The Strate­gic Mar­ket­ing of Innovation

In Brief

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.

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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:

1. adver­tise the ben­e­fit of your inno­va­tions to your cus­tomers. They may be unaware of the advan­tages inher­ent in these innovations;
2. if your inno­va­tions ben­e­fit your cus­tomers, charge them an appro­pri­ate price pre­mi­um for that benefit;
3. con­sid­er new ways to com­mer­cialise your inno­va­tions such as licens­ing, assign­ment or entry into new markets;
4. 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.

Con­clu­sion

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.