Yamuna padmanaban

PMI India National Conference - 2013

Launching Innovative Products : The Power of Marketing communications

Track : Managing Innovations

Author : Yamuna Padmanaban

Launching Innovative Products: The Power of Marketing Communications

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Abstract

When innovative products fail – Is Marketing to be blamed?

In today’s fast paced, social-media centric world, enterprises need more than a good product plan

to make their innovations matter to customers. The role of marketing in this ever changing, “flat

world” market place calls for innovative, distributed, agile and responsiveness oriented strategies.

The objective of this paper is to present the importance of marketing in successfully launching an

innovative product and to bring out the innovative spirit of a company leveraging the company’s

existing brand value. For example, companies who want to be rated higher in their “innovativeness”

quotient, need to be backed by strong, high frequency, disruptive marketing messages compared to

traditional marketing strategies.

The paper then presents a few scenarios on how marketing can magnify or diminish the market for

an innovative product in an organization using real world case studies.

Since marketing is only as effective as the marketers, we will then discuss the required ‘Thought

level of marketers’ to build an effective marketing plan for internal and external audiences. Today’s

marketers need to have a repertoire of skills like being a product specialist, possess Social Media

Engineering skills and have a good foundation in Business Analytics to be able to decipher the

multitude of signals emanating from customers.

The author leveraging her experience working as a Marketing Program manager for Enterprise

product launches will finally share some of the common pitfalls that companies should avoid while

developing their marketing plan for an innovative product.


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Table of Contents

Introduction .................................................................................................................................................................... 3 Innovation in Enterprises.......................................................................................................................................... 3

The role and need for Marketing Communications in Enterprise Innovation .................................. 4

- Marketing communications Vs. the Customer adoption curve ........................................ 5

- Case Studies............................................................................................................................................. 6

Marketing Communications for Innovative Products

Top 5 Winning Attributes ......................................................................................................................................... 7

The most important Pitfalls to avoid ................................................................................................................... 10

Research Findings ....................................................................................................................................................... 11

Conclusion ..................................................................................................................................................................... 13

Bibiliography.................................................................................................................................................................... 13

Appendix 1 .........................................................................................................................................................................14


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Introduction

The need for Innovation has never been as intense as it is today. Far from being a business

buzz word, it has become a survival need for long term businesses to stay afloat in the

competitive landscape. Innovation has become one of the top priorities for most

organizations who have a long term strategy. Innovative products help organizations stand

out from competition, compete on price, reduce costs and improve productivity.

While discoveries can happen by chance, innovations in enterprises best work with a

formal process in place right from defining their innovation strategy, developing the new

product and then actually taking it to the market. Different teams in an organization come

together to work on this process for defining the business strategy, idea generation,

product development, manufacturing, marketing and business development.

In this paper, we will focus on the role of marketing communications in launching an

innovative product and how marketing can either catalyze the success of the innovative

product by adopting powerful strategies or lead to poor performance of the product owing

to multiple reasons like an unclear messaging, delayed entry into the market or misplaced

product positioning. From the author’s own experience working on enterprise global

launches and a research survey conducted amongst global marketing managers working on

product launches, the author has listed the top five elements a marketer should put utmost

focus on while working on launching an innovative product and the most important pitfalls

which are to be avoided.

Innovation in Enterprises

Before embarking on understanding how marketing plays a pivotal role in showcasing the

innovativeness of a product or technology, let’s look at how innovations evolve and grow

within organizations.

Innovation in most enterprises starts as a microcosm representing a specific problem or a

breakthrough among a handful of people. A successful adoption of this localized

problem/insight to address a wider segment as an innovative product requires a wider


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team effort across the organization including management teams, product development,

marketing and sales teams. The success of an innovative product in enterprises depends on

the understanding of customer need, Product offering, Design, Support and the Go to

Market Strategy.

The role and need for Marketing Communications in Enterprise

Innovation

According to the renowned management consultant, educator, and author, Peter Drucker

“….the purpose of business is to create a customer, the business enterprise has two--and only

two--basic functions: marketing and innovation. Marketing and innovation produce results;

all the rest are costs. Marketing is the distinguishing, unique function of business."

