Marketing & Innovation

Peter Drucker the infamous management guru has said;

“Because its purpose is to create a customer, the business enterprise has two – and only these two – basic functions: marketing and innovation”
(Management, Revised Edition 2008)

I couldn’t agree more. ‘Marketing’ because the role of the enterprise is to attract a product or service consuming customer and ‘innovation’ because without it the enterprise eventually dies a slow death. But we see time and again that marketing departments are managed as functions for ‘administrative’ versus innovative activities. Rather than being the focus of the organization marketing departments are viewed as sales promotion departments where all they do is crank out endless direct mail pieces or the latest ‘buy one get one free’ event. Marketing leadership should be about building and managing brand equity not the endless pursuit of quarterly sales results.

Having said that, if your marketing department isn’t bringing to the management table the latest and greatest idea for a new product or service then it needs a shakeup. The marketing team should be and generally is the keeper of consumer insight. It’s the group that has first hand knowledge about what customers are doing (i.e buying) and thinking and therefore is in a better position to generate ideas as well as craft an attractive value proposition for any new product.

Some organizations like to manage innovation or product development separate from the marketing team and I think there is inherent risk in doing that. Strong brands need to be managed with consistency (see previous blog entry) but having two groups responsible for maintaining a brands core values will naturally lead to different management approaches. For example, if a new product is a line extension it needs to be carefully crafted in the context of the parent brand otherwise you risk eroding brand equity with a weak value proposition. Somebody needs to be the brand advocate and it’s not a role that is ideally shared between two groups.

So, how do we resolve some of these challenges? Well, marketing needs to step up to the plate and realize that innovation is their domain and take more of a leadership role in bringing new ideas to the table. Second, organization structures need to be looked at to better align product development with the core marketing team. And third, the executive team should be constantly asking “what new products are we bringing to market in the next 90-120 days?”.

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