At MLC, we’ve been harping on innovation for a few years now – why its important for marketers to be active participants – if not leaders – in the innovation process, bringing to bear important consumer perspectives that only they can offer. We hope you were listening, because for many industries, the time is coming fast where innovation won’t be a luxury but a necessity to stay afloat.
For an example, look no further than the auto industry. The recession years saw a few automakers nearly go out of business, while others, like Hyundai, Kia, and Subaru, posted double-digit increases in sales and market share – albeit in a seriously depressed market. In particular, Hyundai accomplished this by offering an excellent price-to-value proposition and with a few catchy campaigns that engendered a ton of consumer trust, like their Hyundai Assurance program – which allowed buyers to walk away from their car loans if they lost their income or were disabled during the term.
The recession years also saw serious pent-up demand for cars. The average age of an automobile driven in the US is now nearly 11 years, a record high, indicating that people are keeping their cars around longer and perhaps dealing with minor mechanical and aesthetic inconveniences in the process. But there’s evidence that the US economy is beginning to (modestly) rebound, and once demand returns to trend, cars should be flying off the lots – and due to the investments they made in the recession, challenger brands like Hyundai, Kia, and Subaru should be poised to take a bit more share than they otherwise would have.
That’s why it’s not surprising that Hyundai-Kia is planning two big moves for 2012: increasing overall production by around 8 percent, and bumping R&D spending by nearly 11 percent. The company wants to be ready for the return of flush consumers with an array of technologies and conveniences that compete with major players in the global market – and to have enough cars to meet the demand.
Don’t think the auto industry is an outlier. The average age of most durable goods has increased significantly during the recession, and CPGs aren’t immune either; recessionary brand-shifting won’t be forgotten the moment incomes return to trend. So, what should consumer marketers be doing to better lead innovation processes at their organizations?
First, I’d start with reading our 2010 work on radical innovation. It contains a number of insights, gleaned from the world’s most innovative companies, on how to best launch quick, protected innovations focused squarely on consumers’ higher-order needs.
Then, I’d go through our NPD and Innovation topic center, which houses the rest of our insights on innovation, including strategies for generating ideas, for managing a portfolio of innovation efforts, and finally for launching new products.
Finally, let us know in comments how you’re changing innovation processes this year to better meet consumer needs.