Competing Through Innovation - Marketing Strategy

Marketing Strategy
& Competitive Positioning

6th edition
Chapter 12
Competing Through
Innovation
Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Figure 12.1
Innovation strategy and new products
Industry Strategy
• Innovation predicting industry change – to
predict the direction * extent of change in an
industry. “seeing what’s next” (Google cloud)
• Developing new business models – no more
CD, digital download & streaming. 3 R –
revolution, reinvention and renewal
• Innovative company – key driver of growth –
evolution Google and GE (car)
• Radical innovation – incremental change to
products and services – way of approach
market, customer value Copyright © 2017, 2008, 2003 Pearson education, Inc. All Rights Reserved
Figure 12.2
Innovation drives strategy renewal and
reinvention
Source: Adapted from Nigel F. Piercy (2017).
• Disruptive innovation that changes the way an
industry operates; cannibalisation
• the resulting forces that drive successful
companies to compete with themselves;
• Value innovation – the companies that pioneer
change with increasingly perverse customers;
• Big ideas – nurturing the big ideas that will
change an industry; and,
• innovation networks – the shift in managing
innovation to open business models and
cross-boundary collaboration.
• Ex : Gamin and Tom tom
• Proactive cannibalization – compete and attack
sales of your products and services, retain
customers
• Value innovation – extending far beyond new
products and services incl : ideas, processes,
business practices and designs (settlers,
migrators – designs or functions, pioneers –
real value – sony, iphone, dyson)
• The perverse customer – rejects traditional
marketing messages – train policy, bin
collections, medicine, cigarettes, privacy
• Big ideas – iphone – touch screen, think big
• Innovative networks – nike = transmit data to
ipod 2006
• Globalisation and innovation
New Products
• Dinosaurs are products that have missed their
niche, the market has moved on and the
demand for them has passed
• Flamingos are products that are beautiful but
unsaleable.
• Ostrich products are blind to the future
• Pearls are the constant quest of effective new
product development
Figure 12.3
Accelerated diffusion of innovations
• Successful new products
• Case of business products
• New product failures – next slide
Figure 12.4
Some reasons for new product failures
Planning for New Products
• New product planning process – Next Slide
Figure 12.5
New product development stages and time lapse
Source: Adapted from Booz et al. (1982).
• Develop new products according to the
degree of newness to the company and to
customers
There are 6 categories of new products emerge
• Cost reductions, which provide similar
performance at lower cost.
• Repositionings, which are current products
targeted at new customer segments or new
markets.
Figure 12.6
New product innovation
3. Modifications, in the form of improvements or
revisions to existing products, which enhance
performance or perceived value and replace
existing products.
4 Extensions to existing product lines that
supplement a firm’s established product lines.
5 New product lines, which enable a company
to enter an established market for the first time,
such as Virgin’s financial services products.
6 New-to-the-world products, which create an
entirely new market.
Figure 12.7
Strategic role of new products
Figure 12.7
Mortality of new product ideas
Source: Wong (1993).
The new product development
process
• Idea generation – novel idea, do new things
and do things differently
• creativity and productive ideation,
• defining creativity – combining
• Aids to idea generation – some of the many
techniques that can help creative thinking
Table 12.1
Aids to thinking
Screening
• Systematic screening - assess the commercial
potential and technical (including production)
feasibility of the idea
• Initial screen - Screening can be conducted at
different levels of detail – next slide
• Formalised screening system - Potentially
viable ideas should be evaluated more
thoroughly for selection purposes
Figure 12.8
Initial screening of ideas
• Business analysis
• Product development
• Market testing
• Commercialisation
Organising for new product
development
• Barriers to innovation
• Blocks and bugs – perceptual, cultural,
environment, emotional, intellectual and
expressive
Figure 12.9
Barriers to innovation
Organisational support for innovation
Three conditions are required for a firm to innovate successfully:
•closeness to customers: managers must know
their customers and understand their needs and
requirements well;
•cross-functional communications: innovation in
most companies is about the flow of information
between key functions;
•multi-functional teamwork: successful product
innovations are almost invariably the result of
people in the firm working together in teams
rather than independently
Organisational alternatives
• Functional approach
• Taskforce
• A project team functional matrix
• Venture tems
• Spin outs
• Inside outside venture

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Marketing Strategy

& Competitive Positioning

Source: Adapted from Nigel F. Piercy (2017).

Source: Adapted from Booz et al. (1982).

Source: Wong (1993).

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