Marketing innovation

Consumer needs change over time. Brands grow sales when they can create and launch new products and services to meet these new needs. This marketing innovation can be made more likely to succeed by learning what has worked for other businesses. Read our guide to key marketing innovation models and processes to raise your marketing innovation game.

Marketing innovation

How this guide raises your game

  1. Learn the different types of marketing innovation and what each means for your business.
  2. Understand marketing innovation process options to move from ideas to launches.
  3. Get ideas on how to manage marketing innovation once it has launched to market.

Marketing innovation refers to the creation and launch of new products and services. It brings together the expertise areas of market research and marketing planning with operational management and financial planning.

Most businesses see marketing innovation as an opportunity to find new ways to grow their business. As the needs of target audiences evolve, marketing innovation plays an important role for business to  :-

  • Identify growth opportunities.
  • Set up efficient processes to create and launch new products. 
  • Manage the launch and post-launch marketing plan.
Man holding lightbulb to symbolise new ideas and brand introduction

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How to identify growth opportunities from marketing innovation

Marketing innovation has a broad scope in terms of outcomes.

It can be as simple as a change to the colour of your product. Or as complex as the creation of a completely new category which changes consumer behaviour.

To help organise this broad scope, it is worth a look at how to categorise innovations.  Different types of innovations require different approaches in terms of processes and resources and expertise required. 

The most famous marketing innovation classification system is the Ansoff matrix.

This model first appeared in the late 1950s and has been in use ever since as a start-point to guide marketing innovation thinking.  

It categorises marketing innovation by looking at products and markets. The model classifies innovations by whether the innovation is for existing or new versions of each of these elements. 

When you combine the existing / new answers for both product and market, you have a 2 x 2 matrix with four classifications

Ansoff matrix - Marketing innovation options - 2 x2 matrix of new/existing products and markets

We’ll review what each of these classifications means in terms of marketing innovation. 

Market penetration

Market penetration is a strategy based on an adaptation of an existing product to sell to existing markets. The aim is to grow your share of the existing market. 

The most common market penetration approach is to refine product features or benefits to attract more consumers. This usually involves improvements in the quality, performance or appeal of the product. 

For example, if you make your product available in more colours or styles. Or you make it easier to use. You can also improve product reliability and durability.

Ideas on how to generate these sorts of improvements normally come from customer feedback and market research. 

Other market penetration activities

Market penetration can also come from other activities beyond product improvements. 

Let’s say, price is a big factor in the market for example. You could look to find more efficient way to source or produce ingredients or components. This innovation through efficiency would help you to offer the consumer the same quality of product but at a lower price. 

Market penetration active often comes from the 4Ps marketing mix  which we cover in our guide to marketing plans. Market penetration can come from price promotion, channel plans and new communication campaigns, for example. 

Another market penetration option is acquisition. This is where you buy out or merge with another player in the market so that combined, you have a larger share of the market. 

Market penetration activities are seen as the lowest risk way to drive growth. This is because the activities are based on existing knowledge and familiarity.

There are therefore less unknown factors to consider than in any of the other classifications. However, the size of the opportunity and growth can be smaller as the frame of reference is limited in scope. 

Marketing penetration can also often require significant levels of marketing investment to grow share. Competitors will be be aggressive to defend their market share. 

Market development

In the market development type of innovation strategy, you take existing products and look for new markets for these products.

The simplest and most common way is to expand geographically.

You could look to sell your products and services in new districts, cities, regions or countries to grow your business. 

But you could also look to stretch your product offer to attract new customer segments

You might revisit the segmentation, targeting and positioning process and identify additional segments and targets beyond your current scope. 

Can you adapt your existing product range to appeal to a different demographic segment for example? Let’s say you have a range of health and beauty products for women. Could you launch a men’s range as a form of market expansion? 

Would any of your existing products be suitable for a different occasion? Either a different time of day or a different venue. If you run a restaurant, could you convert your recipes into products which could be sold to ‘cook at home’ consumers?

And finally, are there different needs or wants that your product currently solves beyond its existing market?

Look at the famous story of the creation of Post-It Notes. 

