Today sees the first part of an article taken from our company website entitled “Nursing the Chairman’s Babyâ€? this discusses aspects of working within a company where the Chairman has the most power when it comes to innovation. Part two will be published on 5th September.
How far can market research help to evaluate the potential of industrial innovation? Here we look at the strengths and weaknesses of its possible contribution: specially for marketers under threat of innovation-by-imposition.
Company chairmen are particularly prone to becoming obsessed by a “good idea.” One of their roles in life is ensuring the forward direction of the company they control, and so it is reasonable they should seek new ventures. The problem arises because, through the nature of their work, they cannot involve themselves in detail. Thus, if a good idea seems generally to offer potential, it may be taken on with no more justification than gut feel.
It is the hapless marketing director and his staff who are then landed with the task of marketing the new product or service. The company is stuck with the project and the marketing department becomes involved in showing how the product will be sold rather than determining whether or not there is a market for it.
Obviously the more professionally run the company the greater the probability that the marketing department will be called in to assess the new product’s market potential before it becomes a fait accompli. This article is written more for the less happily placed: marketing men working against the corporate grain, in a predominantly non-marketing environment – who may find a statement of what market research can and cannot do in the marketing of innovative products useful material for the nursing – or smothering – of the chairman’s baby. We confine ourselves here to the problems of assessing the potential for innovations rather than the researching of products or services which, although new to a company, have an already established demand.
Innovations can be classified into those which are a modification of an old design and those which are conceptually brand new. A franking machine with automatic this and that illustrates the first type of innovation. A laser franking dot imprinted on an envelope by a computer exemplifies the second.
Assessing the demand for product improvements is much easier than measuring the potential for a new concept, for fairly obvious reasons. The user of a modified product can relate easily to the benefits and how these have now changed as a result of the innovation. If the product is revolutionary, the potential user of the product must be able to recognise a latent demand, otherwise a negative reaction will be given. Consider, for example, a company making steel components from bar. The process is simple, flexible and can be automated. The invention of powder metallurgy in the 1940s meant that the buyers of orthodox machined parts from bar had to reorientate themselves to a process which gave them a component which looked the same but, because it had been manufactured by a different route, had a performance which was not entirely comparable.
A marketer assessing the potential for powder metallurgy 30 years ago would have had to consider the areas where simple substitution could take place and also the new opportunities which the process offers to designers starting with a clean slate.
Make sure that you don’t miss the second part of this article which we will publish next Tuesday (5th September)
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on Thursday, August 31st, 2006 at 9:00 am and is filed under Articles, Market Assesment, Market Research, New Product Development, White Papers.
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