Environmental Marketing Reviewer • One recent research showed that almost 45% of
the ideas come from the employees.
Module 1:
Producing Value via Innovation
B. Product Innovation: Framework
The stage-gate process refers to a series of
activities involved in designing new products.
Stage-gate recognizes that firms engage in a number
of activities between idea conception and the market
launch of a product. These phases are
multifunctional and require interaction among
marketing, R&D, production, and other activities
internal and external to the firm.
- IDEA GENERATION
- Gate 1: Stage 1 Preliminary assessment
- Gate 2: Stage 2 Business case
- Gate 3: Stage 3 Development
- Gate 4: Stage 4 Testing and validation
- Gate 5: Stage 5 Product Launch
- Review
Each phase and stage of the development
framework is accompanied by a complementary
gate. Gates are the points in the development
process at which the firm evaluates the potential for
a product. The gates are predetermined and specify
must meet requirements of a project and should
meet requirements of a product.
C. Product Innovation: Idea Generation
Generation of an idea is the initial activity in the
new-product development process.
Who is the forefront of the new-product
development process?
• The stakeholders associated with an organization
are at the forefront of this phase of the new-product
development process.
• It is essential to treat stakeholders as partners
throughout product innovation.
Participation in product development should
therefore include employees, consumers, vendors,
government, nongovernment organizations, and
the general public.
1. Employees
• Companies can use the brain of their employees.
All level of employees from executive to top
management can be the great source of ideas.
• Offering employees incentives for their
participation
2. Consumers
• The most important sources to get new product
development ideas.
• The customer knows best what they need and what
they are Looking for.
• Recent studies have highlighted the importance of
focusing on lead users.
• These lead users are more knowledgeable and
experienced with consumer products than other
customers.
3. Vendors or companies who sell to your
company.
• Distributors works very closely with the market
and they know consumer problems and their need.
• Suppliers can also help with the information of the
market like a new concept, technique or materials.
• Competitors can give you the idea that which
thing you are missing or which thing they are
missing, you can decide then what things you need
to include in your new product.
4. Government at all levels from local operations
to multinational alliances is also a valuable
source of new ideas.
For example, the United States Department of
Commerce supports efforts to bring new technology
to market via the National Institute of Standards and
Technology (NIST). NIST promotes innovation in
the
5. Non-Government Organizations (NGOs)
Organizations such as McDonald s, IBM, and
Walmart have recognized that interaction with these
organizations can provide a wealth of information
that is relevant to the generation of new ideas.
Prior research suggests seven possible sources of
innovation that vary based on whether they are
associated with events occurring within or
outside of an industry.56L;
Internal events that yield innovation include:
•Unexpected occurrences
This are situations in which customers find novel
unanticipated uses for a product.
•Incongruities Benefits of Conducting Preliminary Assessment
This are situations in which there is an • To determine the market potential and size.
inconsistency concerning the prevailing logic in the • To assess the likelihood of marketplace acceptance
industry. of the product.
• To assess the manufacturing and development
•Process needs feasibility of a project
This are modifications in the operations of a product • To quantify the time and costs associated with
to enhance its performance. manufacturing the product.
• To build effective project teams at the beginning
•Market changes of the development process.
This are situations in which the nature of the
industry or market changes. Gate 2: Business case
E. Product Innovation: Business Case
External events refer to factors happening outside Preparation
of the industry that prompt innovation. These • The business case preparation phase is the last
include: stage in the process before substantial investment is
• Demographic changes made in product development.
Demographics is the study of vital statistics such as • It is essential for the firm to identify the
race, age, gender, and income. Changes in these attractiveness of the product associated with
factors within a population can have a dramatic manufacturing, marketing, legal, and financial
effect on innovations. constraints.

• Changes in perception SIX (6) CONSIDERATIONS BEFORE

This occur when consumers modify their opinions ADVANCING TO PRODUCT
about some factor in the marketplace. DEVELOPMENT:

• New knowledge 1.Product Competitive Advantage

This is the use of new technical, scientific, or social
information that can be instrumental in addressing a
market problem.
Gate 1: Preliminary assessment
D. Product Innovation Preliminary Assessment
PRELIMINARY - Initial or groundwork
ASSESSMENT: Evaluation or analysis - the first
stage of the new product development process.
• The value proposition for the new product must be
compelling and superior with respect to some facet
of the triple bottom line. This benefit should be
recognized and viewed as favorable by the
consumer. If the value proposition is based on
ecological merits, then the trade-offs associated
with this benefit should be greater than any
associated limitations with respect to the social and
economic benefits of the product.

