Innovation

Topics
Innovation
Types of Innovation
Product Planning and Development Process
Innovation
Innovation
 Innovation refers to an individual or organization
creating new ideas, such as new products,
workplace processes and upgrading to existing
service or product. This is when you transform business operations
 Innovationis a product, service, business model
that's both novel and useful. Innovations don't
have to be major breakthroughs in technology or
new business models; they can be as simple as
upgrades to a company's customer service or
features added to an existing product.
 Thefirst companies adopting a four-day week working
schedule of only 4 days per week
 Work from Home
 Thefirst electric vehicles introduced in the car’s market

were also an innovation
 such as Uber
 developing a new marketing strategy that produces changes
in, for instance, the way a product is designed or packed,
or even other decisions regarding price or promotion.
Types of Innovation
There are three major types of innovation;
 Breakthrough innovation
 Technological innovation
 Ordinary innovation
Types of Innovation
Breakthrough innovation:
Breakthrough innovation fundamentally
changes the dynamics of a given industry
or market
 These extremely unique innovations often
establish the platform on which future
innovations in an area are developed.
For example: Ideas such as penicillin, the
steam engine, the computer, the airplane,
the automobile, the Internet , TV, telephone,
Types of Innovation
 Technological innovation:
 A technological innovation is a new or improved product or
process whose technological characteristics are significantly
different from before.
 They occur more frequently than breakthrough innovation but
not at the same level of scientific discovery and advancement.
 These are very meaningful innovations, as they do offer
advancements in the product/service/market area. As such,
they usually need to be protected through intellectual property
rights.
 The Laser, Smartphones, Self-driving cars, AI, Robotics, Solar
Energy And Battery Storage, Lightbulb
Types of Innovation
Ordinary innovation: an ordinary innovation
involves taking an existing part of the business
and introducing changes that increase
efficiency, reduce costs, increase sales or add
value significantly in another way.
 Ordinary innovation comes from market analysis and
they extend a technological innovation into a better
product or service or one that has different, usually
better market appeal.
 Amazon – changing retailing | Uber – changing the taxi business
Innovative products
 https://online.hbs.edu/blog/post/innovative-product-examples
Product Planning and Development Process
 Once ideas emerge, they need further development and
refinement.
 This refining process—the product planning and development process
—is divided into five major stages:
Idea stage,
concept stage,
product development stage,
test marketing stage, and
commercialization,
The commercialization or formal launch stage, starts the product life
cycle
 Stage 1: Idea Generation and Screening
 Internal idea sources: R & D (executives, engineers, scientists, salespeople)
 External idea sources: Customers, competitors, distributors, suppliers
Ideas generated are evaluated against some criteria and most ideas
are eliminated. The best idea is picked for further analysis.
 Stage 2: Concept Development and Testing

 Product concepts provide detailed versions of new product ideas.
 Concept tests ask target customer to evaluate product concepts.
 Stage 3: Marketing Strategy and Business Analysis
 The target market, product positioning, and sales, share, and profit
goals for the first few years. Long run Sales and Profit goals and
Marketing mix strategy (4Ps)
 Stage 4: Product Development
 Prototype (sample, model) development and testing
 Stage 5: Commercialization
 Officially launching product into the market.
Introduction stage of product life cycle

begins
Product Life Cycle (PLC)
PLC Definition:
 A productlife cycle is the length of time from a product first being
introduced to consumers until it is removed from the market.
PLC Stages:
Product development
Introduction
Growth
Maturity
Decline
Product Life-Cycle Stages:
Production Development Stage
 TheProduct development stage begins when the
company develops a new-product.
 Sales are zero
 Investment costs are high
 Profits are negative
Introduction Stage
In the Introduction stage:
 Low sales; High costs; Negative profits; Little competition
Marketing Strategies in Introduction stage:

 Product – Offer a basic product
 Price – Use cost-plus basis to set price
 Distribution – Build selective distribution
 Advertising – Build awareness among early adopters and dealers
 Sales Promotion – Heavy expenditures to create trial
Growth Stage
In the Growth stage:
 Rapidly rising sales; Costs per customer reduced; Rising profits; Growing
competition
Marketing Strategies in Growth stage:

 Product – Offer product extensions, service, warranty
 Price – Penetration pricing
 Distribution – Build intensive distribution
 Advertising – Build awareness and interest in the mass market
 Sales Promotion – Reduce expenditures to take advantage of consumer
demand
Maturity Stage
In the Maturity stage:
 Sales peak; Low cost per customer; High profits; Competition begins to
decline
Marketing Strategies in Maturity stage:

 Product – Diversify brand and models
 Price – Set to match or beat competition
 Distribution – Build more intensive distribution
 Advertising – Stress brand differences and benefits
 Sales Promotion – Increase to encourage brand switching
Decline Stage
In the Decline stage:
 Declining sales; Low cost per customer; Declining profits; Declining
competition
Marketing Strategies in Decline stage:

 Product – Phase out weak items
 Price – Cut price
 Distribution – Use selective distribution: phase out unprofitable outlets
 Advertising – Reduce to level needed to retain hard-core loyalists
 Sales Promotion – Reduce to minimal level

Innovation

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Topics

 Thefirst electric vehicles introduced in the car’s market

There are three major types of innovation;

 Stage 2: Concept Development and Testing

Introduction stage of product life cycle

Marketing Strategies in Introduction stage:

Marketing Strategies in Growth stage:

Marketing Strategies in Maturity stage:

Marketing Strategies in Decline stage:

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