Marketing & Innovation

trade & instauration Beca wasting disease the purpose of business is to create a customer, the business enterprise has twoand only twobasic functions merchandising and intention. Marketing and innovation produce results all the rest ar costs. Peter Drucker (The Father of Management Theory) INTRODUCTION Marketing is the activity, set of institutions, and offshootes for creating, communicating, de fuckring, and exever-changing offerings that have value for customers, clients, partners, and partnership at large. Ameri foot Marketing Association 2007) An innovation is the implementation of a unexampled or importantly improved overlap (good or service), or do, a saucily marketing method, or a new organizational method in business practices, workplace organization or external relations. (OECD 2005) Four types of innovations be terrific intersection innovations, process innovations, marketing innovations and organizational innovations. (OECD 2005) * A intersection (service) inn ovation is the introduction of a good or service that is new or significantly improved with respect to its characteristics or intended uses.This includes significant improvements in technical specifications, components and materials, incorporated software, user friendliness or other functional characteristics. * A process innovation is the implementation of a new or significantly improved produceion or delivery method. This includes significant changes in techniques, equipment and/or software. * An organizational innovation is the implementation of a new organizational method in the firms business practices, workplace organization or external relations. A marketing innovation is the implementation of a new marketing method involving significant changes in reaping design or packaging, product placement, product promotion or pricing. The OCEDs definition is too narrow it reduces the scope of marketing by separating between marketing, product innovation and delivery. If we mixed the two definition we can suggest that with a marketing lenses an innovation is the implementation of a new or significantly improved method, process or practices in creating, communicating, delivering, and xchanging offerings that have value for customers, clients, partners, and society at large * Innovation in marketing could be related to * The creation (Iphone), * The communication (Web2. 0), * The delivery (Internet), * Or exchanging (Michelin) * offerings that have value 2 chief(prenominal) objective Understanding and mastering the process from new approximations generation to new value offering for the stakeholders Degree of differenciation of consumer expectations Degree of improvement in technology modest High Low Continuous innovation(cordless phone) Market breakthroughts (parabolic skis) High Technology breakthroughts (passage from video players to DVD player) Radical innovation(cell phone) Innovation continuum Continuous innovation * Modification to an existing pr oduct that does not require a change in learning * Improvement of an existing product without major changes Dynamically Continuous Innovations * Modification to an existing product that requires a modest amount of learning or change in behavior to use it Discontinuous innovation (radical innovation) Major changes in the way we live * Product innovation which break the rules and the norms * New consumption behaviors and use * Technology Example Sharing documents on Internet, Downloading musics, E-business and virtual stores, Free software, Hybrid cars New product growing process 3 Phase 1 Idea Generation Sources of new ideas * Internal idea sources * Formal research and farmment * Intrapreneurial programmes * External idea sources * Customers * Pilot customers Pilot customers methodsThe estimated annual gross revenue of new products developed based on ideas generated by pilot customers are eight times higher than estimated sales of innovations developed from more traditional metho ds. Pilot Customer users Brainstorming Characteristics of brainstorming 1. Write a clear, foc utilise objective 2. Select participants for the team 3. Prepare for the school term 4. At the session Rules for brainstorming. Rules * A conversation at the same time * Be focused on the subject * Be visual (drawing) * Encourage loco ideas * The quantity is more important than the quality * Negative comments have to be avoided No interruptions from outside Role of the team leader * Contribute to, but not inhibit the flow of ideas * Dont be too controlling * Encourage participation from everyone * Introduce creative games * Call the time out to freshen and evaluate ideas that have been generated Method * Write a disposition of ideas (uses) * Classify ideas thanks to criteria * Find common points between application pseudo segments 4 Interviews need * Focus group / individual interviews Characteristics of focus group Group size 8 to 12 Group composition Homogeneous respon dents prescreened Physical setting Relaxed, unceremonial atmosphere Time