Innovation-The Second Wave

As the year draws to an end, it just occurred to me that this is not just another holiday season but the end of a decade and what a decade it has been! Recession, terrorism, social networking, T-20, Global economy …. shook the foundations of the world that we were used to. These cataclysmic events that occurred in this decade made it the decade that truly changed the world.

Now that I think about it, every decade had an idea, a philosophy, a thought process, a laissez faire so to speak the defined the events and happenings in that period. The 50’s and early 60’s was characterized by the baby boomers , The late 60’s and Early 70’s saw the birth of flower power and the 80’s and 90’s was dominated by liberal and capitalistic ideologies. These seemingly irrelevant sub-cultures and idiosyncratic ways of life sometimes defined the entire future of an economy.

That brings me to this decade. One philosophy or a thought process that cut across all fields and that defined this decade was Innovation. Whatever happened in this decade was because of this one ideology. The decade of the grey caps. Some had their caps on right, others tried to pull a rabbit out of a cap and we all know the result. As this roller coaster ride of a decade comes to an end, a simple yet predominant question lingers …What Next?

Everything has alternative today and the rate of obsolence is almost at the same pace as innovation. If some how you manage to stay ahead of this vicious cycle, The Chinese will bring out a replica that costs half as much and does twice as much the original. This puts the so called innovators in a quandary. How do they keep up with the Joneses?

So far, Innovation as an ideology has been applied only to the product or the core element of business.

In the next decade, innovators have to shift from the product centric approach and take a wholistic approach in order to sustain this pace and take the pole position. They need to collaborate with the customer rather than just sell.

Apple Inc. is a good example of this wholistic approach of innovation. It is the only company that provides the entire package ,meaning the software, the hardware and all the other bells and whistles to its client along with product. In its I-phone, it has given the customer not a product but a platform with obscene amount of scalability. It is for this reason its products are considered superior and have been able to hold its own in the face of competition.

The critics might and in all possibility will disagree with me.. but hey! They are just doing their job.

The second wave of innovation has to be a collaborative effort rather than just a science project in a garage that hit the jackpot. Innovation should not limit itself to a product but rather spread across all other aspects of business.

Time for thinking out of the box is over. It's about time you ripped the box apart!

Luxury Brand Management.

Luxury… Everybody wants it.., Don’t they?.. Don’t you?. I know I do and I know you do too. That’s exactly why you and me are working our arse’s off in a B-school or where ever that is you are to make our future “Luxurious”. But ever stopped and pondered…what the definition of “Luxury” is?...... Drawing a blank ,aren’t you?. Exactly…The concept itself is subjective. what is luxury for some is just ordinary for others .

What was meant only for gods a couple of years ago have become easily attainable to the average Joe. A couple of decades ago, you had to be on the queen's dinner invitee’s list to buy a Rolls and today…… Your neighborhood billionaire has two. Adding to this, the economic crisis, it has become ethically more dubious ‘to like luxury’ or ‘to pursue luxury’. Given this situation , how do you manage luxury brand?

The answer is Aspiration and Association.

Every marketer worth his salt knows what is aspiration and what it can do to their brand. Luxury brands tend to enjoy a certain aspirational value. This is what puts them on a different level altogether. The trick here is to balance the aspiration and attainability. Like CEO of Lamborghini, Stephan winkleman said “ The key to staying ahead in Luxury market is to always produce less than demand”. That pretty much explains the limited production runs of most luxury car brands and their exorbitant prices.

The second most important thing for any luxury brand is association. Luxury comes from ‘lux’ which means light in Latin. This is a typical character of luxury . It should shine and shimmer. It has to be seen by the customer and more importantly the people he is trying to impress. That is why luxury brands flaunt their brand signature. These are made to perfection and standout in a mélange of other brands and products.

Luxury brands should and must represent a certain lifestyle. A life of leisure, free of all working, money, time or space obligations. These brands tend to associate themselves with Sports, events or celebrities that complement these characteristics. Like Rolex’s association with Golf or chanel’s association with Milan Fashion Week and Aston Martin’s association with James bond. Each of these associations is not a random marketing exercise but a carefully chosen image booster.

Association is not just limited to tangible entities. Some luxury brands have carved themselves a niche by associating themselves to certain virtues and emotions. Swiss watches embody precision engineering, Ferrari’s and Lamborghini’s stand for boundless passion, and any fashionista would swear by their French perfume.

The sum of all things is that people who buy luxury brands and products don’t just look for things like practicality or affordability and other things us lesser mortals worry about. What they want is character, individualism , personalization and snob value. It is not to say that they ignore the basics of any product such as quality etc. etc. Beyond all that, it has to play a classifying role which creates a restricted group that bond together and distinguishes itself from rest of the society.

Silence after the Storm..

Schumi is back in the driver’s seat, The dog in the Vodafone commercial is back, People have started drinking scotch instead of Rum. A sense of optimism has taken over the feeling of doom and despair we all were experiencing for while now. Things are definitely looking up.

Companies are slowly but surely wooing the b-school brigade again and with good reason. Most of the companies have posted profits this year. Mahindra &Mahindra posted a 152% increase in their profits. The Blue eyed boy of Indian economy (IT Industry) who was hit by the global epidemic and was bedridden for quite some time now is showing signs of recovery and progress.

So, why am I telling you things that you already know?

Everything looks hunky dory on the top but dig a little deeper and you will see the real story. Yes, The Company has posted a triple digit increase in profit percentage but how much of that actually translates to real money.

Let me make it simple. One of us has a CGPA of 1.6 till the last term. This term he gets a 3.0. It is a 100% increase in his Grades. But what will be his real CGPA at the end of this term?
I hope you get the point.

Naironomics says: Read between the lines, not just through them.