consumer buys a drill, he or she doesn’t need a drill, they need a hole. The benefit is the hole. Communication should primarily be about the benefit, whether that is the efficacy, appeal or convenience.
I’m a big believer in simple. That’s why over the years the description of features with everyday products like TVs has been very frustrating, let alone the consumer-hostile nature of the on-screen menus. They’re usually logical, but often impenetrable.
Famously, communication of innovation needs creativity, from classic TV ads to digital media. In essence, communication is about the benefit; the feature is the “reason to believe”. The communication then needs to be delivered at the right time to the right people with the right media, to have the right impact.
So, how does your Marketing serve your innovation? Does it define clearly and collaboratively? Does it integrate desirability, feasibility and viability in an optimal manner? Does it communicate with clarity and impact? And finally – does your innovation succeed?
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Kevin McFarthing runs the Innovation Fixer consultancy, helping companies to improve the output and efficiency of their innovation, and to implement Open Innovation. He spent 17 years with Reckitt Benckiser in innovation leadership positions and also has experience in life sciences. Follow @InnovationFixer