Marketing Communication encompasses the message to be communicated to the market

and all the media used for the communication. Even great innovations can fail drastically if

not communicated well. An innovative product itself is a new idea or a new entry into the

market and has a pressing need to be communicated clearly about. The messaging and

communication has to be clear for customers to understand the new idea and concept

which otherwise leads to failure and early exit of the product. Even a simple product

innovation needs effective marketing to be adopted. Successful innovative products most

often have a strong messaging and on the other hand we observe that even good innovative

products have more often failed with a weak messaging

“Reports1 say that 66% of new products fail within two years, and a startling 96% of all

innovations fail to return their cost of capital2.”

While this is due to a number of factors, including economic conditions, an explosion of

consumer touch points, shifts in decision-making behavior, and that the deluge of

information marketers have to sift through to ensure they are up to speed with the latest

trends, some of these challenges like a poor marketing communication campaign or poor

messaging can be overcome to a greater extent by focusing on the most important

marketing elements and avoiding some common mistakes while communicating with the

market.

1Booz & Company reports 2 Doblin Group reports


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a) Marketing communications Vs. the Customer adoption curve

The development of an innovative product goes through different phases within an

organization before even the customer seeing it. Similar to that the adoption of the product

by customers too has its tail-curve. This customer’s journey through an innovation cycle

should be well understood by enterprises as they embark on their innovation journey.

According to Rogers, “this process named diffusion is the process by which an innovation is

communicated through certain channels over time among the members of a social system.

The innovation must be widely adopted in order to self-sustain. Within the rate of

adoption, there is a point at which an innovation reaches critical mass.”

The categories of adopters are classified as innovators, early adopters, early majority, late

majority, and laggards. This diffusion is characterized by the image below which lays down

the categories of adopters and where they fit into the diffusion life-cycle.

Image : Innovation – Diffusion Life Cycle

The diffusion curve also depicts the “Chasm”, the divide between the Early Adoptors and

the “Early Majority” that generally epitomizes a product transitioning from a “Technology

front-end” to a “Solution front-end” and is manifested by a rapid adoption and popularity.

The Chasm has claimed many a bodies as we will see later in the paper and hence is a

critical milestone that any marketing strategy needs to address very early in the adoption

cycle.

http://en.wikipedia.org/wiki/Innovation

http://en.wikipedia.org/wiki/Critical_mass_(sociodynamics)

http://en.wikipedia.org/wiki/Early_adopters


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Case Study – Understanding the impact of Marketing communications on

the success or failure of innovative products

To further understand the real-world implications of marketing on innovative products, let

us look at a few scenarios where marketing has had a greater impact on the success or

failure of innovative products.

This case study was derived from the author’s experience as a global Marketing Program

Manager and handling innovative technology product launches. An innovative enterprise

product with built-in intelligence was to be launched across the globe to bring together the

best of product, software and support experience for its customers. The primary objective

was (a) to increase customer satisfaction levels with a ‘simple to use’ interface across the

product’s lifecycle (b) increase thought leadership and competitive advantage in the

market.

The challenges involved in this project were multifold. Since the innovative product

encompassed both new product, software and support features, there were different

business units and multiple teams were involved in the project including Engineering

teams, Product teams, Services team, Marketing teams, Program Management, Delivery and

Sales. As with an innovative new product, there was a risk of potential failure to

understand the receptivity of the customer segment to adapt to an innovative product.

Since there were different business units coming together (hardware, software and

support) there was a critical need to ensure collaboration and consensus building amongst

the teams to achieve project milestones on time and for quicker decision making when

required. A well-defined project plan had to be created and tracked to ensure adherence to

critical milestones and avoid any delay in the ‘Time to Market’

With adequate planning and implementation of key processes, the launch was rolled out on

time and generated good customer response with a wide coverage in terms of articles,

blogs, analyst brief, tweets and YouTube visits. The customer feedback collected showed

positive user experience and the adoption rate has been positively increasing.

Here are some of the important factors related to the marketing launch planning which

helped this innovative product succeed in the market:

To ensure collaboration across the different teams a central core launch team was formed

by the Marketing Launch Manager. For consensus building across the teams an effective

process was put in place with defined roles and responsibilities and an escalation matrix

was in place for situations where quick decision making was mandatory. This avoided time

delays which are most common due to lengthy decision making processes in larger teams.

