MKG + INV
One of the many themes Peter Drucker wrote about was the need for organizations to combine both marketing and innovation
in order to create value: "Because its purpose is to create a customer, the business has two - and only two - functions:
marketing and innovation. Marketing and innovation create value, all the rest are costs."
Why is it that both marketing and
innovation are required to create value? The reasons are simple. Not only should an organization be capable of developing
ground breaking innovations but those within an organization must also be adept at: (1) identifying market opportunities;
(2) successfully launching new products by demonstrating to consumers how new products meet unmet consumer needs or better
satisfy existing needs; (3) building consumer demand for the new products; and (4) developing and nurturing brands once
the new products are in the market.
Our goal at the The Center for Marketing and Innovation Studies is to identify and examine organizations that combine marketing
and innovation to create value.
You can download the 2009 MKG +INV 100 report by clicking the link at the top of this
page. Make sure you bookmark and revisit our website periodically as we have a full research agenda and white papers will
be released as they become available.
Every time I teach marketing management to MBA students, I ask my students to write
an assignment linking marketing and innovation. Students are required to identify an innovation, any innovation that interests
them. Next, students examine the innovation by paying particular attention to the customer need(s) the innovation solves,
and therefore the overall value of the innovation to the market.
This is an important part of the assignment because it is too easy for those managing
innovations to focus on the features of the product or service and not pay enough attention to the customer needs the innovation
solves.
The conversation
around the innovation changes significantly if it is framed in terms of how the innovation solves customer problems. If we
take the view that customers buy products to satisfy needs, it makes sense then that customers evaluate innovations based
on how well the innovation satisfies a need. We also know that before customers adopt an innovation, they need to be convinced
that the innovation will meet their needs better than other products or services that are currently available on the market.
I bundle these
ideas up in the Problems-Solutions Framework™,
something I developed and wrote about in my most recent book, “Marketing Through Turbulent Times”. To
me, successful innovations are more likely to have established a tight connection between the innovation itself (that is,
the solution) and customer needs (that is, the problem). Too often innovations fail - not because the innovation
is a bad idea but because those managing the innovation failed to link the innovation to a compelling customer problem.
This semester, students critiqued a range of very interesting innovations:
Groupon, Spotify, Kindle Fire, Pandora Internet Radio, Blu-Ray, the iPhone, Kickstarter, and Whole Foods. Not only
did my students examine these innovations but they also assessed how the innovation is currently marketed before developing
a set of recommendations on how the innovation could be marketed in the future. The Problems-Solutions Framework™ works well because students develop
insights they might not have otherwise come up with. The assignments were interesting to read and a number of the innovations
we have on our "watch list" because we question whether they be successful.
The
2011 Update #2: The 2010 Report
The 2010 MKG + INV 100 report took a while to produce this year. There were a number of reasons for this: the data
seemed to take forever to come through COMPUSTAT, my Research Assistant moved to Knoxville TN for a promotion (!), and I spent
months tinkering with my research methodology. The 2010 MKG + INV report followed the same method as 2009
but I plan to do something quite elaborate for 2011.
