Frugal Innovation - the quietly growing trend

13th of March 2017 Article by Markus Asch
Frugal Innovation - the quietly growing trend

Markus Asch, vice chairman of the management board at cleaning solutions manufacturer Kärcher and president of EUnited Cleaning, writes his latest blog for ECJ. He takes a look at a trend that has been going relatively unnoticed in the cleaning sector.

Whereas digitisation, the Internet of Things and Connected Cleaning have been the subject of a great deal of discussion, there is another trend that has been growing quietly and relatively unnoticed.

In my opinion, it is going to have at least as great an influence on the cleaning sector. This trend is Frugal Innovation. To date, this concept has had to combat the prejudice that it is just about cheap products for price-sensitive markets in developing and emerging economies.

However, this view does not do justice to the idea behind the concept. Instead the discussion should focus on the question of how Frugal Innovation can usefully be incorporated into the development philosophy of high-quality suppliers.

As I see it, the key to this is to focus even more sharply on different customer needs - along the lines of 'must-have' instead of 'nice to have', depending on the region and market. This is because requirements in Europe are not the same as those in Asia, and in different target sectors they can vary within a country. A very clear illustration of this can be provided using specific examples.

In Europe the efficiency of work often plays a greater role because of the corresponding wage structures. Time-saving functions such as automatic tank cleaning on a scrubber dryer or the speed with which a different appliance can mounted and equipped on an implement carrier therefore gives the user a clear competitive advantage.

Where the cost of wages tends to be less important, it is possible to dispense with such functions. However the desire for quality in terms of a long service life and the ruggedness of the appliance is particularly great for such simplified products and they must also be exceptionally easy to repair and service.

Even this brief excursion into practical applications shows that the lower acquisition price for Frugal Innovation products is obtained through intelligent adaptation of the range of functions to what the customer requires. Another factor that reduces costs is the location of development, purchasing, manufacture and logistics.

Furthermore it is clear that products from the Frugal Innovation process will only ever be able to cover a certain part of the market.

Another correspondingly large group of customers has very high requirements with regard to efficient processes, ergonomics, employee protection or the digitisation mentioned initially. Quality manufacturers will respond to these markets with high-end products that are in a completely different price bracket.

To serve these two different worlds successfully, it is - in my opinion - very important to differentiate clearly and set out which product satisfies which requirements. But regardless of the segment in which one operates, prestigious suppliers will never deviate from their commitment to quality because this is what their brand name stands for.

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