The technology to create post-it notes was originally as a low-tack adhesive. But it wasn’t until another engineer identified these notes worked well as a place marker in his books, that the idea for post-it notes as we know them today took off. 

Of course, not every idea takes off in the way that post-its have.

Revisit the benefit ladder

But you should go back and review benefits from your benefit ladder when you created your brand identity. Some benefits may not have made it to your final positioning, but could be ideas for marketing innovation. 

There is more risk associated with market development than with market penetration.

Lack of knowledge about a particular geography or consumer segment can make it harder to create the right marketing mix for that audience.

It can often be a trial and error process until you find the right mix. What works in your existing market, might not translate well for social, cultural or competitive reasons.

So, while there is a much larger opportunity, market expansion also comes with its own set of challenges in terms of marketing innovation. 

Product development

If market penetration is the improvement the features or benefits of existing products, then a product development approach is about a more radical change to the nature of the product.

In his famous book, the Innovators Dilemma, Professor Clayton Christensen defined the distinction between sustaining innovation and disruptive innovation. 

Sustaining innovation fits into the market penetration box. Competitors in a market upgrade the features of an existing product to improve performance.

Christensen’s book outlines a number of industries where competitors focussed their innovation to upgrade existing products like hard disk drives, mechanical diggers and steel plating for example. Sustaining innovation in these industries meant an increase in the storage capabilities of hard disk drives or an increase in the power of mechanical diggers. 

But in the book, he also talks about disruptive technologies. These are based on changes in the nature of the benefits sought by the target consumer.

So in the case of disk drives, newer manufacturers took over because they reduced the size of disk drives to fit into smaller devices.

New manufacturers who could produce diggers that were more agile, reliable and easier to repair took share from more traditional manufacturers who relied on power improvements. 

The balance between sustaining and disruptive innovation

There is a fine line to walk to find the balance between sustaining and disruptive innovation. Sustaining innovation can drive growth in the short to medium term. It is comparatively low risk since the target audience is already familiar with the products and technology.

Disruptive innovation takes longer to impact, since the products need to be developed and evolved and consumers to become aware of the new benefits.

But in many markets, there is a tipping point where the new disruptive technology takes over and the companies who have been stuck in sustaining mode find themselves out of touch with the market and rapidly losing share. 

There are many examples of this. Look at Nokia and Blackberry for example.

These brands dominated the mobile phone market at the end of the 1990s and early 2000s. But they focussed on improvements to the phone technology which was a sustaining innovation.

But they were unable to react to the launch of the Apple iPhone in 2007 and it’s disruptive innovation. The iPhone was more than a phone. The new media and interaction capabilities that it brought changed that market forever. Consumers expect more from their phones. 

Old mobile phones including Nokia

In terms of risk, product development and market development are usually seen as quite similar. This is because they each have a combination of known and unknown elements to manage. 

Diversification

The final box in Ansoff’s matrix is that of diversification.

This is where new products AND new markets are pursued.

These could relate to the existing purpose of the business. Maybe a core expertise that is translatable to a new product and market offer? We’ll come on to an example of this in a second.

Or in the case of big multinational conglomerates it might be the acquisition of a business to add an expertise in a fast growing area, such as when Unilever bought out Dollar Shave Club. 

Diversification is seen as the most risk of any of the options as it involves the greatest number of unknown elements. 

Case study example : Sydney Pizza Company

The Ansoff Matrix makes a lot of logical sense. But we recommend to use it properly you need to translate the conceptual nature of the matrix into actual business examples.

So, as a mini case-study, let’s look at how the Ansoff Matrix could be applied to a fictitious pizza Company business.

Market penetration

So, for this business, a market penetration strategy would aim to get more of our existing customers to buy more pizza.

 

Ansoff matrix - marketing innovation for pizza shop example

So we could decide to create new pizza toppings to add to our range. This is an improvement in the product offer.  The assumption is that a broader range will have more appeal to consumers.

Market development

But we could also look to grow our business through market development. As outlined in our segmentation, targeting and positioning skill guide, there may be neighbouring suburbs with high potential. Setting up a delivery service to these new areas could grow our business. It would be a clear market development innovation. 