Multi – faceted research was conducted to understand the customer, market and the


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receptivity before drafting the communications plan and the messaging. In addition to

understanding the customer challenges, focus group meetings were conducted across the

globe to understand the receptiveness of customers to adapt to the innovative technology.

The focus groups also helped in narrowing down the messaging. Additionally, feedback

was sought from industry analysts which helped in crafting a powerful messaging for the

market. The launch plan included critical milestones to ensure timely completion of

planned tasks. Internal and external communications were well planned and executed on

time to ensure there was no ambiguity of the market messaging within internal and

external teams.

As stated earlier, for every successful product launch, 3 more products fail to meet

the market expectation. While there could be multitude of reasons for products to fail, one

of the key factors that influence the success/failure of innovative products is their ability to

transition from an "All for One" to a "One for All" status. There are many technologies that

have fallen into the chasm, despite the fact that they work well, because of the high degree

of discontinuity –i.e.: they require the early majority to make significant changes to their

current infrastructure. This is a significant point where marketing communications can

play a stronger role to move customers from the ‘Early Adopter’ stage to the next level of

‘Early Majority’. High volume sales have been denied for many good products, despite the

high uptake in the early adopter stage. Some of the classic well known examples here are

Microsoft’s Zune and The Segway. Microsoft's Zune (an audio device for listening to music,

similar to the Apple i-pod) where the product had to be retired prematurely and one of the

reasons was that it lacked required marketing support to succeed. The Segway (a two

wheeled self-balancing personal transport) is another example where poor market knowledge

was one of the primary reasons for failure of the product.


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Marketing Communications for Innovative Products: Top 5 Winning

Attributes and Most Common Pitfalls

Leveraging the author’s experience working on various launches for innovative products

and the inferences derived from a focused short survey amongst global marketing

managers, the top five important winning attributes and the most common pitfalls to be

avoided are listed here.

Top 5 winning attributes

Let’s look at some of the top 5 key winning attributes a marketer should have for

successfully launching an innovative product.

1. Need for repertoire of skills – Be ready to learn more than just marketing:

Honing just one’s marketing skills aren’t enough to talk about an innovative product to the

customers in today’s flat social world. To create a ‘bang-on’ messaging which will bring out

the innovativeness in the product, differentiation and the enterprise’s innovative spirit, a

marketer has to understand the product, the market and the organization objectives. The

marketer needs to understand the technology behind the product from the engineer’s view

and then successfully package it for the customer’s need. It is also important to understand

the management strategy to align the marketing messaging to bring out the innovative

spirit of the organization. Competition analysis and market analysis are some of the other

vital inputs required today to time and position the innovative product successfully.

2. Understand the customer segment – Market Maturity and Technology

Adoption Curve:

Within the Adoption Curve, the customer goes through a five step decision making process

in each of the above stages:

Knowledge >>Persuasion >> Decision ( Accept / Reject) >> Implementation >>

Confirmation

Hence, this Technology adoption lifecycle can be called the core around which the

marketing communications have to be built to ensure effective reach and adoption of an

innovative product by the customer.

Table : Different categories of adopters and their communication needs

Adopter Category

Definition Factor to be considered for Marketing Messaging (Examples)

Innovators:

First set of individuals who are willing to take risks, youngest in age, have financial liquidity and risk

This segment can be contacted via social channels and has frequent access to press releases, scientific


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tolerance

sources and other innovators.

Early adapters

Second category of people who adopt, are typically young, have high degree of opinion leadership, high social status, advanced education. A very important segment as they are followed by the mass market adopters

Messaging needs to have the ‘wow’ factor that will excite them, e.g innovative cutting edge features. Needs short messages as they have short attention span

Early Majority

Third category and slower in the adoption process, have above average social status, contact with early adopters, seldom hold positions of opinion leadership

Role of marketing is very important and high. Customers here rely on Values and recommendations than innovation. Wider coverage required to reach this mass market.

