The Strategic Marketing of Innovation
Innovation should be the key element in your business strategy. However, innovation only has commercial value when it satisfies the needs of your target markets By satisfying your customer’s needs in a unique way, innovation provides not only increased revenue but also justifies higher margins which can be the engine for the future growth and profitability of your business.
Marketing strategy in innovation
The first step in an effective business plan lies in devising an appropriate marketing strategy. The objective is to discover the needs of the market and to set out to meet those needs in a unique way. This is the essence of commercial innovation. Notice that the process must always start with the market’s needs. This is the antithesis of the old misguided adage:
“Build a better mousetrap and the world will beat a path to your door”
Marketers need to bring innovation to the market in terms of unique inventions, designs and concepts but only after they have done their homework in assessing whether these particular innovations meet the needs of their target market.
Market investment in innovations
Commercialising innovation involves the use of substantial financial and human resources. If a marketer is thinking strategically, this use of resources should be seen as an investment rather than an expense. An invention has little intrinsic value until a customer is convinced of the practical benefits that invention brings to the customer’s business. A brand has no significance until a customer recognises that brand as a badge representing an innovative and high quality service or product. Once the customer understands and accepts the value of the innovation, it becomes a long term source of revenue and profit for the supplier.
Protection of innovation
If it is the role of marketers to commercialise innovation, it is also their role to protect that innovation. Once an innovation is commercialised, it crystallises as intellectual property which needs to be protected. Brands should be registered as trade marks. Designs and inventions should be registered as designs and patents. Creative work should be clearly defined in terms of copyright. Trade secrets should be protected by strict security procedures.
Intellectual property rarely appears on the balance sheet, but it can be the most valuable asset that a business possesses. In view of the fact that marketers are entrusted with the obligation to commercialise innovation, they also have the duty to protect the commercial value in that innovation.
Exploitation of innovation
You may recall the Bible story of the master who gave each of his stewards a number of talents to use and exploit. One of the stewards buried his talents and kept them safe for his master’s return. The master was displeased with the steward. The moral is that we are all meant to make use of our talents. Within any business there may be buried many unused innovations. These innovations need to be identified and exploited. Here are some simple ways to exploit the innovations within your business:
- advertise the benefit of your innovations to your customers. They may be unaware of the advantages inherent in these innovations;
- if your innovations benefit your customers, charge them an appropriate price premium for that benefit;
- consider new ways to commercialise your innovations such as licensing, assignment or entry into new markets;
- identify and value your innovations as intellectual property, thereby increasing the perceived value of your business should you later seek equity investment or business sale.
Marketers have a clear role in initiating and commercialising innovation. They therefore have an obligation to ensure that this innovation is identified, valued, protected and exploited. Innovation lies at the heart of marketing. Disregard innovation and a marketer’s creativity vanishes. The marketer then has nothing to sell but price.