Product development

Our pizza company could also look to innovate by understanding that  customers who like pizza also like Italian food in general.

So the company could extend the range of products  to also include other Italian food like pasta and sauces. This would be an example of product development, since the new products are for existing customers of the restaurant and delivery service. 

Diversification

Finally, as an out of the (pizza) box option, the pizza company could take that theme of “Italian cooking” further. They could stretch it into a completely different area by offering cooking classes in Italian food. This would still “fit” with the brand identity.  But it would be a diversification into new products (education) and new consumers. Since at home cooks will likely differ from those who order takeaway a lot. 

Ansoff’s matrix – How to use 

Ansoff’s matrix is a useful way to classify different types of innovation. Its core 2 questions of existing and new for products and markets can stimulate ideas. These ideas can be a great thought-starter for marketing innovation. 

Growth from marketing innovation can come from any one of these four boxes. And for your business, they do not have to be mutually exclusive.

May businesses will run multiple marketing innovation projects concurrently. And then projects can be spread across different boxes so that you have a portfolio of marketing innovation projects. 

Short-term – market penetration

The choice to have a few ‘market penetration’ projects can give you a few safer bets for innovation. These types of marketing innovation are more likely to generate a short-term return. This keeps cash flow and annual profit rates ticking over. 

Mid-term – product and market development

Both market development and product development have more of a mid-term perspective. They can incur more risk and development costs, but when they pay off, they are typically much higher drivers of growth than pure market penetration. 

Long-term – diversification

Diversification comes with the most risk. But when done well, it can also lead to the highest rewards.

It would be unusual to bank your future success purely on diversification. The risk of failure puts many people off.

More common is to test diversification first in a smaller and more  agile way. Whereas the other options for innovation are typically delivered via a more structured and formal approach.

This formal and structured vs an agile test and learn approach to innovation is what we will move on to next

The innovation process – Formal vs agile

There are two opposing views on “how” to manage marketing innovation. 

The formal view is that marketing innovation requires a high level of investment from the business in terms of money, people and time.

This high level of investment means you need to manage the innovation in a formal, structured way. You need to put safeguards in place to ensure no unnecessary risks are taken to threaten the business or waste resources. Tried and tested procedures should be in place to ensure marketing innovation projects meets all internal guidelines. This could be quality standards or expected return on investment for example.

This formal process should be widely enforced across the business. This means that more time is spent on projects and less time on the process.

Formal innovation projects run with a waterfall approach. The project team follow a series of logical sequential steps to deliver a specific end goal. This is the traditional way to run marketing innovation projects.

While this approach brings a lot of control and consistency to the process of marketing innovation, it also brings challenges.

Challenges with formal innovation process

Two challenges stand out in particular.

The first is the length of time for an idea to move through this formal process. The process normally involves a number of screening or approval sessions. Senior managers in the business review the plan and approve or reject the idea. 

With three, four or more of these approval stages, this adds a lot of time in to the process. In the formal model, marketing innovation ideas will be slow to launch to market. 

This can mean that the business can miss out on growth opportunities if a competitor launches faster. Or something else happens in the market while the product goes through approvals. 

The other challenge the formal approach faces is that it is often complicated and inflexible.

In the formal innovation process, businesses set innovation delivery requirements. For example, a target level of sales or profitability in year 1 or a change in behaviour of a target audience.

These requirements screen out any ideas which don’t meet the company objectives. They become hurdles or gates that the idea needs to cross in order to launch. 

The challenge here though is that these expectations are generally based on existing reality. So, they tend to suit sustaining innovations as we described above. It’s much easier to prove the business opportunity of a market penetration innovation. More is known about that market.

Because there are more unknowns in product and market development and in diversification, disruptive ideas can find it harder to pass through a formal innovation process. Often, there will be a level of scepticism and caution about the size of the opportunity. 

Agile marketing innovation

So, in recent years, a faster and lower risk approach called “agile” marketing innovation has gained a lot of appeal.

In this approach, there remains some process guidelines in place, but it is much more fluid. These types of projects are set up with a much smaller, faster and leaner approach.

