Archive for Innovation

One heck of an innovation – simultaneous launch of 19 flavours of Kit Kat in Japan

Via Springwise:
Taking a local approach to candy bars, Nestlé recently launched 19 new Kit Kat flavours in Japan that reflect food specialities of specific districts. Each flavour is sold exclusively in the region for which it was created, making the limited edition Kit Kats popular souvenirs for travellers.

The uniquely Japanese Kit Kat varieties include yubari melon and baked corn from Hokkaido island; strawberry cheesecake from Yokohama; cherries from Yamagata Prefecture; and sweet potato, blueberry and soybean from the Kanto region. Other varieties include wasabi, green tea, apple, green beans, chilli and miso. Tapping in to the Japanese tradition of sending students good luck wishes before their exams, Nestlé also launched a marketing campaign with Japan’s postal service to create “Kit Kat Mail,” a postcard-like product sold only at the post office.


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Spinning the Globe: How markets are evolving (differently)

One of the holy cows of global marketing in the 20th century  is the concept of market evolution. The idea is that markets develop along broadly similar lines along a spectrum where the habits and behaviours of consumers in the  poorer, developing countries in Latin America, Africa and Asia will eventually become more like those in the West.  At a very broad level, this theory has held true for most of the 20th century. As wealth accumulated in the West and innovation concentrated in Europe and the US, it was common and sensible practice to roll out these innovations to developing countries.  A typical chart might look something like this:

This has now changed in two ways.

1. A Leap in Evolution. Consumer habits in some developing countries, particularly in urban Asia, are now more advanced than in the West, in several mass market categories.  (This excludes Japan, which cannot be considered a developing economy.)  The repertoire of products and services used, per capita consumption, category penetration and trial rates of new products in several categories are considerably ahead of  Europe and the US.  This is driving innovation in some categories at a rate far higher than that in the West.  Consumer habits and preferences are also evolving in ways that are very different from those in the West. The recent failure of Apple’s iPhone launch in India illustrates this:

Analyst estimates that total official iPhone sales here have yet to touch 20,000 handsets. (iSuppli) estimates iPhones cost less than $175 to build, (but) both Apple and Airtel stuck to the approximately $700 price for the phone in India, vs. $199 with a two-year AT&T contract in the U.S.  In India, then, three iPhones equal one Nano, the $2,000 car that Tata Motors  launched in India just two weeks ago.  For Airtel and Vodafone, subsidizing the phone has not been an option (because) the vast majority of Indian users have prepaid accounts…
According to Sanjay Gupta, the chief marketing officer of Airtel’s mobile business, Indians just use their phones differently. Indian customers like to forward text messages; Nearly 70% of them do that at least once a day, says Gupta. Until recently, the iPhone didn’t allow users to do that. “It’s a big functionality issue,” says Gupta. (via BusinessWeek)

2. Home-grown Innovation. The cost and infrastructure constraints of doing business in large, developing countries are fostering a reverse wave of innovation that originate there and in some cases are then rolled out to or copied by the West.  Not all these innovations are relevant in the West (in some cases they are kept out due to legal or market structure barriers) but they are certainly relevant and easier to bring to market in other developing countries. This is changing the pattern of both sources of innovation and evolution of markets.

The M-Pesa service offers Kenyans the ability to send and receive money using SMS messages. M-PESA is a new Safaricom service allowing you to transfer money using a mobile phone. Kenya is the first country in the world to use this service, which is offered in partnership between Safaricom and Vodafone. M-PESA is available to all members of the public, even if you do not have a bank account or a bankcard. (Via PSFK). This idea is now being copied in other markets like India and South-east Asia.

(In designing the Tata Nano car, which costs only $2000 ),  there were three possible ways they could have gone: work down from a car design, work up from a scooter or start with a clean sheet of paper.  By going for the third option, Tata has created a new template for developing ultra-low-cost cars…  The team even asked whether there was a need for doors and whether plastic instead of steel could be used for the bodywork. Tata has filed for three dozen patents for the Nano, mostly for innovations that are out of sight. (Via The Economist)

…from Bangladesh, one of the poorest nations on the planet.  France’s Groupe Danone built local microplants that produced one one-hundredth of the yogurt of a standard Danone facility, in part due to the lack of refrigerated storage. The microplants produced yogurt almost as cheaply as the larger ones and have now been rolled out to Indonesia. Lessons from operating in Bangladesh have also helped Danone launch Ecopack, a low-cost yogurt line, in France. (Via Fast Company)

Clearly it’s time to throw away those old market evolution charts! The constraints imposed by low incomes and poor infrastructure are leading to product and service design innovations in developing countries. These together with cultural differences are driving consumer habits and preferences in new and diverse ways – not necessarily along the same path as consumers in Europe or the US.

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Demonstrating Value: Nice Example from Volvo

I saw this at the Volvo showroom some time ago. It does a great job of visually demonstrating the value of this particular car model. With the rear seats folded down and with a rooftop carrier, this car can really pack a lot of stuff.

