Marketing and Innovation

The author and marketing guru, Rory Sutherland makes this assertion often: Marketing and Innovation are the same.

The reasoning behind this assertion is as follows: While innovation is aimed at making a product that people would want. Marketing on the other hand is about making people want a product you have already made.

This bidirectional approach, according to him, has the same result: value is created in both approaches and the money made by the companies that practice either is indistinguishable.

I have embraced this assertion by Rory. But I have also realized that making what you think people want may be easier than making people actually want it. This is where creative marketing becomes useful.

This realization is important. Companies invest a lot of money on research and development in order to come up with innovative solutions that are disruptive. While this intention is good, in the end, they create innovative solutions that have to sell at a high prices.

Convincing the customer to pay highly for such products is always an uphill task. This is especially so where the product neither has high emotional impact on the buyer nor elevates their social status.

This calls for value innovation. This is where the product also sells at a price that the customer is also willing to pay for. Resolving this value/cost trade-off is often difficult. The innovative solution may fail to be embraced for this reason.

There is an easier and more accessible option: Marketing. Positioning the product a certain way, telling the brand story in a different way, targeting a different category of customers, etc., may solve this problem.

A company can leverage the effectiveness of marketing to convince prospects to embrace their innovation without having to give up their profits.

James Watt, the steam engine inventor did this.(Also a Rory Sutherland illustration).

After he had built the steam engine, Watt realized that the most potential customers for his product were mine owners. They needed to pump water out of their mines. This was predominantly a task carried out by horses.

How would he sell this new, innovative and potentially disruptive solution without desperately giving it away at a low price until it catches on?

He packaged the power of the steam engine in terms of horsepower. He marketed his steam engine in terms of the number of horses required to carry water out of the mines.

He made what he thought people would want, and then made people want it by using a metric that they could relate with.

We use the same metric to date when referencing engine power.

This was Innovation and marketing used strategically to make a solution attractive and also to ensure it sold at a price that did not push the company out of business.