Survival of Business: Marketing and Innovation

As Milan Kundera once said, “business has only two functions: marketing and innovation.”

It may seem like another attempt to simplify the inner workings of a business for an audience which is, by and large, not comprised of people with any great knowledge of how business works, but on closer inspection, that one sentence does indeed contain all anybody needs to know about business.

As stated by The Economist, “corporate longevity is highly unusual”and therefore noticeable. There are many reasons for this, but one is the simple reason that the world changes. Businesses which don’t change along with the world around them do not last long – an explanation which quite handily encompasses both marketing and innovation.

Innovation – at least in the business sense –holds an unusual place in the life of a business. Most people assume that innovation means coming up with and then implementing something entirely new, and while it can mean that, it can also mean brainstorming entirely new ways to exploit the central theme of the business. This is the type of innovation that Google adheres to, with one exception, as reported by the list of most innovative companies of 2014 from Fast Company: endless repetitions on a singular theme – in this case electronics – to broaden the horizons and prospects of the company in general.

For every company that manages to innovate around its original reason for being, there are perhaps hundreds more which have to change (in other words, innovate as the general population understands it) to keep up with the times and remain in business. A prime example of this is the Fenno-Scandinavian business Stora.

Stora today is a company which handles paper, packaging and timber – but when it first came into existence, it handled copper mining in Sweden. This type of innovation is more dependent on marketing than the other form as used by Google, as it involves moving away from the original purpose of the business. While there are many different types of marketing – some of which I covered in earlier posts – the type of marketing which is normally associated with the innovation of Stora is known as growth marketing. Growth marketing, instead of simply bringing the company to the attention of the potential customer base, actively goes out to seek the customers and bring them on-board permanently.

This type of marketing is essential in the case of companies such as Stora because without it, the changes made – up to and including the merger – would not have been so successful. While innovations can be made without affecting the customer base, in the main it is most effective when people know about it, and can make choices based on that knowledge. It is one thing to know that Stora now handles packaging – it is quite another to know that they use biomaterial for this purpose.

In the words of Forbes, the “marketing team is on the front lines of what’s working, what’s not and what’s needed” – so marketing and innovation are uniquely linked, almost forming a complete circle of events as it can be very difficult to tell which one begins the process of change in a company – was it the innovation which began first, leading to a need for new marketing strategies – or the marketing strategies themselves which saw the need for new innovation?