Late Majority

This category approaches innovation with a high degree of skepticism after the majority of society has adopted innovation, have below average social status, very little financial lucidity, in contact with others in late majority and early majority, very little opinion leadership

Skeptical customers who may need case studies and customer proof points to get convinced

Laggards Last category and the last to adopt an innovation, little to no opinion leadership, have an aversion to change-agents and tend to be advanced in age

Dislike change and may adopt only when traditional products are not available. May need longer waves of communication and persuasion

Studying the adoption curve and the diffusion stages of a new product within and among

customers, we clearly realize that the marketing messaging and communications should be

specifically targeted at different groups and a “one-size fits all” approach would spell death-

knell for the product.

Companies that strive to bring out innovative products often need to cross the chasm as

fast as they can and marketers need to change their sales pitch when crossing the chasm

between the visionaries and the pragmatists. This requires a very carefully coordinated

marketing strategy that leverages the technical and innovative prowess of the product to

build up sufficient credibility and messaging that allows the mainstream market to feel

sufficiently confident to adopt it.


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3. Create Powerful, Clear and Credible Messaging :

In the 1960s, Theodore Levitt said, “people don’t want a quarter-inch drill, they

want a quarter-inch hole.” His point was profound: people buy products and

services to accomplish a task or achieve a goal.

The message should be clear, simple and should bring out the uniqueness of the product

aligning with the customer need. To be adopted by mass markets, even the simplest

innovation needs clear messaging. The core messaging should focus on the customer need

that the new innovative product will satisfy than the product itself . Ask yourself “ Why

does the customer need it ? and “Why should he buy your product? . Also the messaging

should be appropriately differentiated for the different segments of audience. E.g

Customers, Channel Partners etc. taking about their significant benefits.

Building personas can help develop an effective marketing strategy and messaging

for an new product. Personas are of great value in helping you understand your customer

characteristics and their purchasing decisions.

Customer quotes can be powerful references for building credibility. Experiences

shared by customers who would have been a part of the ‘innovators’ segment and would

have been amongst the first lot to adapt the product can be really helpful to gain foot hold

in the market place.

4. Keep your launch wheel moving :

The Marketing launch plan should encompass flexibility to adapt to changes in the market

well after the launch. This is primarily to continue the communications and reaching out to

customers as they progress in their decision making process. Having on going

communications adapting to changes in the market help enterprises gain market share

progressively while on the other hand if marketing is discontinued after the product launch

it will either stagnate the product or cause decline of market share. It is essential to build a

pipeline of marketing materials and adopt the core message for various delivery channels.

5. ‘Time to market’ is everything:

Time to market is the time taken by a product from the time of conception to the time when

it is available in the market. This is a crucial factor for innovative products as the very spirit

of the new product is that it is ‘innovative’ and ‘new’. A delay in getting to the market has

critical challenges in terms of competition entry and reduction in the total addressable

market. The predictions made at the time of conception and planning may not hold good

and could negatively impact the expected response and revenue from the market.


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It is imperative that the project plan has well-defined milestones to ensure that the project

adheres to the planned timelines and any risks in terms of time delays should be detailed at

the beginning of the project

Marketing Communications for Innovative Products: The list of the most

important Pitfalls to be avoided

The most common and important pitfalls which may lead to launch failure and are to be

avoided by a marketer while working on launching an innovative product are :

1. Failure to understand the market: The importance of understanding the market

and customer needs cannot be over emphasized than for an innovative product. The

messaging and the vehicles of communication will heavily depend on the maturity of

the market . For example, a mature market is more receptive to technology and

innovations.

2. Do not sell the technology, sell the solution: Be cautious not to put your focus on

the product features rather than the customer need it is fulfilling. Very often the

technology and features of the product overshadow the actual messaging. The

message should portray how the product can actually benefit the customer and

which problem of the customer is it solving.

3. Incremental and not Incredible messaging: Innovative products by nature are

breakthrough technologies and need a “touch and feel” messaging to be able to

connect to the market. Also, excessively relying on traditional messaging is bound to

diminish and undermine the innovativeness of the product. Overload of information

when the market is still not ready to handle it may spell failure.

