Innovate, don’t imitate - and keep it culturally relevant

11 Oct 2012|Added Value

When the word innovation comes to mind, we tend to think of grand, disruptive and world-changing inventions like the discovery of the electric light bulb, the advent of hybrid vehicles and the mass circulation of cellphones around the globe. There is no doubt that these category-altering products change our lives and set the standard for innovation.

Set against this, in China, where ‘new’ products hit the shelf at breathtaking speed, businesses experience intense pressure to respond to competitor innovation fast. The result is often short term imitation which actually slows down a business’ ability to create value through more distinctive and disruptive innovation. We need to remember that the single biggest reason new products fail, is that they offer the consumer no meaningful difference. As Ries and Trott wrote over 30 years ago, ‘If you are not different, you had better have a good price.’

But disruptive innovation is hard and cannot always be relied on to deliver short term results. So how can businesses in China manage innovation to deliver in both the short and medium term?

We believe that the answer lies in applying the practices and disciplines which produce disruptive ‘innovation’ to the task of brand and business ‘renovation’. Every-day, small-scaled brand and product upgrades based on design thinking and creative problem-solving, are also improving our living standards in fundamental ways and creating competitive advantage.

Incremental renovation of this kind not only means acquiring and applying the relevant technology, but also entails understanding consumers’ ever-changing needs in a holistic, culturally-sensitive way. Successful innovation is solidly based on accurate knowledge of consumer culture and anticipation of desires and societal shifts.

Let’s look at an example to see how product and packaging renovation has sustain and grow brand loyalty for a premium chocolate brand. From our experience, Chinese consumers look for novelty and uniqueness in this category and a lot of purchase is driven by gifting purposes. With this understanding, we discovered that this product’s area of innovation rests on upgrading its look and packaging without fundamentally altering its formula. For example, a special shape of the chocolate, a ribbon on the box, designed properly, would make this chocolate brand stand out more, and maintain and expand its core consumer base. Similarly, harnessing seasonal design to refresh brand identity and reflect the spirit of traditional Chinese holidays is a very effective way of keeping your brand fresh and relevant to the lives of your customer base.

Keeping your brand culturally distinct and consumer relevant is a never-ending task which demands a constant supply of short term renovations, turbo-charged by the cyclical introduction of game-changing innovations. What both forms of innovation share is the need for a deep understanding of your consumers in the context of their culture.

Written by Paul McGowan, Chief Marketing Officer, Added Value Group  and JingHuan Liu, Associate Director, Oracle Added Value
Originally published in Campaign Asia’s China Report, September 2012

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