The Crucial Need For Innovation In The Field Of Industrial Marketing
A recent article from a Harvard Business Review study noted that, "the key is not to stay in your current job and wait for your company to innovate." This comes at the expense of other jobs or industries. As the company that you work for continues to find ways to improve their products, they tend not only to stay ahead of competition but also provide you with opportunities for advancement.
So if you are someone with a passion for industrial marketing and are looking into finding new ways to apply your skills, then this article is just what you need! We share how companies who have had success in implementing innovative ideas have seen "considerable increases in sales growth, profit margins, market capitalization," among many others.
Industrial marketing refers to those aspects of the firm's product or service that are aimed at the industrial sector (e.g., the construction industry, transportation sector, etc.) within which it operates. These companies typically have a large share of their revenue coming from this market. This may include "new products, new technologies and services, new distribution channels." Rather than just selling their goods or services to consumers in one geographical area, these companies often rely on the entire market they serve to provide them with a steady source of revenue.
One aspect of industrial marketing that is often overlooked is innovation within an industry. Though economic data, for example, show that the rate of innovation in the US has remained steady since 1970, there still remains the need for innovation to continue in order to remain competitive. But this is becoming a more difficult feat as companies increasingly pursue same-store sales growth instead of creating new markets and technologies through innovative ideas.
What has been proven?
In order to understand industrial marketing's role in innovation and its necessary role for sustained economic growth, it is essential to analyze several cases where companies have successfully implemented novel ideas aimed at creating a new market or technological breakthroughs within an industry.
Case Study: Johnson & Johnson
Johnson & Johnson (J&J) is one of the world's largest multinational conglomerates and is considered a pioneer in the field of health care. As opposed to traditional pharmaceuticals, "nutraceuticals" are composed of various foods or substances that are claimed to have tremendous health benefits. J&J created its own form of this category by blending the science and marketing of these products.
For instance, J&J has made great efforts to prevent diseases by creating or acquiring products such as "Procrit", "Rheumatoid arthritis treatment", "J&J's Proactive Solution for Acne", and more recently, "Celiac Disease Treatment".
J&J has also been at the forefront of creating new products such as "Neutrogena", the first line of sunscreens made with zinc oxide, or "Spackle", which is an adhesive paint to fill small holes.
Through these novel products and their marketing efforts, J&J has created a market that did not exist before, while other companies have lost ground in the industry they were once dominating. For example, J&J marketed pediatric asthma treatment Advair as a safe and effective alternative to traditional inhalers. Now that some of the major pharmaceutical companies are still experimenting with this product, J&J continues to dominate this market.
Case Study: Clear Channel Communications
In a world where radio and television stations are so easily able to create huge audiences for their advertisements, it is no surprise that both of these industries have become synonymous with the term "media." But within the radio industry, there is a mutual need for companies to adapt to changing technology and consumer demands. As Clear Channel Communications (CC) has done with its own media franchise, PRISM, the need to innovate has led the California-based company towards becoming the leader in telecommunication signal management.
Clear Channel Communications has become a leading force in this field through its innovative use of wireless technology. Currently, there are over 1 billion wireless phones in use worldwide. With the advent of high-speed data transmission via wireless, it is now possible for a user to utilize both voice and data services on the same phone. Newer phones such as "Sanyo's CPD-5700-CL" are increasingly being able to provide these dual services. In order to make these products available to the growing number of customers, Clear Channel Communications created PRISM (Platform for Radio Integrated Services Mobility) that provides a medium in which 50% of mobile traffic can be transferred from land lines to wireless handsets.
This platform has allowed CC to offer both consumers and advertisers new avenues for growth within the industry.
In addition to wireless innovations, Clear Channel has also been at the forefront of developing new technologies for the use of radio-based advertising. For example, their "U.S. Radio Network" is "based on the Clear Channel network of over 1,000 radio stations" which allows advertisers to reach their consumers in an innovative way that was previously unknown.
Case Study: Dish Network
Dish Network is a satellite television provider that specializes in offering consumers better quality and lower cost alternatives to both cable TV and satellite TV services. In order to compete with other companies within this space, Dish Network must remain innovative in order for it to maintain its 60% market share (according to the company's filings). And it is not just Dish's marketing that sets it apart from the competition. The company's low-cost advanced wireless systems will be the first in their industry to provide a wireless platform for data transmission and storage, more commonly known as "the Internet."
Apart from its own innovations, Dish has also started to offer other companies' products by adding them to its own offerings (e.g., Blockbuster on Dish Network). By doing this, Dish has been able to create new markets for its competitors and thus increased market share as well.
Case Study: General Motors Corporation
General Motors Corporation (GM) was once one of the world's leading automobile manufacturers of automobiles. Though innovative in its field, GM was slow to adapt to new technologies that were becoming available. This caused them to lose market share to competitors while they had tried to reinvent the automotive industry with their own advancements in design, materials, and production processes.
In the 1980s, GM introduced the "Cadillac Seville", which relied on a new technology called "Computer Assisted Design (CAD)" to improve design quality and production process efficiency. However, the company was quick to abandon this technology after realizing that it did not offer immediate cost savings. Eventually the company realized that CAD technology was an important tool for their long-term success and they were able to implement it successfully into their designs, which led them back towards economic prosperity.
Case Study: Amazon.com
Amazon.com was founded in 1994 with the goal of creating a competitive online market for books, music and videos. By 2001, it became the largest online bookseller in the world. By 2003, Amazon had become one of the largest online retailers of its kind worldwide. Though this is quite an accomplishment by itself, Amazon has continued to pursue innovative strategies that allow it to dominate its industry even further. For example, Amazon's "One-Click" checkout process allows customers to easily purchase goods on the Internet with just one single click (as opposed to forcing you to enter your personal information before making a purchase).
Conclusion
Innovation is a cornerstone of any successful product or service. By innovating in their fields, companies not only realize significant monetary benefits (e.g., higher sales and profits), but also improve the lives of consumers and keep other companies on their toes. Consumers also benefit from innovative products as companies are able to provide them with better quality goods and services at a lower cost than what they would have had, otherwise.
By examining the empires that have been built from innovation alone, one is able to see that it does not take much to differentiate yourself from your competitors.