4. Delayed project timelines: Time To Market is critical for an innovative product to

gain market leadership and gain market share. Have a well-defined project plan and

it should be tracked continuously to avoid delays and potential risks

5. Lack of Collaboration: Very often many of the challenges related to a launch can be

overcome with effective collaboration between the different teams involved in the

project. Lack of collaboration between the product teams, marketing and sales

teams is specifically important which otherwise may lead to conflicts, time delays

and poor messaging

6. Make sure that one voice is heard (multiple voices): To hear different messages

from within the organization and from the market would dilute the intensity of the


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overall message. So adequate planning and processes should be in place to ensure

that one voice is heard from the organization e.g. internal trainings and

announcements are made right on time and are clear to for all teams to be in synch

with the core marketing messaging.

Research Findings:

A survey questionnaire (Refer Appendix 1) was shared online to 30 global marketing

managers who work on similar product launches to understand the importance of the

above attributes. Most of the survey respondents corroborated the author’s listing of the

winning attributes and pitfalls to reinforce that these cannot be avoided. The survey was

also helpful in ranking the priority of these suggested attributes.

Graph 1: Marketing Communications for an Innovative Product Launch - Ranking of the

Top 5 Winning attributes

Inference: Almost all the top 5 elements were ranked very important. Understanding the

customer ranked on the top followed by the need for clear messaging and the ability to

learn new skills

Graph 2: Marketing Communications for an Innovative Product Launch - Ranking of the

most important pitfalls to avoid

Respondents


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Inference : According to the respondents, delaying the ‘Time to Market ‘ and the failure to

understand the market were s the most common pitfalls which had to be carefully avoided follwed

by lack of collaboration amongst different teams.

Conclusion:

The suggested winning attributes and pitfalls have been derived from personal

experiences, the survey, interviews with leaders in marketing and real time case studies.

Since enterprises invest considerable amount of effort, time and resources in developing

innovative products, and innovative products by themselves have risks of potential failure,

the suggestions in this paper can be used as a guidance by marketers to draft their launch

plan. It will be possible to overcome some of the most common challenges in launching an

innovative product with the use of the discussed key elements.

Bibliography:

Drucker, Peter F., "The Practice of Management", 1954.

Booz, Allen & Hamilton., “New product management for the 1980s”, 1982

Rogers, Everett ., “Diffusion of Innovations”, 2003.

From Innovation to Marketing: Understanding Technology Cycles: Ben Bajarin Feb19, 2013

HBR article on why most product launches fail : Joan Schneider and Julie Hall , April 2011

Respondents

http://techland.time.com/author/benbajarin/

http://hbr.org/search/Joan%20Schneider/0/author

http://hbr.org/search/Julie%20Hall/0/author


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Appendix 1

Impact of marketing communications for an innovative product Launch – Survey Questionnaire:

1). What is your current role? * (Choose the option which fits best) Marketing

Sales

Business Development

Others

2). As a marketer what do you think are the top five elements imperative for successfully launching an innovative product? Please rank the below in the order of priority. * 1 being 'Least important' and 5 being 'Most important'. Kindly assign different and unique rank (1 to 5) to each element below.

- Preparing yourself with the necessary skills (includes learning new technology, any

skills outside marketing which may help create effective messaging for the new

product)

- Understanding the customer segment, Market Maturity and innovation adoption curve

- Creating Powerful, Clear and Credible Marketing Messaging

- Keeping your launch communications plan running & flexible (to help customers move

through the adoption curve & adapt to changes in the market)

- Ensuring that the product achieves its planned ‘Time to market’ (to avoid entry of

competition and reach the TAM as planned)

Please specify any other element/s not covered above.

3). Leveraging your experience working on innovative product launches, what are the most important pitfalls to be avoided? Please rank the below in order of priority? * 1 being 'Least important' and 6 being 'Most important'. Kindly assign different and unique rank (1 to 6) to each element below.

- Failure to understand the market

- More focus on the technology than the customer solution which the product addresses

- Messaging has to be Incremental and not just Incredible (information overload)

- Failure to accomplish project timelines – delayed Time to market

- Lack of collaboration between product teams, marketing and sales

- Multiple messaging (different teams, PR and Partners have different versions of the

messaging causing ambiguity )

Please list any other pitfall/s that you consider important and not covered above

4). Additional comments