If++ Forum Issue

Marketing an Innovative Product or Service

Guest Author: Robin Dilley MCIM (Chartered Marketer), MIPR

" We ought not to be over-anxious to encourage innovation in cases of doubtful improvement, for an old system must ever have two advantages over a new one; it is established and it is understood. "

Charles Caleb Colton, Writer (1780 - 1832)

"differentiating and added value factors that will encourage the market"
Understanding Innovation
Throughout my career, I have visited many organisations who are seeking advice on how to market products or services that they claim are innovative. In many cases these innovative ideas are simply developments of items already well established in the marketplace. They lack the necessary differentiating and added value factors that will encourage the market to change from the product or service already available through the distribution chain.
Often the ideas have progressed through to expensive prototypes and, in some cases, even packaging design, branding and marketing concept before it has been established whether a market exists at all.
Whilst it is recognised that product innovators are protective of their ideas, it is recommended that a bona fide marketing expert is called in at an early stage. The marketing professional is used to working under confidentiality agreements and can provide reliable advice and a valuable sounding board before too much investment has been committed.
Having said that, there is no easy formula for success. The vision of an unknown inventor is not always shared by the distribution chain or the end user.

Key Characteristics of an Innovative product or service

The Marketing Improvements Group at Cranfield University carried out some research amongst some of the UK's fastest growing companies. This provided some pointers that the innovator should consider as part of the marketing planning process.
True innovation is defined as something that is either unique (very rare), or sufficiently different from the offerings currently available to the targeted consumer, to make it a viable and potentially profitable alternative.
Having determined that a potential market exists, the same criteria apply in constructing a marketing action plan as for any other product. Areas to consider include pricing, distribution, fixed costs, profit expectations, distribution chain identification, marketing message, sales approach to be employed and competitive activity.

Developing the Marketing Action Plan

"even limited research, and a well constructed plan, can make a tremendous difference" Inevitably the management style of the organisation or individual responsible for product innovation is visionary. This visionary zeal will not always be sufficient to convince potential buyers that they should risk their reputations by "putting their heads on the line" for something that is new and untried. But visionary zeal backed up by even limited research, and a well constructed plan, can make a tremendous difference.
An outline plan should be developed, with outside assistance, at an early stage of the development process. It is a cost, but a well thought through plan can save a lot of money and heartache later!
The planning process should rigorously challenge the credentials of the proposed product or service. This process will identify the end user, potential competitive products currently in the market and the possible chain of distribution to be employed.
A sales argument should be developed that explains the added value benefits afforded and the differentiating factors that make the new product or service truly innovative.
The length of the distribution chain can seriously affect profit expectations.
The shorter the chain the higher the profit potential!
It is worth remembering that the end purchaser will pay a premium for something that is truly new and innovative. There is always a cache in being amongst the first to own something that is really different. These "early adopters", as they are called, will extol the virtues of their new "toy" and spread the word to other potential purchasers.
Many companies with innovative products fail to amortise the high cost of product development into the price charged to the first link of the distribution chain. In consequence, they provide profit for the rest of the chain without cashing in on their vision as they should.
It is worth looking at ways of reaching the "early adopters" directly through mail order or e-marketing during the initial distribution phase. This might limit unit sales initially but will maximise the profit potential and attract the volume distributors.

Protecting the Investment

If the marketing plan is robust, it will pinpoint the potential and highlight the risks. It then becomes a judgement call as to whether the potential outweighs the risk. Having made the decision to move forward, organisations exist to assist and reduce the high cost of prototyping, the potential minefield of packing and product legislation and the benefits of copyright, patent or intellectual property protection.

Robin Dilley

ROBIN DILLEY MCIM Chartered Marketer MIPR

Robin Dilley is an experienced communications practitioner with over 42 years of practical marketing experience. He is a Member of the Chartered Institute of Marketing (with Chartered Marketer status), the Marketing Society and the Institute of Public Relations. After an early career in advertising, he became Sales Promotion Manager with CWS Ltd., in the Menswear Division, before joining Wrangler Jeans in 1975, first as Head of Advertising and then Marketing Manager. In the latter capacity he was responsible for developing an international brand strategy (all countries with the exception of North America) and providing marketing and promotional support to international subsidiaries and licensees.

Along the way, communications campaigns developed under his guidance not only achieved corporate objectives but also international acclaim with awards for advertising at festivals in London, New York and Cannes, as well as major British awards for Advertising, Sales Promotion and In store Display.

In 1991 he left Wrangler to set up his own integrated marketing consultancy, Robin Dilley Associates. He is also a Senior Partner of Strategic Insight, a business development consultancy, and a Director of Annexeon Ltd.

In 1992 he founded, and still co-ordinates, The North Nottinghamshire Marketing Group, a business-to-business cluster organisation. Renamed The Marketing Group, it now draws its membership from across the East Midlands.

With the help of grants from EMDA and the ERDF, Robin helped to plan and develop the "Innovation in Marketing" web portal on behalf of The Marketing Group. He also is the author of "A Practical Guide to Marketing", the online learning programme that is available on the site.

Robin has gained an enviable reputation for excellence in strategic and communications planning and has worked with businesses of all sizes, using his experience in internal and external communications, to improve the quality of message output in order to more effectively manage customer and supplier relationships. He is in demand as a speaker and presenter of seminars and workshops on a whole range of business and communications development topics.