Page 76 - MYM 2016

Marketing & Innovation in the 21st Century
renovation and innovation
‘Renovations’ are new products or services that result from solving customers’ conscious problems, while ‘innovations’ are new products, services or business models that result from solving customers’ unconscious problems through marketing.
For example, among solutions for the problem
of it being too hot inside a roo“m, there are two products at retailers or bookstores, but the business
innovations: the electric fan, which appeared a er the manual fan, and the air conditioner, which appeared a er that. Improvements in the function- ality of electric fans and
air conditioners – which
include timers, more accu-
rate control of air volume
and dehumidi cation – are
all renovations. Another
example of innovation is
the invention of motion
pictures a er static photo-
graphs, and the subsequent
development of the movies
shown at theaters and television in homes. But improvements such as Liquid Crystal Displays, 4K and 8K ultra-high-de nition televisions are all renovations. Most problem solutions in the 20th century were renovations.
from Product Solutions to business Model Solutions
In order to grow, companies repeat the cycle of renovation to innovation. In the 20th century, com- panies o en repeated the cycle in the same product
environment totally changed because of e-com- merce. E-commerce enables us to purchase products immediately which used to be available only at
certain retail locations or bookstores. is is a big innovation made possible by the Internet, which is not in the same industry as retail businesses or publishers.
At Nestlé Japan, one
of our innovations is the Nescafé Ambassador. We placed our co ee machines in o ces, and introduced
a system that enables customers to buy co ee via the Internet instead of the traditional way, at vend- ing machines or convenience stores. e so-called ‘Nescafé Ambassadors’ are o ce workers not asso- ciated with Nestlé. is is a completely new business model that changes the way we distribute and sell products. In addition, we introduced the humanoid robot, Pepper, to enhance the shopping experience for our consumers at the Point of Purchase. In the IoT age, we need solutions with business models that leverage the Internet and AI across industries, rather than solving problems with products alone.
76 | MINd YOUr MarkETING OCTOBEr 2016
need solutions with business models
that leverage ai and the internet across industries.
category. In the 21st century, the IoT age when things connect to other things, there will be no more traditional product categories or even indus- tries. When that happens, companies who used to solve problems only with products as in the 20th century will need to change their business models drastically for further growth. For example, in the past, retail businesses and publishers only sold their
in the iot age, we
Customers have many innovative ways to try NESCAFÉ products, from internet purchases to the NESCAFÉ kitchen car or at NESCAFÉ Harajuku, where customers can order through a tablet.