Brad,
I think price isn't the driver. It's value.
And value is part price, part performance, and part emotion. I believe the emotion and performance parts are what can be nicely rolled into innovation.
So while innovation may not be an explicit driver, dropping innovative thinking will quickly lead to a drop in perceived value.
And that, I figure, would be a bad thing.
According to a recent article in BNET, http://blogs.bnet.com/management/?p=2045&tag=nl.e713 innovation is no longer the key driver of new product development but has now become the cornerstone of process development. The article points to ease and price as the two most important factors in consumer purchasing decisions.
Do people agree? How about within the context of the emerging green marketplace? Large investments in efficiency and the emergence/resurgence of "systems thinking" surrounding sustainable operations, manufacturing, and supply chain would certainly justify this statement. However, recent studies have also shown that people are willing to pay more for environmentally friendly and cause-related products.
What is your opinion?
Brad Peirce
Naturalinks Communications
Brad: I think Margaret's basis for her assertion was pretty thin. Marc is spot-on.
Michael
I just re-read Margaret's article. Funny, but in a roundabout way she is actually arguing for innovation. She's just introduced a new constraint - price. Price is key to creating successful innovation - if you innovate a Ferrari in a market where people can only afford Tata's, you won't do well.
Unfortunately, I think Margaret excluded the price constraint from her definition of conditions for successful innovation.
All I meant to do was say successful innovation can't happen unless the innovators have a rock-solid grasp of what their potential consumers are willing to pay.
M
Marc, good points you make and I agree with Michael that Margaret's "thesis" is pretty weak as far as the use of a single item to make a point. However, it does raise a good question about the importance of price and its relevance to innovation. I think we all were witness to the over indulgence of innovation in the late 1990's with regard to the Internet start-ups. People without degrees and little experience were shooting the moon and coming up with all kinds of online services that lacked a fundamental part of successful business - does it sell? I would agree with you that innovation has to be in line with what your consumers are willing to buy and how much they are willing to pay.
In terms of the growing green market, I think we must keep this lesson in mind as we move down the path toward sustainability. People are not going to go green overnight and there is certainly a price constraint that must be considered, especially in a down economy. Recent studies have shown that people are willing to pay more for green products but I think much of that has to do more with what a product *doesn't* do versus what it *does* do - i.e. products that are less harmful to your health, products sold with less packaging, products that aren't made in sweat shops, products that use less resources to produce. So, this example of a diaper with all the wing dings was probably not the best for me to use to pose my question.
With respect to what you said, I look forward to watching how innovation continues to deliver more green products to the market at the right price points and with increasing levels of performance for the most value.
Brad Peirce
Naturalinks Communications
Thanks for the great feedback, Brad. You've nailed the point - innovation needs meaning. It needs to fulfill consumer needs - otherwise it's destined to the pile of gimmicks that look neat, but aren't going anywhere.
Keep the comments coming!
Cheers
M
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