Futurelab, an international marketing consultancy, has a Marketing & Strategy Innovation Blog that I follow because its contributors are a group of international thought leaders with interesting perspectives on the subject. Idress Motee, CEO of Idea Couture, recently took issue with an article by Al Ries, a principal in Ries & Ries, in AdvertisingAge titled, “Innovation Should Be Seen As a Tactic, Not A Business Strategy.” Here’s a link to Idress’s response to the Ries article, ‘This Man Is Confused.” What follows is my comment about both articles.
Is branding or innovation more important? Both branding and innovation are inputs. And while each is important, neither directly determines the ultimate success of a product or service. Success is a measure of output. And output is a value proposition based on user experience and price. People will usually buy the best experience they can afford.
Mr. Ries misinterprets the basis of Apple’s success in his Advertising Age article, which says:
“Then there's Apple, which seems to be an exception to the principle that innovation cannot build a brand. Certainly Apple has been successful because of the widely held belief that all Apple products are highly innovative. That's true today, but what about tomorrow? Innovation cannot last forever. Sooner or later Apple is going to run up against a brick wall and find itself fighting a host of competitors who dominate their categories. Apple doesn't dominate any category, yet manages to compete successfully against Hewlett-Packard and Dell in personal computers. Against Nokia and Motorola in cellphones. Against Sony and Samsung in consumer electronics. Against Microsoft in personal-computer operating systems.”
To the contrary, the Apple iPod dominates the personal music player category, and Apple iTunes dominates the online music service category. This is the engine that has driven Apple’s growth over the past 5 years. Apple didn’t invent either category. And while innovation and branding have both played a part in Apple’s success, it’s real competitive advantage is a better user experience than the alternative products and services at a reasonable price.
Contrast this with the Apple Newton MessagePad, a truly innovative product that defined the personal digital assistant (PDA) category. Unfortunately, it was too expensive and did not deliver the desired user experience in terms of size, hand-writing recognition, PC synchronization, and other important user criteria. When the PalmPilot addressed these deficiencies, it restored the viability of the PDA market and became a runaway success.
Even early personal computer innovations credited to Apple, such as the graphical user interface (GUI) and mouse, were developed by Xerox at its Palo Alto Research Center (PARC). Apple’s achievement was to understand how these innovations could significantly improve user experience.
Last year Apple dropped Computer from its corporate name, in recognition that even though its share of the computer market had quadrupled, from 2% to 8%, its market position had shifted from personal computing to consumer entertainment and information. And its commercials, promotional materials and retail stores emphasize a superior user experience, not innovative technology.
The market success of a car, computer or consumer electronics device is ultimately the product of a value proposition that delivers a better user experience at a reasonable price.