Meanwhile, the big news in the car market is the launch of the world’s cheapest car – the Tata Nano. The Economist unearthed some interesting facts:

…the Nano is optimised for the 95th percentile of American men. In South Asia, this makes the car downright cavernous.
Putting the engine at the back means the car’s footprint is 8% smaller but provides 21% more interior space than that of the Maruti 800, the next cheapest car on the Indian market, which costs twice as much.

The Nano doesn’t seem to need much advertising – it’s targeting people who use two-wheelers and it’s generated massive worldwide buzz anyway but they seem to be missing a trick on demonstrating the spaciousness of the car – they  could easily borrow some ideas from Volvo.

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Adding value by subtracting features

In an age where the media lays on the hype for gadgets and products with more, better features, it’s worth looking at some very successful innovations with fewer features:

a. Firefly Mobile

The fun phone designed from a kid’s point-of-view.  With just 5 keys, this phone keeps kids connected to the people who matter most.  Includes lights, sounds, colors, and animation.

b. Nintendo Wii

It doesn’t have the HD graphics, super-fast processor chips or DVD / Blu-ray drives of its more expensive competitors Sony PS3 and X-Box 360. A technically inferior product with a superior interface (the Nunchuck) and simpler games, targeted at non-users of video games.

c. Detergent / Skin Care products without perfume for people with allergies.

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New Sony Walkman Ad Campaign: Is the Medium really the Message?

Chip Heath, professor of organizational behavior in Stanford University’s Graduate School of Business, and author of Made to Stick: Why Some Ideas Survive and Others Die, took issue with Marshall McLuhan in a recent interview with McQ:

In truth, the message is the message. People who think too much about the medium—opt-in newsletters, the Internet, Web 2.0—are making the same mistake that people have made for years in education. Remember how the 8-millimeter film was going to revolutionize education? Then the VCR? Then the personal computer? The medium can certainly help, but an 8-millimeter film didn’t salvage a bad math lesson.

Case in point, the new advertising campaign for the Sony Walkman is claimed to be the first ‘monophonic ad’, created by deconstructing an original musical work into individual notes, then recruiting 128 musicians and giving them each just one note to play, thereby re-constructing the original melody, in spectacular waves of sound and movement.

Advertising that entertains, delivers the message and gets talked about – it can’t get any better than this.

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Project Blackbox: A Brilliant Marketing Concept

I’m not a CTO or any other kind of xTO, nor am I even an IT professional. But Sun Microsystem’s new Project Blackbox got my attention. An extraordinarily simple idea, as Sun puts it, it’s a mobile data centre. The brilliant part of the concept is that it’s packed inside a shipping container.

Who cares about this sort of thing? reports that:

Sun is attracting interest from prospective customers of various sizes in financial services, telecommunications and government and military markets — the kind of verticals where rapid expansion can provide a competitive advantage.

“YouTube went from zero to $1.8 billion or whatever it was sold for in 18 months,” Douglas said. “You couldn’t build a datacenter in that time, so for things that get explosive growth, this is a great fit.”

The Blackbox could also be an effective computing tool in areas racked by natural disasters, where earthquakes, floods or tornadoes trash datacenter gear in buildings. In the event of another Hurricane Katrina incident, the Blackbox could be quickly deployed to help a company get IT operations up and running.

At first glance, this seems like an extraordinary technology innovation. But actually, there isn’t any new tech innovation here. Even the concept of a mobile data centre isn’t all that new. The real innovation is to put it into a shipping container – a stroke of marketing genius.

Are there other ‘concepts’ like this out there? Write a comment and tell me all about it.

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Science Fiction Spawned Innovations II

In the vein of previous articles on innovations spawned by science fiction and some specifically from the Star Trek TV series, here’s a quick roundup of the latest from the Sci Fi Tech blog:

The Star Trek Tricorder becomes a reality at last!

Potential earthbound uses for the real-life tricorder include detecting salmonella in food, disease markers in urine, and cocaine on a rolled-up bill.

Terminator Cyborg Army ready for all-out war

Israeli defense firm VIPeR has developed an army of small cyborgs that can enter combat zones and exchange fire with enemies. Fortunately for the survival of our species, the ‘bots need to be controlled by a human and don’t act and feel on their own. That must be for version 1.2.

Another Star Trek tech – the Translator

The Voxtec International Phraselator P2 is currently being used by the Prairie Island tribe in Minnesota to pass on the Dakota language to future generations. The translator easily and accurately translates English into their native language on the fly. The device is already in use heavily in Iraq and Afghanistan by troops communicating with locals.

R2D2 coming to your Post Office!
(OK, this is not quite the real thing just yet)

The US Postal Service has decided to celebrate the 30th anniversary of Star Wars by tricking out some mailboxes to look like R2D2. Think any other government agencies will be joining the anniversary celebration? Perhaps cops will start dressing like storm troopers, or maybe the people at the DMV will start issuing licenses to fly spaceships.

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