Innovators can better implement their innovation process to create significantly different products and drive brand growth. Innovation can be a risky business and, most of the time, it is not successful when carried out in isolation from other aspects of brand building.
Just as a rocket needs enough fuel to reach orbit, a brand requires innovation to help it be perceived as significantly different and grow at a dizzying pace. Perceived differentiation is important because it helps people justify paying the asking price.
Most innovative brands have an excess of perceived difference, more than can be explained by brand size alone, indicating that differentiation is perceived beyond their user base. An analysis from Oxford University’s Said School of Business finds that perceived differentiation is the most important predictor of abnormal market returns (returns that cannot be explained by standard financial models). This means that difference not only distinguishes a brand from the competition, but also positions it for growth. In other words, perceived differentiation boosts profitability.
Remember, the “excess” difference is the main indicator of growth potential. Brands must innovate in ways that create value not only for existing users, but also expand their relevance and attract new buyers, while still aligning with what the brand stands for.
The challenge then is to identify something new in customer needs that allows a brand to expand its ability to differentiate itself. This is where consumer insight can be enormously valuable.
Successful innovation requires more than identifying an unmet need, it requires understanding all the ways in which the relationship between consumer and brand can be improved and then doing so in a way that takes advantage of the significant difference existing in the brand.
New sources of meaningful difference can be found anywhere in the brand experience, but to be successful, that means innovation must be connected to all other aspects of brand building – it can’t happen in isolation.
The most successful brands know what they stand for and their consumers know it too, and their innovation is based on those expectations. That is why consumer knowledge is so important for the innovation process.
Source: Drive brand growth with connected innovation. (n.d.).
https://www.kantar.com/inspiration/brands/drive-brand-growth-with-connected-innovation