duration 1 to 3 hours Recording Record all the discussion with sound an video Moderator Observational, interpersonal, communication skills * Individual interview typewrite of interview Required skills Structured interview Neutrality, no prompting, no improvisation Semi-structured interview Some probing, rapport with interviewee, understanding the aims of the project Open-ended interview or depth interview Flexibility, rapport with interviewee, active listening Focus group Facilitation skills, flexibility, ability to stand back from the discussion so that group dynamics can emerge Characteristics of semi-structured individual interviews Group size Face to face, one-one-one basis Interview structure Semi-structured, direct, personal interview. Use of an interview guide Physical setting Relaxed, knowledgeable atmosphere Time duration One hour Recording Use of audiocassettes and videot apes Moderator Observational, interpersonal, communication skills * 5 Focus on semi-structural individual interview Questioning elbow room * Open ended, non-directive * Little or no direction on how to answer * Relate to topic in own way * Use own style Probing for detail, depth, clarification Prompting encouraging respondent to answer * Non-verbal, repeating, rephrasing, summarising * Salespeople * run providers * Anyone with direct customer contact * Competitors Companies watch competitors ads and other communications (new-product pre-announcements) to get clues closely their new products * Distributors, suppliers and others Companies watch competitors ads and other communications (new-product pre-announcements) to get clues about their new products Example of Brainstorming anti-odor product First step write a list of uses * Dirty socks, Ashtrays, Changing rooms, Refrigerators, Elevators, Subway tunnels * Second step classify ideas * Development of a notation administra tion * A Possible today * B realizable soon * C difficult and risky * Criteria * Technicity faisability, cost, market accessibility, competitors, time of solution * Third step Find common points How customers can use the product loss from 80 ideas to 8 pseudo-market segments What is its added value? Deodorization public places Types of customers Chemicalplants Places fellowshiphold odors. Phase 2 Product development * Expand ideas into more complete product concepts * Describe features the product should have and benefits those features will provide * 6 Evaluate chance for success * Develop a marketing strategy that can be used to put out the product to the market place After more than a decade of development, Daimler begins to commercialize its experimental fuel-cell-powered- electric car Next step to develop this new product into alternative product concepts Concept 1 A moderately priced subcompact designed as a second family car to be used around town Concept 2 A medium-c ost sporty compact appealing to young people Concept 3 An inexpensive subcompact unripe car Concept 4 A high-end sport utility vehicle (SUV) appealing those who love the space Phase 3 Marketing strategy development * Develop a marketing strategy that can be used to introduce the product to the market place * Identify the target market * prognosticate its size * Determine how the product can be positioned * Plan pricing, distribution and promotion expenditures Phase 4 Technical development * The product moves into product develop RD or engineering develops the product concept into a physical product Look beyond simply creating products that satisfy consumers ineluctably and wants Companies work to fashion products that are both satisfying and easy to manufacture. Phase 5 Marketing Test * It lets the company test the product and its entire marketing programme positioning, advertising, distribution, pricing, branding and budget levels Phase 6 Commercialization Launch the product * Full scale production * Distribution * Advertising * Sales promotion * and more 7 INNOVATING BY SERVICESInnovation and Marketing Decision The customers values issue An economic opportunity exists for an innovation when a new value hint to customer is possible Agreeing the PSS statement (Product Service formation) What is important is not our offer but what our customers do with it, there are three kinds of value propositions for an innovation. Innovation and the first customers value proposition * Customer Values are embedded in a three stages consumption scenario. * These stages define three kinds of value. * Stage 1 Decision (potential value) * Stage 2 The exchange (value in exchange) Stage 3 usage (value in use) Innovation in potential value First innovative value proposition Innovation concerning the facilities The facilities include all company resources employees, know-how, technology, nominal goods and other facilities that must be accessible (before offer readying is feasible). Make perceptible the strength of a harbinger POTENTIAL harbor from facilities stage in an offer provision scenario, ex IBIS Hotel 8 POTENTIAL VALUE from facilities stage in a service