Meaningful innovation makes the difference

by Nigel Hollis | August 05, 2015

My recent post titled, “Getting realistic about the odds of marketing success” sparked a couple of interesting comments. Take, for example, this quote from a comment by Shann Biglione,

“If marketers spent more time influencing salience rather wanting to be seen as innovation junkies, we would have better marketing.”

Some of Biglione’s previous comments make it clear he is a big proponent of Professor Byron Sharp’s view of the marketing world, but is he correct in making this assertion?

One of the reasons I wrote the previous post is because I believe that Sharp’s “rules of marketing” hold good when the status quo rules. Every brand is seeking to improve the probability that it is purchased, and a state of dynamic tension or stalemate is reached where no one brand wins big. Success all comes down to how well you play the existing game. Under those conditions, improving salience is a key growth driver. Once this state is reached the stalemate can last for years (in my analysis 45 percent of categories saw no significant change the course of five years).

The obvious conclusion is that under those conditions marketers should spend more time influencing salience than worrying about innovation… except that if you do not worry about innovation then someone else may identify an opportunity and your brand will get disrupted (along with others).

Take the example of when Coca-Cola launched I LOHAS bottled water in Japan. The brand became the number one mineral water sold in Japan in just six months and undermined several well-established brands. No doubt those brand’s marketers did not think there was much opportunity for innovation in a familiar and growing market.

JapaneseWater646x366.jpg

Coca-Cola’s research revealed that, while Japanese consumers wanted to do something about environmental issues, they admitted that their behavior had not changed. Thin and lightweight PET bottles provided consumers of Coca-Cola’s I LOHAS the chance to create a ritual out of twisting the bottle, and offered them the opportunity to choose a brand with a smaller carbon footprint, thereby demonstrating their commitment to the environment.

The marketing team also turned what had been a negative into a positive: rather than publicizing the qualities of a single source like the French Alps, I LOHAS is promoted as coming from seven local sources around Japan. The BrandZ data for 2012 suggests that the brands which suffered most from the launch of I LOHAS were the premium imports like Evian and Volvic.

If by “innovation junkies” Biglione is referring to innovation for innovation’s sake – the desire to have something new to say - then I would have to agree with him. However, there is always the risk that if you do not continually seek meaningful and differentiating innovation and launch it effectively then your brand risks being sidelined. Once again, the answer is not an either/or, it is both: you need to both seek meaningfully different innovation and grow your brand’s salience at the same time.

Can you think of any similar examples to I LOHAS? Yes, Apple, but what other ones come to mind? Please share your thoughts.

6 comments

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  1. John Cathcart, August 13, 2015
    I think that I LOHAS taps into typically Japanese motivations related to Japanese appreciation of the natural environment and simplicity. However, I think that it's possible that LOHAS taps into something completely different and that's the Japanese attitude of "it can't be helped", which basically means that life is unfair or my efforts are insignificant to make a difference. The packaging weight does something to alleviate that. Also, it's important to note that the product life cycle in Japan, particularly for beverage, is probably shorter than in any developed consumer market in the world. Perhaps the success of I LOHAS is only partially built on the communication and product. Price point is likely to be a key factor for RTD water in Japan. 
  2. shann biglione, August 08, 2015

    Dear Nigel - I think we can safely say we agree!

    "In my experience it is the marketer who gets fed up with a successful campaign well before the consumer" absolutely! Marketers vastly over estimate how much consumers pay attention to their marketing and how much they care about their brand. Great post about social media by the way (and no this is absolutely not limited to China).

    "Heck, a long time ago I used to have weekly meetings with R&D on new product development for biscuits, instant mashed potato and tea to help bring the consumer viewpoint." The categories that do that nowadays are very few in my experience, and the reality is that meaningful product differences are both easier and harder to come around. Easier because we live in an economy where entrepreneurship has become ubiquitous, harder because there are so many new things everywhere that the threshold for it to be "meaningful" seems to have gone up. This is a personal impression though, not something I have data for.

    As for single mindedness, you're right, it's just something that helps a lot in my experience since marketing teams have the tendency to go in all directions. Forcing single mindedness is a good catalyst to make sure people stick to some sort of consistence (which is why brand purpose is so popular at the moment I think - I don't buy for a second that the consumers need it, but it does help structurally - it makes for a clearer brief to all actors involved in the marketing process). 

  3. Nigel Hollis, August 07, 2015

    Dear Shann, I am always happy to debate but now I understand your definition of innovation I suspect any differences will disappear! Great post. 

