the new hr

One exemplar for
successful innovation
based on customer
needs and perceptions
is in the arena of
rural marketing.
ABOUT THE AUTHOR
Dr Rangapriya
(Priya) Kannan-
Narasimhan
teaches Strategic
Management
and New Product
Development at
the University of
San Diego.
not meet their expectations,
they do not hide their
disappointment. Companies
are realising that traditional
methods of innovation such as
developing new product ideas
in-house, conducting focus
groups, and customer research
to determine feasibility
and market potential does not always accurately
reflect customer’s actual needs and desires. To
address this issue, firms are increasingly placing
customers at the heart of their innovation efforts.
Businesses are attempting to connect with them
and seeking their inputs earlier in the new product
development lifecycle.
The importance of incorporating the voice
of the customer has been well documented
in marketing literature at least since the early
1990s. Traditionally, voice of customer analysis
was based on identifying customer needs,
structuring and prioritising them, and finally
comparing perceptions—figuring out how
well the organisation’s current products and
services fulfil customer needs. One exemplar for
successful innovation based on customer needs
and perceptions is in the arena of rural marketing.
Companies took the affordability constraints of
© Bloomua / Shutterstock.com
rural customers into consideration and began
introducing their products in mini sachets, costing
R1 or R2, replacing the more expensive standard
packages of 50 ml or 100 ml. Although sachet
marketing started with shampoos such as Sunsilk
and Chik, today many products are available at
nominal prices varying between R1 and R5.
These include products such as instant coffee, tea,
beverage, chocolates, snacks, noodles, soaps, and
detergents. Although affordability was the initial
driving factor for sachet marketing, it addressed
several issues beyond affordability such as single
use travel pack, economy, convenience, and ease
of handling.
The rise of internet use in the late 1990s and
early 2000s facilitated customers and manufacturers
engaging in active and explicit dialogues, ushering
in the next wave of how the voice of customer was
heard 1 . This trend continues today where businesses
are increasingly moving towards incorporating
customer feedback as they design the customer
experience. While the traditional practice was
for firms to take the lead and ask customers for
information on what they desired, the roles flipped.
They could now initiate the dialogue with the
firms and co-create the product or service with
the producers. Technology such as social media
enables consumer feedback to be heard at earlier
stages—idea generation and design—rather than at
later stages such as product testing. Organisations
can now develop new products and services more
quickly and cost-effectively, while minimising the
risk of underperformance or failure.
Firms in some industries such as software and
technology have been more successful than others
in co-creating with customers. For example, Gmail
was in beta testing for five years, giving it adequate
time to co-create the product with its users.
Microsoft is now working on a standalone Skype
messaging app for India—the app is optimised for
2G and 3G networks. Taking bandwidth issues in
India into consideration, this app allows customers
to make video and voice calls on slower networks.
Another example is the tag line for Philips,
‘Innovation and You,’ involving customer feedback
72 INDIAN MANAGEMENT NOVEMBER 2015