In agile, you don’t focus on finding the one big innovation that will be a blockbuster launch. Instead you  take much smaller “prototype” innovations to market with small segments only.

These multiple small launches gather feedback directly from consumers. And only, when the feedback has been applied to a prototype idea does the project get more scaled up. 

In reality, these two views are at either end of a spectrum. Which approach will suit your business very much depends on important factors like your approach to risk, the speed of innovation in your category and the size and expertise in your business.

We’ve found larger business tend to prefer the traditional approach while smaller businesses benefit more from the agile approach. 

The formal innovation process

Let’s look at a formal innovation process in more detail.

This can vary from company to company but would typically have 6 stages as you can see in our diagram.

Ideas move through the process sequentially. After each stage is an approvals to move to the next stage.

And at each stage, more resource is committed to the project (either in terms of budget, time or people).  The level of detail behind the plan grows.

 

Marketing innovation process - formal approach to screening and approval

At any stage, a marketing innovation idea can be rejected. Only the very highest potential ideas or plans make it to launch.

This creates the idea of a funnel of ideas with many ideas in simple form at the start of the funnel. And only very tightly defined and scoped plans make it to the end of the process and the launch.

Idea generation

At the idea generation (often shortened to ideation) stage, the aim is to generate as many ideas as possible.

At this stage the “idea” is kept really high level or simple. It is often succinct enough to be written on a post-it note.

Often businesses will run ideation workshops with outside facilitators.

The aim is to generate as many ideas as possible. Many of these techniques such as brainstorming are taken from the area of creative thinking

Post it on wall with light bulb illustration to highlight creative problem solving

At the idea generation stage, EVERYTHING is possible. It’s a key part of the idea generation process that there is no judgement of ideas early on in the process.

What might sound like a crazy idea to one person can spark a better idea in another person. The aim to have as many ideas as possible comes from the assumption that out of a large starting number ideas, you will find the 1 or 2 best ideas. 

Idea screening

From these high level ideas, the next stage is to flesh out the detail of the idea. At this stage, it is about asking the originator of the idea to apply some more thought to the original concept.

The idea here is to not go too detailed. The idea originator has to complete a one-page template with more details about the idea. 

Idea screening template example

As you can see from this example, each idea has nine preliminary details attached to it. These help to define the idea in more detail so the business can decide whether to pursue it. 

Idea generation to idea screening template

The original “post-it idea” becomes more refined.

These details include a name, a short summary of the idea (no more than a few sentences) and how the idea fits the brand vision, identity or growth objective.

Then, some preliminary external factors such as the consumer insight and competitive environment. You would also include some preliminary internal factors such as the product or service requirements and any enablers or obstacles and barriers.

Finally, an estimated launch timing is also included.

Idea screening example

So let’s go back to our product development example of a new pasta range for our fictional pizza company.

You can see from this example how you would add a few sentences against each of the criteria. Your aim is to make it clear why the business should pursue this idea.

At this stage you don’t need a high level of evidence or proof. But you do need to be able to articulate the idea in more detail. This lets the business compare different marketing innovation ideas against each other.

You will be able to see which projects have the highest potential.

Idea screen example - pizza shop

At this stage, obvious gaps or issues with ideas will become more obvious. So, it’s at this stage that some initial ideas get rejected.

You should keep a record of these rejected ideas though. They can be useful stimulus for future marketing innovation sessions.

Sometimes good ideas come up that the time isn’t right to do them. But in the future, an old rejected idea might become a better fit if conditions have changed in the market or business.

Business case

For ideas which have started to be fleshed out with more detail, the next stage is to apply more rigour to the idea through a business case.

Most businesses will have their own idea of formats for a business case, but in our example, the business case would have 3 core elements.

The first part of the business case would essentially be the same template from the idea screening process. 

How will the idea develop?

But while that first template was relatively easy to complete, now the process becomes more challenging. 

You have to start to investigate in more detail HOW the idea will be developed.

At this stage, you might test the idea with consumers through qualitative research for example. There is a need to flesh out the opportunity in more detail.

