Innovation is an art, the art of doing something new or in a different way. This word has its origin in the Latin "innovate" which means "to renew". We can apply this concept to different areas of business, be it commercial, marketing, operational, technological, or financial, among others. Normally, marketing innovation manifests itself in the introduction of new products or in a modification of existing products, either in their presentation, performance, distribution, logistics, service, or in their communication strategy, which can be based on tangible and intangibles. Furthermore, a radical innovation could include repositioning the brand.
In the field of business, innovation seems to be something that is forgotten, and in return, it has been replaced by the word “imitation”, which has caused many new businesses to fail in the attempt to survive in a “hyper-competitive market ”, In which the big ones survive because of their strong product portfolios, while the little ones die in their gestation period.
It is not surprising then that, according to the Economic Commission for Latin America, ECLAC, "in underdeveloped countries, between 50% and 75% of initiators cease to exist during the first three years of life", a percentage that it is increasing as the span of years increases. These figures are confirmed by Marcelo Lebendiker, president of Parque TEC, a business consultancy in Costa Rica, who states that 80% of new businesses in that country fail in the first three years of launch. In turn, Lebendiker, identifies as one of the main causes of failure, the lack of differentiation or innovation, since they become “more of the same”, thus depending on the “lower price”, until the lack of profitability eliminates them of the game.
Now, the lack of innovation is not something that only affects new businesses, or new products. It also affects long-standing companies, such as the famous case of Coca Cola in 1985, when in desperation to stop its sales decline, it decided to imitate Pepsi, abandoning the position of being the “original” or “the real thing. ", For" new coke ", which was perceived as a Pepsi packaged in a Coca Cola can, causing a national rejection of its loyal consumers who identified the brand as an" American icon. " A marketing luxury that only the greats can afford. From that fact, they decided never to touch its original formula again, and in return, innovate in the way of communicating the intangible attributes of the brand, the most valuable thing they had.His leadership over Pepsi is now indisputable.
The question that arises around the alarming failure figures is, what is the main characteristic of the ones that remain? Without a doubt, an elementary factor, although not exclusive, has been innovation, as Steve Jobs, co-founder of Apple, said, "innovation is what distinguishes a leader from others."
The virtual company Amazon, in its beginnings, being a totally new company, innovated the way of selling books, and evolved even more, reinventing the way of "retailing" or "retail sale" in the world. It was not the launch of new products that led him to success, but a new way of selling, and he continues to innovate to this day as part of his corporate philosophy, thus consolidating his galloping leadership.
Although innovation can be applied to all areas of a business, it will not generate a competitive advantage in all of them. Marketing directors must ensure that it is applied essentially to the fundamental attributes of the brand, attributes that separate it from the rest of its competitors. At the same time, they must seek equality in the parity factors, so as not to be below their rivals in the secondary attributes, but that complement the purchase decision of their target market.
In the gallery of success stories of innovative companies, we can add one that has recently been incorporated, Netflix, a company that is revolutionizing the traditional form of television entertainment, a market that has been dominated by large companies. Is your future threatened? Will they end up in the Garden of Memories like Blockbuster? It will depend on your capacity and agility of innovation, to anticipate the demands of the market.
