All posts from: November 2011
“Britain rock bottom of world innovation league” was the headline from the business pages of The Independent this week, covering the Thomson Reuters Top 100 Global Innovators survey. Not an entirely helpful story at a time when the economy is creaking and we’re all doing our level best to keep creating wealth and jobs.
So I’m here to take issue with the findings. The survey has been put together based on patents: volume, global reach, how frequently a company has a patent granted and the so-called influence of those patents.
But patents shouldn’t be the only barometer of innovation in our society. Innovation is endemic in many UK companies, from the smallest to the largest. Simply registering hundreds of patents does not make a company successful; they have to be insightful and relevant patents – and a few good ones will always be more useful than a truck load of bad ones.
Few would argue that Google is one of the world’s great innovative companies; perhaps even a model for a 21st century brand. But Google is the perfect example of how innovation doesn’t always lead to success. Just think of Google Buzz, Google Page Creator, Google Audio Ads and Google Wave, to name but a few ideas that have failed to make a dent. The jury is still out on Google Plus.
Here in the UK, there are plenty of small and medium-sized business innovating within their own sectors, but at a time when multi-nationals dominate western economies and are making in-roads into developing markets too, it can be difficult for these smaller brands to bring their innovations to market. Some older, bigger brands meanwhile are ‘renovating’ to keep alive what they already have; this may mean replicating the innovations of smaller companies but with added reach and budget. True innovation is always going to be more ground-breaking than renovation but it doesn’t mean it will be more successful.
And innovation isn’t necessarily about making new things – innovation is a state of mind, a culture. In this sense, I think many of our businesses are ahead of the curve.
I read some interesting, if slightly perplexing, research today, which led with the fact that around 80% of brands are not regarded as beneficial to factors like health, happiness, financial security and environmental protection.
The research on Meaningful Brands, by Havas Media, was conducted among 50,000 people in 14 countries, including Brazil, China, France, Germany, India, Japan, the UK and US.
Some of the findings may have been superficially interesting but, when given thought, actually posed more questions than answers.
For example, the research was reported as saying that:
- Most consumers “would not care” if 70% of brands were to “disappear”, while only 20% of brands were seen as having a positive impact on shoppers’ sense of wellbeing.
- 30% of respondents in Latin America felt brands exerted a favourable role in their lives, totals falling to 8% in Europe and 5% in the US.
- 65% of people had a “very strong attachment” to Coca-Cola, but only 35% thought it improved their quality of life.
But what does any of this actually mean?
Generally 20% of brands make up roughly 80% of any market – not only because they meet most consumer needs but because they also out-market the competition. It should therefore come as no surprise that most consumers “would not care” if 70% of brands were to “disappear”.
We have a mantra at Engage Research: “Just because we can ask something, doesn’t mean that we necessarily should.” When you are designing a piece of research, it is essential to keep it focused on actual business needs in order to deliver relevant customer insights that genuinely serve the company’s commercial objectives. Anything less and the relevance and value of the research have to be called into question.
A sound, fundamental understanding of consumer behaviour and market dynamics is what underpins most successful marketing strategies – but for such research to have any true value, it must deliver practical, tangible insights that can inform either new product development or marketing planning. Research always needs to go deeper than the headline-grabbing numbers.
So the world has its seven billionth occupant, designated by the United Nations to have been a baby girl born earlier this week in the Phillippines. That 7bn is predicted to become 8bn by 2025.
On the surface this indicates a growing potential global market for multinational or aspiring multinational brands to target. But the details behind the headline figure – India to become the world’s most populous country, Zambia’s population to double while others decline – are just as important in revealing how brands may try to tap into changing demographic trends.
Although the BRIC countries have been on most multinationals’ radars for some time, the news of population growth may lead to a new raft of initiatives. But population growth alone may not be a good enough reason to ‘chase a country’. Having worked on various washing powder launches in India in the past, one of my colleagues at Engage came up against the issue of home washing where wooden debris from the cooking stove was used as an abrasive to clean clothes instead of a detergent. Some 25% of Indians were still doing this and, as it is effectively free, they were understandably reluctant to spend money on something branded.
There are other lessons to be learnt here. Take Nokia, as an example, which has been spectacularly pushed to the sidelines of the mobile market as western consumers look to smartphones by Apple, Blackberry and HTC, whose stock market value recently surpassed Nokia’s. The threat to the brand is double-edged because in emerging markets like India, where Nokia is still the most trusted mobile phone brand, low-end local handset makers are beginning to attract an increasing number of customers.
It is important to get beneath the cultural, emotional and functional reasons for brand purchase decisions. Cultural and economic issues can impact on how brands develop differently in different territories. In some markets western brands are too expensive and cheaper local alternatives are preferred; in other markets brands can be a status symbol, creating different sorts of opportunities.
In Japan, for example, it has always been cool for younger people to wear western brands. Over the last 20 years or more, younger Japanese have tried to differentiate themselves from traditional culture and become more outward looking. Branding has been a big part of it and it is a process that may well be replicated in China in the coming years.
Brands have to button down the insight for a product in emerging markets just as they would in any other country. This is equally applicable to brand marketing strategy. How can you leverage social media in a highly populous country with limited internet access? How can you tap into cultural norms to make your brand’s arrival seem evolutionary rather than revolutionary. It’s not only about the potential size of the market, it is about the potential for brand acceptance in those markets and the two are not necessarily in tune with each other.