“Britain rock bottom of world innovation league” was the leap-out headline from the business pages of The Independent this week. The story behind the headline was the news that the Thomson Reuters Top 100 Global Innovators survey was about to place the UK bottom of the innovation table ranked alongside Lichtenstein.
At a time when the economy is creaking and we’re all doing our level best to keep creating wealth and jobs, to say the headline and the story is unhelpful is something of an understatement. Is it, I wondered, another example of Britain’s ability to talk itself down and into the dreaded double dip recession?
On closer reading, though, I am happy to take issue with the findings. The survey has been put together based on patents: volume, global reach, how frequently a company has a patent granted and the so called influence of those patents.
But are patents really a useful (or indeed reliable or only) barometer of innovation in our society? I don’t think so. Using patents as the benchmark misses the fact that innovation is endemic in many UK companies, from the smallest to the largest, day in, day out. Simply registering hundreds of patents does not make a company successful; they have to be insightful and relevant patents, a few good ones will always be more innovative than a truck load of bad ones.
Few would argue that Google is one of the world’s great innovative companies; perhaps even a model for a 21st century brand. But Google is the perfect example of how innovative thinking isn’t always a success. Just think Google Buzz, Google Page Creator, Google Audio Ads and Google Wave to name but a few. The jury’s still out on Google Plus.
This brings forward the question: what is innovation?
One could argue that newer or smaller brands are innovating more because they have to make a footprint in the market and to simply replicate what is already there is unlikely to lead to success. There are plenty of SMEs innovating within their own sectors in order to compete but at a time when multi-nationals dominate western economies and are making in-roads into developing markets too, it can be difficult for smaller brands to bring their innovations to market. Some older, bigger brands meanwhile are ‘renovating’ to keep alive what they already have; this may mean replicating the innovations of smaller companies using their greater reach and bigger budgets. True innovation is always going to be more ground breaking and ‘new’ than renovation but it doesn’t actually mean that it will be more successful. The relationship between innovation and success is not necessarily a given.
One of the report’s authors, Bob Stembridge, comments in the article that the lack of UK patents (and therefore purported absence of innovation) is down to the economy. This is unlikely to be true as most Western countries are gripped by the same global downturn. One can argue that it’s a pretty level playing field in that respect.
A more pertinent question, perhaps, is whether we as a society really value innovation and recognise it well enough. In the current “heads down, just get through it” economy, few people lift their eyes above their computer monitors to see the real intelligent business thinking going on around them – whether that’s in product design or development or even, for example, in the way one can apply new thinking to something as apparently mundane as market research, yet we are.
Innovation isn’t necessarily about making things – innovation is a state of mind, a culture. In this sense, I think many of our businesses are ahead of our cultural curve.
Wednesday 23 November 2011
Tuesday 8 November 2011
When it comes to research, the devil is in the detail…
I read some interesting, if slightly perplexing research today, which headlined with the fact that around 80% of brands are not regarded as beneficial to factors like health, happiness, financial security and environmental protection.
The research was conducted among 50,000 people in 14 countries, including Brazil, China, France, Germany, India, Japan, the UK and US.
Some of the findings may have been superficially interesting but, when given thought, actually posed more questions than answers.
For example, the research was reported as saying that:
• Most consumers "would not care" if 70% of brands were to "disappear", while only 20% of brands were seen as having a positive impact on shoppers' sense of wellbeing.
• 30% of respondents in Latin America felt brands exerted a favourable role in their lives, totals falling to 8% in Europe and 5% in the US.
• 65% of people had a "very strong attachment" to Coca-Cola, but only 35% thought it improved their quality of life.
But what does any of this actually mean?
Generally 20% of brands make up roughly 80% of any market, because not only do they meet consumer needs concerning benefits but also because they can out-market the competition – the other 80% of brands make up niches within the market and are driven by other smaller needs and benefits but still needs and benefits nonetheless
With regard to those consumers who "would not care" if 70% of brands were to "disappear", this should come as no surprise either. Most consumers only buy about 20% of brands in a category regularly, so why should most consumers care if smaller brands that they don’t buy disappear?
We have a mantra that just because we can ask something, doesn’t mean that we necessarily should. When you are designing a piece of research, it is esssential to keep it focused on actual business needs in order to deliver relevant customer insights that genuinely serve the company’s commercial objectives. Anything less and the relevance and value of the research have to be called into question.
Whilst a sound fundamental understanding of consumer behaviour and market dynamics is what underpins most successful marketing strategies, for such research to have any true value, it must deliver practical, tangible insights that can inform either new product development or marketing planning. This means that research always needs to go deeper than the headline-grabbing numbers.
The research was conducted among 50,000 people in 14 countries, including Brazil, China, France, Germany, India, Japan, the UK and US.
Some of the findings may have been superficially interesting but, when given thought, actually posed more questions than answers.
For example, the research was reported as saying that:
• Most consumers "would not care" if 70% of brands were to "disappear", while only 20% of brands were seen as having a positive impact on shoppers' sense of wellbeing.
• 30% of respondents in Latin America felt brands exerted a favourable role in their lives, totals falling to 8% in Europe and 5% in the US.
• 65% of people had a "very strong attachment" to Coca-Cola, but only 35% thought it improved their quality of life.
But what does any of this actually mean?
Generally 20% of brands make up roughly 80% of any market, because not only do they meet consumer needs concerning benefits but also because they can out-market the competition – the other 80% of brands make up niches within the market and are driven by other smaller needs and benefits but still needs and benefits nonetheless
With regard to those consumers who "would not care" if 70% of brands were to "disappear", this should come as no surprise either. Most consumers only buy about 20% of brands in a category regularly, so why should most consumers care if smaller brands that they don’t buy disappear?
