One of management guru Peter Drucker’s most famous quotes is:
…there is only one valid definition of business purpose: to create a customer…. It is the customer who determines who the business is. Because it is the purpose to create a customer, any business enterprise has two—and only these two—basic functions: marketing and innovation. (Drucker, 1954, pp. 39-40).
My previous blog post discussed a bit what the term “marketing” means. This blog post describes the necessary ingredients for successful commercialization of innovation. Simply, successful commercialization of innovation requires effective marketing.
Many empirical studies conducted by marketing scholars demonstrate time after time: The best innovations are not necessarily the ones that win in the marketplace. Rather, the innovations that win in the marketplace are the ones that couple “good enough” technology with effective marketing. In other words, innovation and marketing have an interactive (synergistic) effect in new product success.
To illustrate the importance of innovation and marketing here’s a couple of classic examples where companies ignored either one or the other. First there’s Ford. When the company developed the Edsel, employees made a list of all the features the company used in their cars. They proceeded to put as many of them as they could into the Edsel thinking more is better. However, rather than building a car Ford thought would attract everybody, they built a car that attracted nobody.
Then there’s Apple. The company introduced the Personal Digital Assistant (PDA) long before anyone else. It was called the Newton. Unfortunately, it was too early, and the market did not accept it. After spending lots of money on research and development, Apple had no choice but to pull the Newton from the market. Later Palm entered the market with a similar product that became popular. It was largely a matter of timing.
To avoid omissions made by some well-respected companies, here are keys to ensure success:
With respect to innovation
1. Determine which features and benefits the customers in your target market will find most compelling.
2. Ask your customers questions to determine the sweet spot of price and benefits that provides the most attractive combination relative to competitive products.
3. Ask you customers if this is something that is attractive to them.
4. Find out what would make it more attractive.
5. Ask your customers if there is anything you have overlooked.
6. Check to see if you are biased in your assessment of your innovation, because you think you know what your customers should want.
With respect to marketing
1. Check to see if you clearly defined your target market.
2. Clearly articulate your value proposition.
3. Create a specific budget allocation to spend on marketing activities, such as creating awareness in your target market, measuring responsiveness, investing in building relationships and goodwill, and sustaining this for a consistent, long-term image.
4. Match marketing efforts with the typical customer’s buying cycle.
5. Ensure your marketing and follow-up efforts all project that you are a valued, trusted provider.
Great innovation without great marketing is not likely to succeed. Similarly, the best way to kill a bad product is to market it. The most successful new products are those that couple innovation AND marketing in a savvy fashion.
Drucker, Peter (1954), The Practice of Management, New York: Harper and Brothers.
About the Author:
Jakki Mohr has a Ph.D. in Marketing from the University of Wisconsin. Her popular book, Marketing of High-Technology Products and Innovations
