The Constant Observer

Yesterday we dealt with the idea of a Value Proposition and went deeper into the idea of ‘generic benefits’ that consumers experience (something that was floated in Part 1).

Today I am going to try and give you a closer look at Innovation and whether it should be branded. I will possibly try and outline where innovations tend to be over branded and how branding a technological innovation may ultimately lead to leadership.

I noticed something peculiar with Google Gears – it is probably one of the few Google Brands that does not have a completely generic brand name. You have GMail, GTalk, Google Reader, etc. True there are benefits of generic names and Google is probably not that great an example because its core brand has immense equity. But I think Gears is an attempt by Google to brand innovation.

Consider the iPod, iTunes, The Kindle by Amazon. All of them were technological innovations in their own right. Consider how they would have sounded if they were called Apple MP3 Player, Apple Music Software, and Amazon Electric Book Reader. Branding an innovation is central to the longevity of an innovation.

I also think that Branding an innovation is part of the ‘Generic Benefit’ that can be offered to the consumer in terms of the way he or she ‘feels’ and the way others look at and perceive him or her.

There are however, dangers of over branding – putting brands on innovations that do not warrant them in the 1^st place. What ultimately happens then is that the brands are created but later not supported.

Branding too can thus create a Shakespearean dilemma and make Brand Managers and CEO’s modern day Hamlets.

Branding an innovation or rather over branding an innovation can happen when there is a marketing or technical person who has brought up his or her baby through all kinds of meetings, budget reviews and then ultimately wants the innovation to have a name so that customers can identify with the innovation the way he or she does. So more often than not, brands are provided to innovations and the result if a large variety of brands, with a lot of underfunding, confusion, and lack of prioritization.

So ultimately the goal of branding an innovation should not be an excuse to slap a name on anything and everything.

I should probably provide an example from Foxy here. We have Foxy - The Services Brand, BeFoxy, BeFoxy TV, and A Network. Now BeFoxy is going to be our latest brand and it deserves to be branded solely because it is a property that is not easily available at other similar websites.

To have different brands there has to be differentiation in terms of processes, mind power, possibly even the work space.

While there may be a tendency to over brand innovations, there are also dangers in not branding and not identifying innovations, working on a family of brands and working on their tactical and strategic roles.

While branding an innovation, the 3 key questions that need to be asked are:

1) Is it a significant advance?

2) Do customers care?

3) Will it merit investment over time by bringing in sales and profit, market leadership, and other me too products?

Next post:

I will try and dwell deeper into these 3 questions that Brand managers and marketers need to ask.

If you have any similar examples of branded innovations that did work or branded innovations that were not branded, please do share them – I’d love to have the opportunity to learn and fine-tune my thoughts!

In the previous article in this series, I wrote about innovation, generic benefits, and the nature of technology with respect to innovation.

Today I am going to try and stretch that concept a little bit more by bringing in another added dimension – that of the Value Proposition.

A Value Proposition is based on the “fundamental equation of business”

 i.e. Value = Benefits – Price.

In a sense a value proposition summarizes why a consumer should buy a product. So the “value proposition” becomes extremely important especially where the commercialization of new products is involved. This is because there is a risk involved with trying them (not all products are manufactured by Toyota or Sony or Reliance etc. and thus they do not have marketing economies of scale and an assured quality level with respect to the customers mind).

Since the Value Proposition is a summary of why a consumer should buy a product, it has an internal feature that can help the business as well. It thus becomes an automatic revealer of Segmenting, Targeting, and Positioning for a company. So in a sense it is a clear precise statement of the customer targets for the product as well as a specification of the key benefits that will ultimately define whether the consumer will buy a product or not.