We have a mantra that just because we can ask something, doesn’t mean that we necessarily should. When you are designing a piece of research, it is esssential to keep it focused on actual business needs in order to deliver relevant customer insights that genuinely serve the company’s commercial objectives. Anything less and the relevance and value of the research have to be called into question.
Whilst a sound fundamental understanding of consumer behaviour and market dynamics is what underpins most successful marketing strategies, for such research to have any true value, it must deliver practical, tangible insights that can inform either new product development or marketing planning. This means that research always needs to go deeper than the headline-grabbing numbers.
Wednesday 2 November 2011
Baby 7 Billion and her message to brands
So the world has its seven billionth occupant, designated by the United Nations to have been a baby girl born earlier this week in the Phillippines; seven billion people, predicted to become eight billion by 2025.
On the surface this indicates a growing potential global market for multinational or aspiring multinational brands to target. After all, as The Guardian reported, with more than 1.1 billion people living without clean drinking water, opportunities certainly exist for companies equipped to transport and distribute water, and upgrade or build infrastructure. And that’s before anyone has even considered consumer goods. But the details behind the headline figure – India to become the world’s most populous company, Zambia’s population to double whilst others decline -are just as important in revealing how brands may try to tap into changing demographic trends.
Although the BRIC countries have been on most multinationals’ radars for some time, the news of population growth may lead to a new raft of 'initiatives'. But population growth alone may not be a good enough reason to 'chase a country'. Having worked on various washing powder launches in India in the past, one of my colleagues at Engage came up against the issue of home washing where wooden debris from the cooking stove was used as an abrasive to clean clothes instead of a detergent. Some 25% of Indians were still doing this and, as it is effectively free, they were understandably reluctant to spend money on something branded that does the same thing.
There are other lessons to be learnt here. Take Nokia, as an example, which has been spectacularly pushed to the sidelines of the mobile market as western consumers look to smartphones by Apple, Blackberry and HTC, whose stock market value recently surpassed Nokia’s. However, the threat to the brand is double-edged because in emerging markets like India, where Nokia is still the most trusted mobile phone brand, low-end local handset makers are beginning to attract an increasing number of customers.
It is important to get beneath the cultural, emotional and functional reasons for brand purchase decisions. Cultural and economic issues can impact on how brands develop differently in different territories. In some markets 'western' brands are too expensive and cheaper local alternatives that do a good enough job are preferred instead; in others brands can be a status symbol, creating different sorts of opportunity for different sorts of brand.
In Japan, for example, it has always been very cool for younger people to wear western brands. Over the last twenty years or more, younger Japanese have tried to differentiate themselves from traditional Japan and become more outward looking. Branding has been a big part of it and it is a process that may well be replicated in China in the coming years.
Brands have to button down the 'insight' for a product in emerging markets just as they you would in any other country. This is equally applicable to brand marketing strategy. How can you leverage social media in a highly populous country with limited Internet accessibility? How can you tap into cultural norms to make your brand’s arrival seem evolutionary rather than revolutionary. It’s not only about the potential size of the market, it is about the potential for brand acceptance in those markets and the two are not necessarily in tune with each other. Research is key to this and being sure you can develop a sound and growing consumer base as a platform for longer term brand success.
On the surface this indicates a growing potential global market for multinational or aspiring multinational brands to target. After all, as The Guardian reported, with more than 1.1 billion people living without clean drinking water, opportunities certainly exist for companies equipped to transport and distribute water, and upgrade or build infrastructure. And that’s before anyone has even considered consumer goods. But the details behind the headline figure – India to become the world’s most populous company, Zambia’s population to double whilst others decline -are just as important in revealing how brands may try to tap into changing demographic trends.
Although the BRIC countries have been on most multinationals’ radars for some time, the news of population growth may lead to a new raft of 'initiatives'. But population growth alone may not be a good enough reason to 'chase a country'. Having worked on various washing powder launches in India in the past, one of my colleagues at Engage came up against the issue of home washing where wooden debris from the cooking stove was used as an abrasive to clean clothes instead of a detergent. Some 25% of Indians were still doing this and, as it is effectively free, they were understandably reluctant to spend money on something branded that does the same thing.
There are other lessons to be learnt here. Take Nokia, as an example, which has been spectacularly pushed to the sidelines of the mobile market as western consumers look to smartphones by Apple, Blackberry and HTC, whose stock market value recently surpassed Nokia’s. However, the threat to the brand is double-edged because in emerging markets like India, where Nokia is still the most trusted mobile phone brand, low-end local handset makers are beginning to attract an increasing number of customers.
It is important to get beneath the cultural, emotional and functional reasons for brand purchase decisions. Cultural and economic issues can impact on how brands develop differently in different territories. In some markets 'western' brands are too expensive and cheaper local alternatives that do a good enough job are preferred instead; in others brands can be a status symbol, creating different sorts of opportunity for different sorts of brand.
In Japan, for example, it has always been very cool for younger people to wear western brands. Over the last twenty years or more, younger Japanese have tried to differentiate themselves from traditional Japan and become more outward looking. Branding has been a big part of it and it is a process that may well be replicated in China in the coming years.
Brands have to button down the 'insight' for a product in emerging markets just as they you would in any other country. This is equally applicable to brand marketing strategy. How can you leverage social media in a highly populous country with limited Internet accessibility? How can you tap into cultural norms to make your brand’s arrival seem evolutionary rather than revolutionary. It’s not only about the potential size of the market, it is about the potential for brand acceptance in those markets and the two are not necessarily in tune with each other. Research is key to this and being sure you can develop a sound and growing consumer base as a platform for longer term brand success.
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