provision scenario ex vending machine Innovation in value in exchange Second innovative value proposition Innovation concerning the transformation process This is the stage in which company resources are combined with other companies resources in order to transform them. Companies act as prime resources integrators and the innovation consists of new slipway of co-operating, collaborating, co-branding In this case, these values in exchange will have to be new values in use for the customers to be successful VALUE IN EXCHANGE from the exchange stage in an offer provision scenario ex Senseo, Nike+ iphone app This transformation stage can also exhibit innovation concerning CUSTOMER VALUE in EXCHANGE.Offer provision can include a transformation of customer resources in terms of persons (surger y, hair cuts), physical objects (e. g. car repairs), nominal good (e. g. investing banking, rights (e. g. lawyers.. ) and/or data (tax advisors) It contains elements which are either pre-prepared within producers facilities, or are co-produced by customer and provider during the integration and the transformation of customer resources. Innovation consists of changing the way of integrating the customers resources with those of the producers VALUE IN EXCHANGE. Innovation in producers-customers co-production ex WikipediaInnovation and the third Customers Value proposition. Innovation in customers value in use The usage stage exhibits CUSTOMER VALUE IN USE. Innovation consists of proposing to customer new values in use, perceived as new solutions. Ex Wii for the seniors Definition of servicization The key idea behind product service systems is that consumers do not specifically demand products, per se, but rather are seeking the utility these products and run provide. By using a serv ice to meet some needs rather than a physical object, more needs can be met with lower material and energy requirements. A product service system is a competitive system of products, services, supporting networks and infrastructure. The system includes product maintenance, parts recycling and eventual product replacement, which satisfy customer needs competitively and with lower environmental impact over the life cycle. A Product-Service System can be defined as the result of an innovation strategy, shifting the business focus from designing and selling physical products only, to selling a system of products and services which are jointly capable of fulfilling specific client demands. Meeting consumers needs with a mix of products and services is not a new concept. House rentals, hotels, taxis and restaurants are good examples based on economic interest. There are other new and innovative applications of product service systems that have developed as a response to make business more sustainable. The main difference between product service systems and the classic examples is that the preference of consumers is influenced by environmental, as head as economic interests.Source UNITED NATIONS ENVIRONMENT PROGRAMME DIVISION OF TECHNOLOGY, INDUSTRY AND ECONOMICS 10 Innovation by servicization an attractive way to Innovate on the markets Three ways to develop innovation by servicization 1- Product oriented services Provided to increase or optimize the product life cycle, these supplementary services are offered to guarantee functionality and durability of the product (e. g. maintenance and repair, upgrading and substitution services over a specified time period, advise and consultancy for use optimisation, etc. ). 2- engagement oriented servicesThe product is made available in a different form to the customer, is sometimes shared by number of users, but stays in ownership with the provider. It is the usage of the product rather than the product itself that is inv oiced, without transfer of ownership (e. g. car sharing or car pooling, tools location, financial leasing, etc. ). Ex http//www. lamachineduvoisin. fr/ 3- Result-oriented services (functional economy) Result-oriented services (or functional services) in this most accomplished form of servicization, the seller does not sell a product anymore to the customer, but the in demand(p) result rendered by the product.Rather than selling pesticides to farmers for example, the seller decides to offer a global service contract that guarantee a maximal acceptable loss on crops. A BM based on the sold products quantity A BM based on a service rate Sell a maximum loss rate on crops Firm in functional service is looking for less costly alternating solutions as the reintroduction of parasitics predatories or the mankind reoxygenation by earthworms or using R&D in biology, agronomy, entomology.. The competitiveness of the seller depends on its ability to optimise the PSS implemented to reach this g oal and to use the least possible resources and energy to reach the targeted acceptable loss. Such functional services are implemented with great success by companies such as Xerox (Xerox Global Services) or Michelin (Michelin Fleet Solutions) for example.