Consider the Value Proposition of a company I have written about many times over – Mobile Worx. It offers free VAS for mobiles over the Internet by showing people who want to download content – some advertisements. Now the consumer depending on who he is will view the benefits and the price he must pay. Remember, the services of Mobile Worx are not free because there is a time cost and a “mind cost” involved and also “there is not such thing as a free lunch” as economists would say! So looking at the cost benefit one can clearly outline the prospective user of Mobile Worx’s so called free value added services (VAS) – the user obviously will not be a top notch executive or CEO who does not have any spare time on his hands – that kind of a person will pay a price for the value added services he/ she wants to consume. The user probably will be a middle or a lower mid level employee who uses public transport or a cab, maybe even a chauffer driven car in some cases – and someone who has free time on his/ her hands. Whose per minute value is not as high as he/ she might like it to be. So obviously that kind of a person would find some sort of a ‘Value’ in the proposition that Mobile Worx looks to offer – and im sure they know that as well!

Another thing that firms must keep in mind with respect to Value Proposition is that they must learn to distinguish between “features” and “benefits”. I spoke at length about this in the 1^st post on this series as well.

The application of “features” and “benefits” with respect to Value Proposition is that features are something that the firm produces, benefits are something that consumers buy!   

So the end result (for a consumer) of doing business with a firm is that a benefit obtained.

Many firms make features and sell features. The consumers look for benefits – and there is no middle ground and thus fewer purchases. Thus firms must look to integrate features and benefits and maximize marketing potential especially for new technologies. The relationship between features and benefits is key.

Consider Google Docs. Agreed it is a Google product and hence MUST be good but look at how they have integrated features and benefits. They have enough features that will benefit the average user such as font tools, size tools, basic spreadsheet and graph tools. They have at the same time ensured that there is no feature overload – which would lead to the service being slow (and pointless) because then the opportunity cost of buying a pirated version of MS Office becomes lower. So there are no fancy features for high end users and thus Google is quite clearly targeting the average user as of now.

Again I want to take the opportunity to remind you that it would be great if we can make this series conversation like – do keep asking me questions and challenge what I write so that the series can be more engaging and mutually beneficial.    

Till then Enjoy The Constant Observer!

Let’s first take a look at the approach taken by firms towards innovation.

Too many firms today believe that there is a trade off between the “engineering” approach to innovation or the market driving approach to innovation and the pure market driven approach to innovation.

The engineering or market driving approach basically assumes that consumers do not really know anything and as a result of that, engineers must go on “innovating” without really bothering to ask them anything.

The pure market driven approach to innovation looks at innovation from a level of customer feedback to new ideas – this often results in “me too” – not truly innovative products.

What ‘innovators’ and marketers fail to do often is identify generic benefits to consumers. By identifying generic benefits a firm virtually lets the consumer guide the product developer and marketer through the innovation process. For example – the generic benefit that consumers may look for with respect to social networking is that they can be an enhanced version of what they really are – a social network allows them to be cool and fun – and this will guide the innovator on a social network to have adequate applications that make the user seem more ‘cool and fun’. So you will have a ‘FunWall’ or an application that tells the user which celebrity he or she looks like (and inflates his/ her ego) – or you may even have a ‘if I was a drink I would be’ (and no matter what drink you are you are bound to sound cool!). I have picked up these examples from FaceBook and again I think this is where they have got it right – the correct innovations that identify generic benefits.

Btw: NEWSFEED – All Social Network Watchers – Facebook just overtook MySpace in terms of visitors to the site according to alexa.com

Innovation it must be considered is understood as something new or novel. While that may apply to technologies and the functionality of features – it does not really apply to the generic benefits – they virtually stay the same.

So this shows that customers may “know what they want” without really “knowing it” – great isn’t it!?

So when a customer is choosing a new technology, fundamentally he is buying a benefit.

Thus a technological strategy should begin with the fundamental need of customers and work with a problem solving approach, an approach that satisfies a need and improvises a benefit. Such an approach is balanced in a sense and it thus diminishes that perceived trade off between being market driven or engineering driven.

I hope to make this series an especially insightful, long and interactive one. Over the course of the series I will be outling certain generic benefits, certain things innovators need to keep in mind while designing new products, and also various feature trends that are the real winners because they combine generic benefits. I will also try and make the scope broader if I have the capacity.

It would be great if we can make this series conversation like – do keep asking me questions and challenge what I write so that the series can be more engaging and mutually beneficial.