The business case will need to review key areas like the target audience and the fit to the brand identity.

marketing innovation business case challenges

This document will also define the preliminary marketing mix. It should cover price point, channel and customer trade plan and a high level view of promotion and communication requirements.

The aim of the business case is to test the validity and likely success of the idea. It can challenge how the idea will perform against competitors. It can explore the consumer insight and the likely appeal to the target audience.

The business case will also require more detail on the financial model. It should include the forecast Profit and Loss for the first 2 to 5 years. Any additional cost associated with the launch such as new machinery, extra staff, R&D costs or extra marketing and advertising expenditure should be included. 

Compare innovation ideas with a scoring matrix

The third and final part of the business case will generally involve some sort of scoring matrix.

In the scoring matrix will be a set of decision-making variables defined by the business leadership team. Typically, these will cover financial and strategic fit criteria to evaluate the opportunity. 

In this example, you can see we have identified three financial criteria to be evaluated – size, profit and spend.

For each criteria, the idea would get a score – 1,3 or 9 – based on how it performs. Because size of opportunity is such an important part of the opportunity, its score is often weighted up. In this case, counting its score as double. 

Innovation business case - Financial and strategy score

We’ve also identified three strategic criteria. Fit to the brand vision, level of competition and how fast the marketing innovation can be brought to market.

The idea of the scoring matrix is to allow the leadership team to easily compare between projects. This helps with prioritisation. You would generally pursue the projects with the highest score. 

Develop product to launch

If the business case is approved, then a project team comes together to take the project through to launch.

This launch plan follows a similar format to what a marketing plan might look like. In fact, it is broadly the marketing plan for the new product. 

As we’ve covered how to do that in our brand activation skill guide, we won’t repeat the detail of that here.

But as you can see, the project plan contains a summary of the high level details that will help the plan come to market. 

Business case to launch plan - marketing innovation

Usually, the final stage of this process would be a final approval by the leadership team of the business.

This requires the most detail of any stage. This lengthy document is the final sense check that all the appropriate preparations and plans are in place. The aim is to build confidence in the project before the launch.

Launch and post launch review

Of course, once a new product hits the market, it will need on-going support to help it grow in the market.

For this, the plan should cover who will own this, what resources are required and how performance will be tracked and measured. 

In particular, any new product launch can cause changes with competitors and retail customers. These can be difficult to predict in the pre-launch build-up.

If these changes impact on the expected performance of the product launch, you should have contingency plans to keep the performance on track. 

Benefits and challenges of the formal innovation process

The main benefits of this formal process is that it reduces the likelihood of bad ideas making it to market. All ideas have to go through a series of hurdles before they can launch.

Anyone who has a stake in the innovation launch has a chance to put their views in to the mix. The assumption is that the idea becomes a best version of lots of different points of view combined rather than one person’s idea. 

However, as we’ve previously outlined, the downside of these hurdles and stakeholder engagement is that the process can become complex and slow.

It also requires a lot of discipline to maintain the integrity of the process. It’s easier to NOT do things than do new things. The process can be derailed by competing views of different functions in the business.

Though it is designed to be an innovation process, the focus is on eliminating rather than creating ideas. It can cause a lot of frustration when ideas get rejected when they are quite far down the process. 

Agile innovation methodology

An alternative to this formal innovation process is the process of agile or sprint methodology. 

In this methodology, big ideas are broken into much smaller chunks. Dedicated small teams work on these smaller ideas in 2 – 4 week ‘sprints’.

These teams are empowered to deliver against the idea. The agile process defines clear roles such as Product Owner (the ‘decider’ on the idea), the Scrum Master (the leader of the project team) and the Subject Matter Experts on the team (usually between 6 to 8 technical experts).

Woman doing yoga to demonstrate flexibility

The idea for this methodology came from large scale IT projects as we cover in our guide to marketing technology.

In a similar way to the slow progress of the formal innovation process, these types of projects often got bogged down in internal decision making. They become very complex very quickly.

So, the idea of the agile methodology is to keep momentum with shorter bursts of activity. The aim is to have something tangible at the end of each sprint to share.

In this way, smaller versions of the innovation idea can be tested much more quickly and then refined in future sprints.

