By Marcos Fava Neves (chinadaily.com.cn)
Updated: 2010-11-23 15:21
Updated: 2010-11-23 15:21
A more unstable global environment, lower margins, incredible access to new technologies, huge information coming from the digital world, higher risks, complexity and the emergence of new competitors and "copy-etitors" (companies that copy immediately the product) brings a dynamic world of opportunities, challenging our management.
If it is difficult to run a company nowadays, to have a strategic plan towards innovation and innovative concepts is even more difficult. Executives suffer of lack of time, pressure for short term results, a fast changing environment bringing "one surprise per day" demanding our attention, difficulties to forecast and internal cultural problems related to unsuccessful planning experiences from the past and avoidance of getting more activities. Sometimes to plan is difficult since we face the arrogance of the owners of the truth, commonly verbalized with the "this doesn´t work here…"
The search for success in the current competitive environment requires companies to innovate. A traditional challenge is how to develop an innovation culture supporting the development of new products, guaranteeing growth and profitability. Given this, I think we should move further than traditional new products… How?
Innovations can be even more creative and pursue an objective of creating "a concept". I like to analyze examples of companies that launched products or ideas that became concepts. First of all, let me define a concept. It is more than a product, involves a complete package of solutions, a new behavior, a culture and even a community. It is something new that makes a difference. Imagine as examples Starbucks, McDonalds, or the new digital world: Facebook, Twitter, Google and other innovations that when they came to market, a new idea and a concept came together. How to create concepts?
The new product development process has well known and traditional activities (as proposed by Philip Kotler and several other authors of marketing). What I am doing here is adapting towards a broader inspiration of a "concept behavior creation". We may think in 7 steps, and let’s move to them.
1 - Concept Ideas Proposal: ideas could be raised by consumers in chats, emails, formal letters, discussions, tests, surveys and communities. It involves description of their problems, suggestions and proposals of improvements. Ideas also could be given by suppliers, distributors and salespeople, by outside and inside research and development areas, employees, shareholders and others. We must be stimulated to give ideas of concepts, thinking about whom should use the concept; what are the main concept benefits; what will be the occasion; what needs will be met? Talk to consumers, have consumer’s labs and pay attention is a challenge.
2 - Concept Ideas Selection Process: has the objective of reducing the number of ideas of concepts to a few attractive and practical ones evaluated in accordance to the requirements of success (reputation, brand, R&D, HR, marketing, production, etc.) and the company’s competence with the issue.
3 - Concept Marketing Strategy: this steps plans about the size, structure and target market behavior; the planned concept positioning and details of prices, channels, communications, selling, profit goals in the long term; cost and profit estimates (Cash Flow Statements).
4 – Building the Integrated Concept Network: How to design this concept as an integrated network of contracts, participants, the financial design, partners and others. Who will participate in this innovation, what is the "architecture" of the concept, its participants and tasks.
5 - Concept Physical Development and Testing: physical development of the concept, involving all tests and approvals needed. At this moment we should see how consumers and other stakeholders will react and perform market tests.
6 – Make it Happen (the Launch of the Concept): This phase means go to market. We should think in when? (timing choice); where? (geographic strategy); to whom? (target markets); how? (market penetration strategy);
7 – Continuous Redesign - A concept, when created, is not forever, must be permanently renewed. A concept must bring value to the consumer’s time, ambience, building a "lock-in" strategy (try to create difficulties for the consumer to change our offer towards a competitor, have clubs and communities to support like miles club, cards, culture clubs, among others, a clear communication, a superior value in quality, design and problem solution driven. And always think about how to improve.
In this article I raised seven steps towards a concept creation. The most important behavior that we should pursue is to pay attention, to be curious and to navigate since nice concepts are being created all over the world, one per day.
The author is professor of strategic planning and food chains at the School of Economics and Business, University of Sao Paulo, Brazil (www.favaneves.org) and international speaker.