Market-Driven Innovation: Defining Demand Drivers
Successful commercialization of a new innovation requires a good understanding of the demand drivers for change. Defining demand is the most difficult and misunderstood of all the marketing factors. Often, the marketer makes assumptions about the market’s eagerness and willingness to adopt the innovation based on their historical knowledge of the market and key customers.
Being market-driven offers a first clue into how potential customers will react to the innovation. However, that alone is insufficient. A deeper understanding of what drivers will cause or allow adoption of the proposed value proposition is also needed. Here are some of the most common market roadblocks:
- Lack of quantitative clarity on the market’s value for the new offering including the differences in value by the behavioral market segments. Knowledge is generally dated and limited in scope
- Limited understanding of the downstream values that may be affected by your customers’ adoptions. Your customers most likely know this much better than you, but generally don’t want you involved downstream
- Inability to find the sweet spot for pricing your new innovation. Most pricing research methods are inadequate in providing insights into comparative pricing
- Limited understanding of your customers’ existing demand drivers
Considering the fact that most successful innovations take place in those markets where you play today, having and using a robust toolset may be good early work to do while engaging in your innovation efforts.