Prototypes

The idea of prototypes is really common in agile methodology. The agile team build a core feature or function of a product and then test it with consumers.

In the next sprint session, you test another feature or function. So over time the product features are gradually pulled together into the finished product.

This type of approach does tend to work better where speed is of the essence. It does need the culture of the business to be recognise that there will be a trade-off between the likelihood of success and the speed of delivery. 

In agile, more ideas will fail, but they will fail with far less investment or cost. And with more ideas in the process, there is a higher chance of a winning idea that launches sooner than the formal innovation process can deliver. 

Agile still does have processes behind it. But they are generally much stripped down compared to the more formal innovation approach.

Because the teams are also necessarily smaller and the Product Owner can take decisions without the need for a leadership committee, it does require other parts of the business to buy in to the process. They will have less opportunity to input or approve. 

The Product Life Cycle

Another important consideration in the innovation mix is that of the Product Life Cycle. 

This addresses the challenge of how products evolve over time once they launch.

This concept originated back in the 1960s but is still commonly used today.

It can be used to identify the most likely scenario of sales, investment, competition and profit that a marketing innovation will see over time if it is successful. It describes the ‘life’ of a product. 

Product Life Cycle - Introduction, Growth, Maturity, Decline with Sales, Investment, Competition and Profit

Challenges to the Product Life Cycle

One of the obvious challenges to this model is that it is not universal. Not all products will follow this S-Curve pattern. Many products never make it beyond the introduction stage.

Marketers who use the model also point out that the maturity and decline stage has become a self-satisfying prophecy. In fact, it is possible with disruptive innovation to breathe new life into mature products and categories.

Those challenges aside, the Product Lifecycle model remains a useful guide to forecast, plan and manage a new product after launch.

Introduction

The Product Life Cycle shows that new products rarely reach their peak quickly. It takes time to grow sales after the launch.

This makes sense when you think that when a product launches, the market will not be aware of it. Strong communication plans will move consumers down the adoption funnel as we outlined in the marketing planning skill guide but this process takes time. 

How much time depends on the nature of the new product and the size and scale of the brand behind it.

Bigger companies will have bigger launch budgets and expect faster results. 

But in smaller or slower moving categories, it can easily take 6 to 12 months for new product launches to gain impact with consumers.

Commercial mix post launch is key

From a business management point of view, it’s important to understand the commercial mix here.

Sales may be at low level, but a high level of investment in advertising and communication is required in order to move consumers through the adoption curve from awareness and consideration to trial.

Unsurprisingly, profits at this point will be low or even at a loss. It is the role of the  project leader and project sponsor to communicate the need for patience and a longer-term view on profitability.

It’s therefore extremely useful to have additional non-financial KPIs in this introduction phase. Look at factors such as awareness and trial rates as these can help predict future success.

Growth

In this phase, the growth curve turns up sharply as the popularity of the product grows and consumers become more aware and more confident about the product.

Marketing investment continues to be high in order to solidify the growing scale of the business. Profitability levels will start to rise because of the growing sales helping to bring more scale to the business. 

At this point though, competitors will start to take notice of the success of the marketing innovation. Competitive offers become more likely.

The objective at this stage is to maximise the growth and share options. You want to drive growth through more wide-spread adoption. 

Maturity

At some point growth rates will start to slow down as the category / product reaches a point of maturity. This maturity phase accounts for the most people in the market and the product takes on a mainstream status. 

This stage can be extremely profitable. The level of investment required to maintain sales can be much smaller as a percentage of total sales than is required to drive growth in earlier phases. 

The key challenge here though is that because of the size of the market, competition will likely be high.

Bigger players in the market will look to defend their size. This can often lead to more aggressive price positions.

Bigger players will also look to sustaining innovations to keep this profitable maturity position going as long as possible. They can become fixed on the short-term. This maintenance of sustaining innovations can quickly become threatened by new entrants to the market with disruptive innovations. 

Decline

At some point, the model argues all products will start to enter a decline phase.

A new product or invention might fill the need better, the market might become so saturated that that there are just fewer new consumers.

Or it can just be that fashion, culture or lifestyle trends have changed. 

