Fake markets

Basically, innovations can do two things: they can decrease costs and they can add quality.

The most praised innovations are the latter ones. Those that bring new functions and features, that enable us to do things we never would have been able to do before. Like the Otto engine, the mobile phone or the airplane.

However today the most successful innovations seem to be the money-savers. Inditex, Walmart,  Ryan Air and IKEA all have used innovative thinking to save costs for them selves in order to sell their goods and services cheap to their customers and thus grow their market share.

Then perhaps it's not that strange that many businesses are inspired by these successful giants. "Special price" is the key to success! Unfortunately, what so often is forgotten is the fact that there is an innovation behind that ENABLES these companies to keep their low prices.

Especially this is true in the environmental industry. Innovations that add quality for the society are marketed as they were saving money for the producer. But they are not. Often the manufacturing costs are much highter than for the current alternatives, which means you are selling products cheap while producing expensively. And those who are to blame are the politicians who seem to know little about marketing.

Just look at some Swedish examples:

- The goverment wants to cut sales tax on organic foods - despite the fact it's much more costly to produce it will sell for less. When it in fact adds quality.

- Ethanol is marketed on price - despite the fact it would be as expensive as gasoline if the two fuels would have been tax neutral, if not more expensive.

- Wood pellets burners are sold as a cheap heating solution - when it in fact is not if the same level of comfort should be maintained for the consumer, as compared with oil-heated systems.

All these products add quality to the consumers. Organic food are better for our health, ethanol adds better performance and may have better local availability and price stability than gasoline. And wood pellets is better for old houses, adds genuine heating comfort and also have much better price stability than oil and electricity.

Conclusion: Politicians are lousy marketers. And they create sales arguments that only excist in fake markets. You can't sell British Airways or SAS tickets the same way you sell Ryan Air tickets. Because they are produced differently. Very differently. This is true also for environemtal products. If you have something that is better than the current alternative, then market it that way. And if it's not cheaper. Then don't market it as it was.