Continual innovation needed to meet competition

Tan Thian Seng
Companies, especially motor vehicles and manufactured goods, make use of various strategies to meet the competition.
Tan Thian Seng

Dear editor,

I am writing after reading the article by Ding Yining (“Consumers may be drawn to anything new, but brands need to look beyond gimmickry,” July 4, Shanghai Daily).

In order to survive companies have to keep on generating new editions or products to keep up with the times. Gone are the days when buying a Ford it can be “any color as long as it is black,” a remark attributed to Henry Ford.

In today’s business environment, such an attitude would not be sustainable for a business as there are many competitors and these provide comparable, if not better, substitutes, to cope with customers’ preferences.

Companies, especially motor vehicles and manufactured goods, make use of various strategies to meet the competition. By continual innovation, present products are kept updated and current, through “product obsolescence.” Imagine when you buy a car now, and you think it is new. But in the design studios, new features are being incorporated into the present model so that in about three years, a new model would be launched.

Companies are constantly looking at the competition, to understand the trends in the market and whether present products are reaching the end of the product cycle. Take the case of audio tapes. When the cassette tapes were invented, the tape recorders had to be a different design and the take-up rate was tremendously popular. With the introduction of the CD, the cassette tape recorders neared the end of the products life cycle. Manufacturers then incorporated the machines having radio, cassette tape and CD features. This strategy is termed as “product modification.”

Then there are products that are introduced to complement present offerings. A global fast food chain sometimes add new offerings to test the market. If the new offer is popular, it generally is adopted as a permanent part of the menu. Of course, new menus are sometimes added for variety only.

I can recall two examples — samurai burger and Kampong burger. These are brought in periodically.

In fact, in the case of the fish menu, it was added because a franchisee in a predominantly Roman Catholic area experience difficulties with the takings, as meat is often abstained on Fridays. The franchisee invented a fish hamburger and sent it to the franchisor. It took the fast food chain some five years to experiment and develop that dish, using a particular type of fish.

It is unlikely that companies will resort to gimmicks to promote new products. There are serious reasons for the implementation of business strategy. Frequently, new products are “bundled” with another product in the companies’ stable to encourage trying and future adoption. Not all consumers are early adopters.

But not all innovative processes are suitable for adopting. Take the case of the conveyor belt system in Japanese restaurants for bringing food to the seated customers. Some years back, a dim sum restaurant opened using the same technology and it failed. The reason was Chinese food is best taken warm.

Back to the 1940s, when Ford cars were made, a Chinese immigrant in Singapore started a coffee and tea stall to survive. He also had toasted bread with butter and a local spread called “kaya” (made from eggs, sugar and coconut). When the second generation took over, he included local Malaysian favorites — “mee siam” and “mee rebus.” Today, he has added a steam bread with butter and kaya as one of the permanent offerings.

He is able to penetrate into foreign shores through franchises with this simple breakfast and tea time offerings. There are now a number of copycats.

To be sustainable and be ahead of the competition, companies need to innovate to meet the needs of the discerning buyers. In quality management a common dictum is “the pursuit of quality has no destination.”

Tan Thian Seng is a trainer, consultant and freelancer based in Singapore.

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