Brand-driven innovation: the origins.
In an era of stagnant markets, technological disruption, rapid changes in consumer behavior and, where can big brands find their growth? One popular approach is to stretch a brand into an adjacent marketplace where it can still be relevant to consumers. This approach is becoming increasingly common in food and beverages, where traditional category boundaries are disappearing, but it has traditionally helped many brands tap on growth in different markets.
While Marlboro launched travels and fashion to overcome the ban on cigarettes and retain awareness for the brand, there are more classic examples: many cereal brands – like SpecialK – have moved beyond breakfast into snacking by launching cereal bars. Pirelli launched a successful fashion line, which for years was one of the hottest brands in Milan.
Market leaders are taking this approach further by leveraging their brand as a springboard for driving innovation in an entirely new marketplace. For instance, take the Virgin, which from a records company, has successfully broken barriers in media, telecom, airlines, aerospace, and many more sectors, always under the Virgin brand.
Probably the most notable case it’s Apple’s adoption of the iPhone. A case study of how it became a new entrant by creating new business spaces that capitalized on the unique link between its brands and consumers. Less well-known, however, is that innovation can also lead to a “halo effect” by attaching new cachet and prestige to the original brand. For example, when the iPhone was released, sales of Apple Macs increased by 16 percent, almost eight times the growth rate of PCs overall.
Brand-driven innovation has become more prevalent in recent years for several reasons. If you are an established player in a saturated market, it will be difficult for you to gain much more market share. You should enter a new category if it is your only realistic option to meet your growth targets. Brands are increasingly defined not by the campaigns they run or the messages they communicate but by the customer experiences they offer. In addition to strengthening or sharpening a brand’s position, brand-driven innovation may also expand and complement the brand’s equity. Consider how Apple’s position seems to grow with each additional category it enters.
With the advent of 3-d printing and rapid prototyping techniques, coupled with the “trial and error mindset” and A/B testing capability, it has become easier for corporate innovation teams (and even individual entrepreneurs) to pitch, test, and continually improve their brand ideas.
In short, innovation is not just for start-ups; any size organization can leverage it. Leaders can also do it if they have the right brand equity.
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A framework to drive Brand-driven innovation.
1. “Know thy consumer.”
This step aims to connect the internal organization with the external world and the marketer’s function with the innovator’s function. You can achieve that scope by fostering co-creation opportunities between marketers, innovators, experts, and consumers. Co-creation can help generate insights, validate ideas, co-design prototypes, etc.
This approach to building a brand ensures that the organization understands its customers and their needs and connects the organization’s capabilities and vision to the customers’ needs and aspirations.
2. Innovation strategy.
The next step involves crafting an innovation strategy using the brand’s promise. In this stage, you must ask yourself: ‘What can we do to fulfill our brand’s promises?’ In other words, ‘what can we do to improve our ability to create new products and services that delight our customers in each stage of their relationship with our company?’.
A brand-driven innovation strategy is different from a customer-centered innovation strategy in that the former focuses more on the organization s vision and understanding of its capabilities. In contrast, the latter focuses more on the needs of the customer. Only when this vision, understanding, and insight are in place can an organization begin to create real value for its customers by truly understanding their needs. Think about how a company like Ikea uses its core capabilities (logistics) to develop innovative retail concepts, services, and warehouse management while delivering value to consumers around the theme of “making design accessible to all.”
3. Design Strategy.
Design is essential in making your brand a platform for sustainable growth; it’s not just about aesthetics. It helps to turn a strategy into a tangible experience. Design is not a magic wand that you can wave at something to make it more appealing. Design is a strategic activity and requires management accordingly.
When an organization has identified its unique capabilities and has grasped how they can be translated into value for its customers, it will benefit from the services of a multi-disciplinary strategic design team. Philips, Electrolux, and BMW are great examples of companies where design plays the glue between brand and innovation.
4. Consumer Experiences.
Touchpoints are moments and places where customers come into contact with an organization. Together all touchpoints connect the brand with its consumers’ experiences. Each time the customer encounters a branded touchpoint, the organization has an opportunity to strengthen its relationship with that customer.
The challenge of the harmonizing experiences lies in understanding the customer journey: what is the customer experience when he interacts with your product or service? Before the actual use and after the existing service. It helps organizations create value for their customers by managing their brand’s touchpoints across the customer journey.
Imagine how a company like Virgin Airlines orchestrates every stage in its new “Upper Class” experience, from booking the ticket, getting to the airport to check-in, waiting for the boarding flight, to lounging on the plane’s luxurious seats.
Thus, Brand Driven Innovation is an integrated branding, innovation, and design strategy that helps companies grow in a way that fits their vision and values and delivers accurate and lasting value to their customers. It allows organizations to create products and services that are authentic as well as relevant.
In Conclusion: Brand-driven innovation
A (solid and relevant) brand can and should be a powerful force for inspiring and driving strategic innovation. Using this four-dimensional framework, you can jump-start brand-driven innovation in a meaningful and relevant way to achieve growth within and beyond the boundaries of your original category.