Manufacturers: Can Your Innovation Generate Profitability?

Manufacturers: Can Your Innovation Generate Profitability?

While the UK might not be the mass manufacturing powerhouse it once was, it still wields significant clout in manufacturing excellence.  Manufacturers in the UK are more specialised now, and successful exports depend much more on skilled craftsmanship than mass labour.

However, despite this, for many smaller, more agile manufacturers, success is still elusive. Jeremy Hacking of Finch Electronics thinks some of this is down to them failing to capitalise on innovation.

“While internationally there can be outside forces over which you have no control, there are certain things that can increase your odds of success,” Jeremy remarks.

 

Monetising Innovation

“Monetising innovation means recognising its intrinsic value,” Jeremy points out, “and failure to see potential can mean a product developer missing out.”

What can happen is that the developer undercharges for their product, and selling their business short.

As a specialist developer and manufacturer of bespoke electronic components and products, Jeremy recognises the risks, and the pitfalls, in bringing something new to market.

 

“There are situations where a developer over-engineers a product, not giving enough thought about what the customer wants, resulting in something that isn’t user-friendly, or is designed to solve a non-existent problem”

Jeremy Hacking, Finch Electronics

 

If the customer is not willing to pay for the product, the manufacturer ends up discounting it and losing money in the process.

“This way, you won’t cover your costs, and typically, you lay blame on the product when really it’s the process that’s at fault. The development of it was wrong from the start,” Jeremy observes.

 

“Design-by-committee can also stifle product development, if an established business hierarchy fails to see the potential in a product. Here the product becomes stuck at development stage and never gets out”

Jeremy Hacking, Finch Electronics

 

As Jeremy point out, “This comes from a failure to recognise that a target market does, in fact, exist for an innovative new product.”

 

Price and Culture

Pricing is another area where innovative products can fail. To get this right means understanding who the target customer is, and knowing what they are willing to pay for.

“It comes down to your research at product development stage,” Jeremy advises, “so you’re not trying to market something without a good idea of who you should be marketing it to.”

A further issue, when considering products for export, Jeremy explains, is to do with culture.

 

“Not all products, or in fact brands, are immediately exportable and certain global markets have firm ideas about what will and won’t work for their domestic customers”

Jeremy Hacking, Finch Electronics

 

Where export is possible, businesses need to maximise the cost-effectiveness of their products by focusing on the supply chain.

“Ultimately, a product must be conceptually sound from all aspects, including its marketing and pricing,” Jeremy concludes.

If you have got a product idea that you want to turn into reality and profitability, please call Finch Electronics on 01282 838 779 or visit finchelectronics.co.uk.