At this stage, investment will reduce. The business effectively milks as much as it can get from what is left in the category. 

These four stages of the Product Life Cycle – Introduction – Growth – Maturity – Decline – can give a useful guide to predict what might happen with your marketing innovation.

It’s helpful to understand what the business model and commercial mix might look like. But bear in mind that marketing is not just about the product, it’s also about the consumers that buy the product. 

The Innovation Adoption Curve takes a similar view of how marketing innovations roll out to market but takes a more customer centric view of innovation. 

Innovation Adoption Curve

In this model, the S-Curve of the Product Life Cycle is mapped towards consumers rather than products. The assumption is that certain types of consumers are more open and willing to take risks on new products than others. 

Innovators

It argues that there is always a small group of consumers who love to be the first in the market to try new products. They are curious and passionate about the category and willing to pay for new experiences.  

Consumer adoption of marketing innovation.

These innovators will usually be small in number but can be useful as influencers since others will recognise them as being experimenters, experts and pioneers.

These will be the group of consumers most likely to buy or try a product during its introduction phase. Typically, these consumers might only make up 2.5% of total sales, but they are important because they will likely be the FIRST 2.5% of sales.

Early adopters

Early adopters are a larger group who can often make or break the success of a product. These types of consumers are closely allied to the growth part of the Product Life Cycle.

They may not always be the first to try new products, but they will closely follow the behaviour of innovators. Early adopters are open to try new ideas once they see some endorsement from innovators.

They are an important group because they typically account for around 13.5% of sales.

And when a product has reached >15% of the market (the innovators and early adopters combined), it has enough visibility and usage that it starts to pull in consumers from the majority.

There is a theory from the book Crossing the Chasm by Geoffrey Moore that the leap from early adopters to the early majority is the toughest part of any innovation process. There will always be groups of people willing to try new products. But  the leap from ‘new’ to ‘mainstream’ can be particularly challenging.

Early and late majority

This group is the biggest and most profitable group.

However, it takes time to reach this group as they are usually settled into established routines. They don’t move to accept new innovations until they have some sort of social proof that is has become accepted in the market.

They are more cautious around new innovations. But once a product has become ‘accepted’ and it becomes part of their routine, they will become of long-term value.

Laggards

Laggards are the last group to ‘get’ new innovations. They are typically conservative. This group only enter the market when often there is no choice not to, or that prices have dropped so it is a low investment.

Finding your marketing innovation approach 

One of the biggest challenges when it comes to marketing innovation is the lack of certainty about which products will and won’t work. Even companies that today would be seen as world class in innovation have had product failures in the past.

Apple’s iPhone has been phenomenally successful but its Newton product was seen as a flop.

Google’s innovation in search algorithms is unmatched but its much vaunted Google Glass project was quietly discontinued.

Amazon is a hugely successful online retailer but heavily promoted innovations like its Amazon Dash buttons or its Amazon Spark shopping program have been discontinued. 

Have a pipeline of marketing innovations because some will fail

And in those examples is probably the biggest learning to made when it comes to marketing innovation.

There are some tried and trusted methods to give marketing innovation projects the greatest chance of success.

Whether you choose the traditional, rigorous formal way to create marketing innovation or prefer the newer, faster agile route, all you can really control is to increase the chances of success. But accept, that there is never 100% certainty with any innovation. 

You should always try to have contingency plans. Have a pipeline of innovation projects in development.

So if you do have to make the tough decision to cancel or walk away from a marketing innovation, it does not kill your business.

Have something else as back-up, so that the next project might be the one that hits that magical growth curve uplift and adds massive value to your business. 

Marketing innovation lessons

There’s a lot involved in the process of marketing innovation. To read more of our thoughts about how to make innovation work for your business, check out our article on our big four marketing innovation lessons

Three-brains and marketing innovation

Need expert help to drive your marketing innovation

We have many years of experience as marketers creating and launching successful marking innovation projects.  

We offer coaching and consulting services to listen to your marketing challenges and get you to successful and pragmatic answers quickly.

Reach out to us and see how we can work with you to raise your game. 

Latest blog posts on marketing innovation