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2007 Edition

Vitale and Giglierano

Chapter 9Innovation, Branding, and Competitiveness

Prepared by John T. Drea, Western Illinois University

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Opportunity SeekingOpportunity Seeking

Taking Controlled Risks

Taking Controlled Risks

ProactivityProactivity

InnovationInnovation

An Entrepreneurial

Approach to Marketing Has

Four Key Dimensions

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Marketing Entrepreneurially

InnovationInnovationis the creation of something new and commercially useful.

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Marketing Entrepreneurially

InnovationInnovationis the creation of something new and commercially useful.

ProactivityProactivity

is doing something before others do it (taking the lead in a market or new development),

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Marketing Entrepreneurially

InnovationInnovationis the creation of something new and commercially useful.

ProactivityProactivity

is doing something before others do it (taking the lead in a market or new development).

ControlledRisk TakingControlled

Risk Taking

is knowing what the risks really are, taking moderate (survivable) risks, and controlling the amount of risk.

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Marketing Entrepreneurially

InnovationInnovationis the creation of something new and commercially useful.

ProactivityProactivity

is doing something before others do it (taking the lead in a market or new development).

ControlledRisk TakingControlled

Risk Taking

is knowing what the risks really are, taking moderate (survivable) risks, and controlling the amount of risk.

Opportunity SeekingOpportunity Seeking is seeking out commercially-viable ventures.

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Entrepreneurial Progression

Opportunity recognition Idea generation

Business idea development

Business planning

Obtaining resources

Experimentaland exploration

Launch

Feedback

Revise

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Interaction of Types of Innovation

Radicalinnovation

Incrementalinnovation

Sustaining innovation Disruptive innovation

Most common combinations of innovation types in shaded boxes

Increasing role of te

chnology

Increasing uncertainty

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Creating an Environment for Success in Innovation

A company must adopt a predisposition for trying new things. The company must accommodate and assist employees who innovate, even if they fail. Failure in innovation is still positive as long as

•something valuable is learned in the process, &•it does not kill the company.

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Incremental and Radical Innovations

IncrementalInnovations

RadicalInnovations

Take the existing product offering and make small-step improvements.

Producing large changes in the functions and

performance of an offering. This is sometimes called a

breakthrough innovation.

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Disruptive Innovations

Introducing offerings based on technology that is substantially different from the dominant technologies in the market.

1. It is difficult for market-share-focused organizations to pursue disruptive technologies.

2. Disruptive technology does not necessarily equal radical innovation.

3. A business that intends to redefine an industry usually needs disruptive innovation.

Key Points

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What Does Pursuing Disruptive Technologies Mean for Marketing?

1. Separate the project using disruptive innovation from the existing company with its established customers and business model.

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What Does Pursuing Disruptive Technologies Mean for Marketing?

1. Separate the project using disruptive innovation from the existing company with its established customers and business model.

2. Address the new business with a SBU appropriate in size for the small market size of the initial opportunity.

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What Does Pursuing Disruptive Technologies Mean for Marketing?

1. Separate the project using disruptive innovation from the existing company with its established customers and business model.

2. Address the new business with a SBU appropriate in size for the small market size of the initial opportunity.

3. Use an exploratory approach to find the right market and the right way to address the market.

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What Does Pursuing Disruptive Technologies Mean for Marketing?

1. Separate the project using disruptive innovation from the existing company with its established customers and business model.

2. Address the new business with a SBU appropriate in size for the small market size of the initial opportunity.

3. Use an exploratory approach to find the right market and the right way to address the market.

4. Use processes/decision-making rules appropriate tothe new business model.

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What Does Pursuing Disruptive Technologies Mean for Marketing?

1. Separate the project using disruptive innovation from the existing company with its established customers and business model.

2. Address the new business with a SBU appropriate in size for the small market size of the initial opportunity.

3. Use an exploratory approach to find the right market and the right way to address the market.

4. Use processes/decision-making rules appropriate tothe new business model.

5. Develop the markets that want the offering.

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Sustaining Innovations

Innovations that make somewhat predictable improvements to existing technologies.

Most innovations are sustaining innovations

1. Radical sustaining innovation: increases performance dramatically but in the same technology direction.

2. Incremental sustaining innovation: small changes along predictable vectors.

3. Customers can provide an idea of what they want and how it will be used.

4. The periodic marketing plan can be used as a framework for instituting innovation in the offering.

Key Points

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Practical Aspects of Accomplishing Innovation

Obtaining theRight KindsOf People

Impediments and Incentives

Directing theRight Activities

Match the team members to the type of innovation being pursued.

A current trend is the use of collaborators and partners in innovation efforts.

Holding managers accountable to justify projects without data, and over-punishing failure.

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Making a Manufacturer’s Brand a Standard

Here are some possibilities:

BeingFirst

with NewTechnology

Innovatingthe Need,

not theTechnology

Being Bestwith

Service

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Defending the Brand

Defending the Brand

Market upMarket up

Buildrelationships with mgmt. above the influencers

Buildrelationships

with technical and lab

personnel

Market Market downdown

Market sidewaysMarket sideways

Success w/ one customerleads to others.

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Creating Strong Brands

• Brand strength– Brand awareness

• Is mere name awareness (simple awareness) enough?

– Quality of the offering• It is perceived quality in the eyes of the

customer.

– Customer positive beliefs – the associations that are linked to the brand.

• Associations are based on perceptions and the management of perceptions