Sunday Nov 17, 2024
Sunday Nov 17, 2024
Tuesday, 25 June 2013 00:00 - - {{hitsCtrl.values.hits}}
Last evening, the Chartered Institute of Marketing (CIM) Sri Lanka Region chose to focus on value innovation at the inauguration of its 13th Annual Conference, with Institute of Management (IIM) Ahmedabad Marketing Professor Abraham Koshy delivering the keynote address titled ‘Value Innovation’ at Waters Edge.
“Innovation is searching for a problem where a solution can be fitted in. It is a solution generated for a problem,” stated Koshy, adding that innovation is a reaction to three things: consumer problems, innovation as a natural outcome of technological solutions and competitive forces.
He explained that at an innovation awards ceremony held in India, the winner of the best innovation award, who created a gadget that helps people with physical disabilities, came onto the stage on a stretcher. “He innovated a product that solves problems of similar kinds of people,” said Koshy, thus explaining that sometimes great innovations come out by observing consumer problems.
Speaking on the second type of innovation, he added that some innovations were formed as a result of a laboratory experiment. He said: “Most of the innovations have come out of laboratories. Only some get commercialised.”
Under competitive forces, he posed three questions: “Do you have the capabilities to spot value adding opportunities? Do you have technology tracking mechanism? Do you have the strategic positioning to value innovation?”
When it comes to technology innovation, it is quite easy to identify who created innovative products. He added: “Who was the pioneer? Apple. Who was the follower? Samsung.”
In order to have strategic positioning, he stated: “Are you emphasising efficiency or creativity? If you are emphasising efficiency, do the thing you are good at repeatedly if you are efficient.” Taking the fashion industry as an example, Koshy stated that women’s wear signals change, innovation and profit while men’s wear signals stability and durability.
He also revealed that the abilities to imitate and borrow are both needed in an organisation. It becomes necessary to imitate someone in order to get better and borrow in order to innovate better, stated Koshy. As an example he revealed that the Swatch Company designed a watch by borrowing from the fashion industry.
Finally, he explained that every organisation has to be clear about their action plans? “Innovation by definition is tolerance to failure.”
He further spoke about the principle of frugality. “It is not about taking out features that consumers need. How do you cost efficiently by taking out the extra fat in your system?”
In order to do that, organisation must see value from two different perspectives – value from the perspective of the firm and value from the consumer’s context. He questioned: “How do I up sell, cross sell and manage my engagement with the customer?”
From a customer’s perspective, he stated that it becomes essential for the consumer to know and understand why such a product should be brought. Do customers get something worthwhile out of changing his choice of brand for another? It is vital for a company to look into consumer’s requirements.
Chief Guest Nestlé Lanka Managing Director Ganesan Ampalavana also shared his insights on value innovation by stating that value innovation was not a product, but a lifestyle. He added: “It’s a choice that we have to make to innovate, to adopt, to adapt or to drive.”
At Nestlé, they follow renovation. He said: “Not all innovation is abrupt and happens suddenly. Most of our innovations happen in small doses.” For example, their brand Nescafé has gone through small changes through the years, going from pure coffee to capsules.
Just like there has been an innovation economy that has moved from black and white TVs to colour high definition TVs, at Nestlé they have moved from the 4Ps – product, price, place and promotion – and gone into using the 3Vs – value proposition, value chain and value consumer.
Ampalavana revealed that more than one billion people in the world live on US$ 1.25 a day. He added: “Renovation is the only thing that can stop this.”
Pix by Upul Abayasekara
