SOCIAL MEDIA BRANDING: HOW DID GENERAL ELECTRIC CREATE DIFFERENTIATED PRODUCTS BY REVERSE INNOVATION

Social Media Branding: How Did General Electric Create Differentiated Products By Reverse Innovation



General Electric has recently created a portable ultrasound X-ray machine through reverse innovation. The process is a benchmark for companies to follow in creating differentiated products in our social media era.

Reverse innovation is a process in which low-end products are created for an emerging market but are marketed in a richer, mature market, such as the U.S. Social media has created the structure for reverse innovation. Reverse innovation creates differentiated products in fast moving markets. If you have content of any kind, be it a song, a book, a video, a product, and it is digital, it can be placed on a social media platform. If this content is attractive, desired, wanted, or needed, social media platforms can quickly make content easily available to vast numbers of people. This makes for a fast, quickly evolving market.

Reverse innovation allows an organization to adjust and keep up to the speed of the market. Social media has created platforms in which ¼ of the entire world reside in one place. Social media is a content driven issue. The sheer size creates a fast-moving market. Because so many people are engaged with this product at once, the product evolves quickly. Social media is also virile---content in social media moves quickly---like a virus. Reed’s Law teaches that a network of just two quickly becomes 1,092. New media has created an explosion of products. Because of the sheer scale of the marketplace, branding, positioning, and differentiation are critical to marketing a product. People have to see your product as different, that it can perform acts that no other product that can. To have a brand, your product must be differentiated.

To be successful in social media marketing, a marketer must know their craft. Many marketing experts feel that positioning and differentiation are the same. I feel that in a world of social media platforms and a market place exploding with new products, positioning and differentiation are two different things. Simply, you position---place---one product against one another. Walking sneakers are not the same as basketball sneakers. Different products perform different things. An ultra-sound at a hospital is different than a small, portable ultra sound that is used at an accident scene. Simply, consumers have to see that your product is different if it is to be branded. This can be illustrated by observing how General Electric manufactured an x-ray machine targeted for the China and India market. This machine then took on a life of its own. As the market quickly evolved and changed, this machine became a highly successful and differentiated brand in General Electric’s domestic American market.

The C.E.O. of G.E., Jeffrey Immelt, was appointed in 2001. He realized that the domestic and global markets his company served were mature. He realized that the only way that he could create continued high revenue streams would be opening emerging markets.

These markets had limitations in terms of income and infrastructure. He commissioned a rigorous analysis that told him that if G.E. adjusted products to the limitations of the emerging markets, the emerging markets could create 2 to 3 times the growth that could be expected in mature markets. The company had a large brand in health care machine products, such as x-ray machines.

General Electric is a bench mark in how a company should use Reverse Innovation in creating differentiated products in our New Media age. First, General Electric listened to its customers. They learned what their customers needed in an x-ray machine. General Electric observed just how customers in this particular market actually used an x-ray machine. The brand and its customers engaged with each other. There was a meeting of the minds between American and local engineers to create a machine that met the needs of local patients.

This happened in 2002, before social media became an important issue----but there is an analogy for today. On a present day social media platform, the central idea is engagement. With today’s platforms, G. E, in 2002, could readily and quickly understood what the people really needed. The engineers could more easily have worked together to create the compromise machine that was developed. The "comment" section on a social media platform is critical. It is here that people are telling their brands what kinds of products they need and want. The platforms create the means by which products can be quickly marketed. The company developed a successful product for the emerging markets of 2002, but with today’s more mature social platforms, this market could have been developed a lot quicker.

In the emerging markets of China and India, the company realized that transportation to clinics and hospitals was a problem. Instead of the patients going to the machines, the machines had to go to the patients. The company developed a compact ultrasound x-ray machine which combined a regular laptop computer with sophisticated software, which was easily portable. This machine sold for less than 15% of the price for a high-end machine sold in the States. It created great profit for the company.

More importantly, the company discovered a new market for this machine in the United States. It created a highly differentiated product. A portable ultrasound is critical at an accident scene. The portability created a highly differentiated product. The technology advances in software are now making this product a significant, differentiated product for the domestic American market. Six years after their launch, portable ultrasounds are a $278 million global product for G.E. The market is growing at 50% to 60%.



Dean Hambleton

dnhambleton@gmail.com