Leveraging Marketing Innovation to Drive Profitable Growth

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As a discipline, marketing innovation encompasses the parts of the overall corporate innovation strategy that deals with the promotion of products and services, the way in which we communicate with customers, and the tools and methods used to bring products and services to market. Innovation in marketing is born from a variety of areas, including research into customer needs, prototyping of ideas, and the creation of new products, services or processes. These are all key tasks in the overall corporate innovation strategy, and marketing innovation plays a very important role in ensuring the business’ consistent growth.

Marketing and Innovation – Inseparable

Peter Drucker once said, “Business has only two functions – marketing and innovation”. He considered marketing and innovation to be an important basis for a company’s success.

Perhaps this is reason enough to take a deeper look at the purpose and role of marketing from an innovation perspective. Marketing includes tasks designed to increase revenue. The focus is on customer and market orientation – all products, services and processes are to be aligned with the needs of customers and users.

Marketing has a very comprehensive role which often includes:

  • Market research and the identification of customer needs. Both current and future market needs, while also exploring for new potential markets.
  • Marketing strategy. Based on overall corporate strategy, marketing plans are drawn up. But in many cases, the marketing team also plays a leading role in the development of companywide strategy, as the marketing team is able to articulate strategically important insights into customer and market needs, desires, and behaviours.
  • Marketing mix. The classic 4Ps of marketing which include: product design, pricing policy, communication, and the type of distribution and sales channels.

In businesses with stalled or declining growth, innovations in sales and marketing uncover new sources of revenue. Often times, additional revenue can be generated from existing customers by focusing on effective account management processes. For example, this could be accomplished by redefining the customer experience, or from the development of a culture of consistently providing value to clients.  

Learn how product innovation helped one of our clients accelerate their growth potential by over 38%.

These overlaps and close interrelationships make it clear that marketing innovation exists and must exist.

Definition of Marketing Innovation

Marketing innovation covers all of the activities that contribute to the overall market success of new products and services. If one considers that of the primary tasks of corporate innovation is commercial success, or business/profit growth, it becomes clear that marketing innovation plays an extremely important role in the overall innovation process.

Marketing innovation therefore includes a very wide range of tasks. Specifically, all the activities that are related to customer and market orientation and that enable the successful promotion of a new product or service.

On the front-end of the innovation process, marketing innovation contributes:

  • Research into customer requirements in specific market segments or product categories is about understanding the current needs in the course of a concrete innovation project, but also about the anticipation of future needs and, as a result, the discovery of new innovation potentials.
  • Research into market potentials such as the attractiveness of a market, the size of a market, the potential for new products, etc.

In the course of the product development process, marketing innovation has the task of continuously involving customers and users in the process. The aim is to collect feedback from both customers and the market on current developments. In the form of concept, prototype and beta tests, feedback on new products is obtained in order to test the future acceptance of the product and to incorporate the experiences and ideas into the development process for of future innovations.

At the backend, as products and services prepare to go-to-market, marketing innovation again plays a part in crafting and delivering communications, monitoring the effectiveness of sales resources, automating marketing activity, etc.

Marketing innovation therefore includes tasks in the front end, development and backend of the product lifecycle, making it a very important cross-divisional function that plays an important role in the entire innovation process. This also underlines how closely the tasks of marketing and innovation are interwoven together.

Importance of marketing innovation

As we now know, marketing innovation plays a role in all phases of the overall innovation process, therefore ensuring proper customer and market orientation – an important asset avoiding the failed launch of an innovation project, product or service. However, if marketing innovation is not enforced and pursued with priority, there are certain risks and dangers that may be introduced:

  • If there is a lack of information about the market, customers and their needs (or if they are inadequate, e. g. not representative or incomplete), then wrong decisions can be made with regard to the product or the target market. For example, the product is misplaced in the market, the wrong target market is chosen, or irrelevant customer needs are addressed.
  • The product does not sell. This does not necessarily mean that the product is bad. There are plenty of mediocre products that are marketed perfectly and are therefore more successful than those that are top of the line but are badly marketed.

These two points make it clear that marketing innovation is an important lever for the success of innovation. Around 60 to 80 percent of new products fail and can likely be traced back to a lack of customer orientation and marketing. Savvy business leaders make marketing innovation a priority and work closely with both the sales and marketing team to ensure a culture of innovation.

Conclusion – What is marketing innovation?

Marketing innovation works in the front end of the innovation process to explore market potentials and customer needs, gets feedback from the customer in the development process and markets the product at the back end of the process, and ensures that new products and services are geared to the right market and customers. This is one of the biggest success factors in increasing revenue opportunities while eliminating product failures and unnecessary waste.

Innovation comes in many forms. By paying attention to customer needs, data insights, and fostering a culture where employees are empowered to think outside the box, innovation begins to present itself organically. When we take it a step further and begin to commercialize innovations, growth is soon sure to follow.

 

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