WHAT INNOVATION MEANS TO MARKETING

WHAT INNOVATION MEANS TO MARKETING 

 

One of the common criticisms of marketing is that marketers spend too much time trying to foist new products on a public that may not really need another widget. Marketers will reply that they are only trying to satisfy needs, a central tenet of marketing. Yet if marketing is soundly-based on research, why do so many new products fail?

The answer lies in the complexity of the human species and the fact that sometimes we don't know what will satisfy, please or entertain us until we see it. Indeed, novelty in a product or in an advertisement can be the source of appeal as much as changing wants and needs.

That's why innovation measures are a key part of the AMI's Australian Marketing Metrics project. At both an organisational and an individual level, innovation metrics will address factors such as active support for innovation, the encouragement of an appetite for learning and "freedom to fail".

A good marketer will closely monitor consumer behaviour, but will also think laterally from time to time, to bring an idea out of left field. Good marketing and innovation go hand in hand.

Roger James FAMI CPM, national president,
Australian Marketing Institute

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WHAT INNOVATION MEANS TO ONLINE SERVICES

WHAT INNOVATION MEANS TO ONLINE SERVICES 

 

If the internet is now self evidently about information, it is indelibly underlined when it comes to the distribution of travel. It has in fact become so powerful that some airlines and, of course, traditional travel agencies view it as a threat to their survival.

Webjet has in Australia, through its Travel Service Aggregator (TSA), introduced a level of innovation which has empowered consumers to such an extent that they often know more about prices and schedules than traditional travel consultants and now have at their fingertips a level of comparative information which some airlines would prefer remain inaccessible and hidden. For the first time, consumers are able to look behind the mystery of air fares and promotional offers free of travel agency and airline bias and effectively mix and match combinations of fares that suit their requirements and not the airlines' requirements.

As airlines continue to reduce distribution costs through the winding back and, in some cases, elimination of traditional travel agency commissions, Webjet's cost base driven by major investment in technology provides an ongoing competitive advantage of at least two-to-one and perhaps three-toone when contrasted with major retail distribution groups.

On a global basis, the growth in travel internet bookings is several times the underlying growth rate in the travel industry itself; it has become a tidal wave of unprecedented proportions, and Webjet's experience in Australia with a growth rate of 280% in the past year, and with an annualised total transaction value of A$150 million a year, indicates that this explosion is being replicated in the Australian Pacific market.

David Clarke, managing director,
Webjet

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WHAT INNOVATION MEANS TO STATISTICS

WHAT INNOVATION MEANS TO STATISTICS 

 

At the Australian Bureau of Statistics, we created a three year plan under the banner of the "Business Statistics Innovation Program". It was a major change program. We had a number of goals but foremost were productivity improvements through the use of new technology, reskilling staff and redesigning our business processes. All three are important and interconnected.

We set a goal to reduce staffing levels by approximately 150, and at the end of the process achieved reductions of 170, over 15% of total staff. We were able to do this with the support of the majority of staff. The unions even complimented us on the way we managed the change program.

Why was it successful? First, we enabled affected employees to comment at the contemplative stage. A number of strategic scenarios were developed for discussion. Many important adjustments were made as a result of the feedback. As a consequence, employee ownership of the proposals was much greater.

Second, middle managers play a pivotal role in the success or otherwise of change programs. We encouraged extensive dialogue with managers using an external facilitator, which helped get the key issues on the table and real commitment from the managers.

Third, an project management arrangement was set up with a project office in support. Everyone knew their role. The BSIP Board held regular meetings to monitor goal achievements and risks to successful completion.

The programme's success is due largely to the initial effort in creating an appropriate three year plan based on consultation with all those with an interest. It proved a very worthwhile investment.

Dennis Trewin, Australian statistician,
Australian Bureau of Statistics

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WHAT INNOVATION MEANS TO TEACHING INNOVATION

WHAT INNOVATION MEANS TO TEACHING INNOVATION 

 

Too often the concept of "innovation" is used in government statements, by research academics and some industry spokesman to represent novelty, new research, new opportunities, and potential business ventures. Such communication does not describe innovation. If we are to develop a truly "innovation economy", it is essential that the true concept is both understood and practised at all levels of society. From the research of Peter Drucker and the Australian Graduate School of Entrepreneurship we define "innovation" firstly, as a process. It is this process that endows the recognised opportunity to create change with the capacity to add value to an already existing invention, product, process or service, and then, and most importantly, at a price the customer will pay.

Researchers and engineers can focus on design as though the design is the product. Actually, it is design plus marketing that creates the product. But to launch this product as a profitable addition to the bottom line requires the application of a first-class business concept innovation. It is the successful conversion from opportunity to business concept that characterises true innovation. Commitment to seeking radical innovation within a business context provides the most cost-effective way of developing a high-growth sales strategy.

Prof Emeritus L Murray Gillin AM, academic leader,
Australian Graduate School of Entrepreneurship, Swinburne University of Technology

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WHAT INNOVATION MEANS TO VENTURE CAPITAL

WHAT INNOVATION MEANS TO VENTURE CAPITAL 

 

After 20 years in the venture capital industry I can confidently confirm what King Solomon writes in the Book of Ecclesiastes: "There is nothing new under the sun."

Certainly this statement is true in respect of human conduct. Sometimes I think it is true in relation to technology and I certainly think it is true to say that overall inventors fail to understand the world in which we live where simply to have a better product does not guarantee market success.

It is also very sobering to realise that many technologies, while representing a significant improvement over their predecessors, have nevertheless taken a generation to gain broad market acceptance. It is hard to appreciate that sometimes the product diffusion cycle can be 30 years.

In addition, in some industries such as medical innovation, there are very substantial legislative barriers to entry, apart from the usual market considerations. In short, it requires an appreciation of the realities of our world and the substantial imperfections that exist within the various markets that create obstacles beyond the appreciation of an inventor who can usually only see the technical merit in an innovation.

The skill of a venture capitalist is in understanding the technical excellence of any proposal while at the same time being able to both discern market obstacles and potentially also to provide solutions. Thus a competent venture capitalist provides far more than money as they can be the essential ingredient in the commercialisation of an innovation.

Vanda Gould, chairman,
CVC Ltd

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