WHAT HAPPEN ON THIS STAGE? 2.Strategic fit

Market Assessment / Market Research • It is essential that the new product be consistent
with the firm's business strategy.
THE FIVE BASIC MARKET ASSESSMENT
METHODS 3. Market attractiveness
• Surveys • The attractiveness of the market includes
- In-person consideration of the market size and growth
- Telephone potential.
- Mail
- Online 4. Core competencies relatedness
• Focus groups • New projects should reflect the core strengths in
• Personal interviews the firm.
• Observation
• Field trials 5. Technical feasibility
• The feasibility of the technology is addressed by
identifying the results to date of a technology and
the complexity of the technology associated with a
new product.
6. Financial risks and rewards
• The financial assessment should consider the level
of risk associated with a product as well as the
ability of the firm to address the risk. The
organization should also examine the financial
reward in terms of the net present value,
productivity index, and size of the financial
opportunity.
Gate 3: Development
F. Product Development
When a product concept successfully passes
through the third gate in the development process, it
then moves into product development.
It is essential to determine the extent to which
consumers understand, recognize, and value the
benefits derived from the product. On the
manufacturing side, the firm develops a product
prototype. In the process, the firm assesses the
technical feasibility of the new product.
At the close of this stage, the firm faces Gate 4 in
the development process. The criteria outlined in
Gate 3 are reviewed to evaluate the attractiveness of
the product. Although the evaluative criteria do not
change much from the previous gate, new
information concerning the marketplace
attractiveness and financial merits of the project are
incorporated into the decision calculus.
Gate 4: Testing and validation
G.Product Innovation
TEST MARKET AND VALIDATION
• Focuses on determining the level of interest and
acceptance among consumers.
• In this final stage before full market launch of the
product, the firm examines whether the product can
be manufactured and marketed in a profitable
manner.
TEST MARKET
• Implements a complete market strategy
• Assess whether the product should go into full
production
MARKET VALIDATION
• Process of determining if there's a need of your
product in your target market.
TWO MOST COMMON APPROACHES TO
MARKET VALIDATION:
• Interview people in the target market
• Send out surveys
Gate 5: Product Launch
H. PRODUCT INNOVATION: Full Production
and Follow Up
• At this stage, the following are being done:
• The staffs' commitment to resources Review of
operations
• Review of product development process
• Sustainability assessments associated with the
ecological and social returns of a project
I. Product Innovation: Process Innovation
The theory of inventive problem solving enables
firms to examine whether enhancements to one
process influence other outcomes associated with a
system.
Process innovation refers to a technical system that
generates value by transforming resources into
products. Several factors contribute to the desire to
develop uniform, standard processes. Standardized
processes enhance communication and information
systems operating across departments and firms.
Module 2:
Delivering Value via Sustainable Supply Cycle
Strategies
STARBUCKS
1. Shared Planet Program
a. Environmental commitment which
recognizes that conservation needs to occur
throughout the supply chain
b. Work in conjunction with Conservation
International for ten years to develop Coffee
and Farmer Equity (C.A.F.E.) practices
c. CAFÉ - 1. 24 comprehensive, measurable
standards designed to enable suppliers and
farmers to become sustainable sources of
coffee.
d. 2008, 77% - 295 million pounds of coffee
purchased from suppliers verified and
approved under C.A.F.E
e. Average cost of $1.49 per pound is 5%
above the average price for C grade Arabica

B. DIAGNOSING THE ELEMENTS OF
SUSTAINABLE SUPPLY CYCLES
1. Supply cycles
a. Organizations involved in making a
product available for sale
b. Functions performed by these
organizations.
2. Triple bottom line benefits associated with
economic, social, and financial performance
3. Three perspective on the delivery of value
a. Channel: a set of organizations involved in the
process of making a product available for
consumption
b. Logistics: the supply chain’s set of
organizations linked directly to the flow of products
and information from a source to the consumer
refers to the overall process of managing how
resources are acquired, stored, and transported to
their final destination.
a. Porter: value chain’s set of primary and
support activities performed by the firm to
serve as sources of competitive advantage
C. BENEFITS OF SUSTAINABLE SUPPLY
CYCLES
1. BETTER WORKING CONDITION
2. REDUCED TURNOVER
3. IMPROVED PRODUCT QUALITY
4. IMPROVE EFFICIENCY AND
PROFITABILITY
5. BETTER MANAGEMENT OF RISK
6. ENHANCED BRAND REPUTATION
7. STAKEHOLDER RETURNS INCREASED
D. SUSTAINABLE LOGISTICS
• Logistics
• Fleet Optimization
• Energy Efficiency
• Innovative Technology
• Inventory Management Software
• RFID or Radio Frequency Identification
• Global Positioning Systems (GPS)
• Packaging
• International Relationships
• Enhance Vehicle Performance
• Reduce Total Supply Cycle Cost
• Enhanced Customer Service
E. ISO 14000
1. Environmental management systems (EMS)
a. Set of regulations established to achieve
environmental goals
2. ISO
a. Family of standards applied across industries to
monitor and control interaction with the
environment
b. Two of the primary standards
1. ISO 14001: 2004
- Outlines the guidelines associated with the firm’s
approach to sustainability, and it provides a strategic
approach to the organization’s environmental policy
2. ISO 14004: 2004
- Provides guidelines on the elements of an EMS, its
implementation, and the principal issues involved
3. Benefits
a. Competitive advantage over other
firms in a market
b. Lower toxic emissions
c. Lowered resource usage
d. Higher energy savings
e. Lowered costs of waste disposal
f. Provide assurance to stakeholders
that the firm is committed to
sustainability
g. Provides a strong response to
customers and suppliers that place
environmental demands on the firm