New & Improved means Simpler & Cheaper: Emerging Markets and "Frugal Innovation"

For India, GE Healthcare produced a hand-held electrocardiogram (ECG) device with cutting-edge technology that is much smaller, much simpler, and less than half the cost of traditional ECG machines. Here's one of their launch videos:

GE's inexpensive pocket-sized ultrasound device, designed for the Chinese market, turns out to have broad global appeal. Tata Motors in India has produced the Nano, a $2,200 car, which has stimulated "cheap car" development in the U.S. and many other markets.

There are numerous examples of high quality products and services produced and sold in India, China, and other countries at far lower cost than in the West. Emerging markets (formerly known as developing countries) invite us to make do with less. That leads to frugal/disruptive innovation.

I believe these five principles are key to creating a frugal innovation mindset and successfully innovating: 1) Start with a blank slate - zero-based thinking, not with the deductive approach of simply stripping away features from the existing expensive product. 2) Think of the end user customer as different, not deficient. Don't compare with the stereotypical Western lifestyle. 3) Don't overgeneralize and assume all people in an emerging market are the same. Segmentation principles apply as they do anywhere else. 4) Proactively consider and take advantage of the numerous brand enhancement and cause marketing opportunities. 5) Think simple, which means less is more. What's the minimum feature set your customer needs?

Don't be surprised when your simpler cheaper product has greater appeal than your traditional product in developed markets too. In fact, plan on it.

Marketing Benefits That Matter: Orville Redenbacher's Tea Party Ad

TV ads for Orville Redenbacher's are popping up (pun intended!) on the Olympics. Many of the ads promise not good popcorn as the benefit of the gourmet popcorn, but bringing people together. Check out this "tea party" ad:

The ad closes saying: "Spending time together. That's the power of Orville Redenbacher's." When product ads connect through deeper shared experiences, they hit home. We don't just think about it, we feel it. And we all know that feelings and emotion is what drives most purchases, right?

Global Marketing Strategy

I just finished teaching a Global Marketing Strategy seminar to a great group of working professionals at University of San Diego.

The key theme was customer intimacy. Three things stand out for me: 1) How much I learn when I teach. 2) How the idea of customer intimacy resonates with people on a gut level, I believe because it is a fundamental human need to be heard, to be connected, and to matter. Which is what customer intimacy is all about. 3) How, when going global, the strategic decision about standardization (the same in every country - think McDonalds) vs. customization (think Four Seasons - you know what country you're in by just looking around your hotel room) is so foundational to corporate philosophy, product positioning, and success.

And there is a parallel in our everyday lives. How do we adapt to a different environment  or culture? Do we stay the same or change? My belief is that like companies, we as individuals need to be clear about our principles that are unchanging and those we can flex. And to know which are which.