    In my experience it is the marketer who gets fed up with a successful campaign well before the consumer (after all the marketer has a much higher frequency if nothing else). Sometimes that means a campaign that just needed a refresh gets dumped in favor of something new. Often that sort of change is the result of a new brand manager deciding they need to make their mark by changing something. And then there is the lure of the new that you identify: I need to use Snapchat or I will be left behind. As you imply, all too many marketers set out to use a channel without specifying the marketing task. Maybe you saw this post on the topic? http://www.millwardbrown.com/global-navigation/blogs/post/mb-blog/2015/07/22/lack-of-focus-undermines-social-media-effectiveness

    Yes, it does seem that structural issues have a huge influence on whether innovation is successful or not. A meaningful product innovation helps maximize the likely efficacy of a marketing campaign because it has obvious benefits but all too many innovations appear irrelevant to the consumer or offer marginal improvement. http://www.millwardbrown.com/global-navigation/blogs/post/mb-blog/2014/05/07/why-the-feeling-of-difference-is-so-important The marketing team ought to be able to work with the developers to ensure that any new innovation is truly meaningful to consumers. Heck, a long time ago I used to have weekly meetings with R&D on new product development for biscuits, instant mashed potato and tea to help bring the consumer viewpoint. You would think that would be more important for cars, consumer tech and durables but it rarely happens. That is why marketing often does become just "advertising."

    Finally, while I might not say "single-minded" I would agree that all brands but particularly small or new ones must develop and curate a strong, consistent brand identity that stands out from the competition. Recognition is the trigger for all pre-existing positive associations. 

  4. shann biglione, August 07, 2015

    Dear Nigel, what a pleasure to be sparking debate! My issue with innovation is not so much product innovation (proven to be important and, I would say, very often the heart of the meaningful differentiation you refer to) but what I would call comms innovation for the sake of this discussion. I say this as someone tasked with coming up with campaigns: our industry is more obsessed with identifying a new channel, new media format, and so on than it is with producing effective marketing. Many brands jump on the "innovation" bandwagon without paying attention to what makes them distinctively who they are (oh yes, they'll talk to you about what they mean, the kind of dreamy target audience they believe buy their product, but they look down on what makes them identifiable). This is what I meant in the quote you shared. I actually wrote a piece about this, you're welcome to comment and disagree with it: https://www.linkedin.com/pulse/latest-innovation-just-creative-crutch-our-mediocrity-shann-biglione?trk=mp-reader-card

    The other problem I was highlighting in my comments is that in most companies (Gordon takes the example of automotive where this is true), the kind of meaningful innovation you describe doesn't come from the marketing department but from the product one (be it engineering or else). Maybe I'm giving up too easily, or maybe I'm a realist, I'm not so sure, but I'm pretty certain that advertising teams aren't the place where this innovation usually happens. They can pass insights to guide the product teams, but ultimately someone else will come up with what they can. 

    Overall however, I would still put forward that even innovation requires a great understanding and mastery of salience if it wants to hit the mark with consumers. Take challenger brands who have smaller mental structures than larger ones. It is paramount for them to handle their salience very carefully and single mindedly. Unless they have a revolutionary product, they will need it (I'm sure Coke I LOHAS did it well, knowing Coke). Marketing departments being nowadays mainly tasked with coming up with the promotion part, I thus maintain that I wish we were collectively more dedicated to influencing salience.

    Thanks for opening an interesting discussion!

  5. Nigel, August 06, 2015

    Thanks for the comment Gordon. I did wonder whether by using the introduction of a new brand like I Lohas actually undermined my own argument. Could Evian or Volvic actually have innovated in the same way. The new bottle and positioning for sure but given its emphasis on where it comes from could Volvic have used local water sources? Given the emphasis on "volcanicity" maybe they could have done - plenty of volcanoes in Japan.

  6. Gordon Pincott, August 06, 2015

    Particularly because of enabling technologies it seems that the rate of innovation has increased substantially over the last 20 years.  And much of that innovation has been hugely disruptive to established brands and categories.  Business model innovation enabled by technology has allowed new players into many markets that once had massive barriers to entry.  Ecommerce is creating the scope for new brands to push into well established markets. In China there are new entrants in many cpg categories which are pureplay ecommerce brands.  Look at what Amazon is doing to the grocery trade in the US.  Look at the airline industry - RyanAir, Indigo, AirAsia - which have caused highly salient brands such as British Airways to go through radical transformation to stay competitive.  Look at the taxi market which is going through rapid and painful restructuring.

    But an example which springs to mind which I think highlights your point is the automotive market.  Every car company is investing huge amounts of money in R&D because not only do they have to stay ahead in an increasingly competitive market but because they know that autonomous vehicles and electric vehicles are going to be a significant part of the future.  Look at the huge benefits Toyota has got from being the first serious contender in the hybrid category.  So car companies have to make their current lineup as salient as they can, but if you told them to stop all their R&D and redeploy  the money into salience building I think you might get some strange looks.

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