Chapter 2
Chapter 2
Chapter 2
Learning Outcomes
Example:
objective
– to increase firm’s revenue and the purposes of
marketing innovation are to fulfill customer needs, to
develop new markets, or to position the firm’s product
on the market.
all about how the new tools are used to get
messages out to the target market effectively.
This is to keep existing customers and at the
same time, attract new customers.
Incremental
– Incremental innovation improves on the design of the existing
components.
– These improvements are not radical changes to the components
but a gradual change.
– Most incremental innovations involve little technological change
rather than the creation of a totally new product.
– The product or services do not require much marketing effort
and has a lower failure risk.
– This type of innovation is the least likely to encounter consumer
resistance.
Discontinuous
– Discontinuous innovation requires a significant change in
consumer behaviour.
– Consumers may want to use new technology because it creates
substantial benefits.
– Discontinuous innovations are new products perceived by
customers to be radically new and also usually require extensive
technological breakthrough.
– Example: MP3 player; cassette tapes; LP records
Architectural
– Architectural innovation requires overall reconfiguration of the
design without changing the components.
– The changes are achieved in its design through the changes in
the underlying components and the ways those components
interact.
– The influence of architectural innovation is mostly on industry
competitors and technology users, where the influence is
widespread and complex.
– As an example, the transition of a bicycle from high-wheel to the
safety bicycle was an architectural innovation.
Systems
– Systems innovation could be viewed as massive kinds of
activities which require significant resources from many
disciplines.
– It causes complete changes in both social and technical
dimensions, as well as interrelations between the two
dimensions.
– Social dimensions include values, regulations and attitudes,
whereas technical dimensions are infrastructure, technology,
tools and production processes.
– For example, communication networks from fixed line to mobile
phone; satellite operations; and the World Wide Web.
Radical
– Covers both the newness and the level of change in the innovation.
– Impact the most in terms of product and service commercialization
that consists of significant technological contents.
– May offering wholly new customer benefits, provides significant
changes towards positive customer expectations.
– Example: the introduction of wireless telecommunication, where
product development requires new manufacturing and service
processes.
– This type of innovation requires newness in every facet of the
innovation.
Disruptive
– Disruptive innovation usually replaces an earlier technology.
– Usually, initial product/services introduced were inferior
compared to the existing product/services available in the
market, but simpler and convenient.
– Disruptive technologies usually are more flexible, cheaper and
applicable to bigger segments.
– Established and large companies are more accustomed to
sustaining innovations to meet the needs of high-end customers.
– These companies have to innovate, otherwise they leave the
door open for new entrants who will make advancements to their
products and ultimately compete for the high-end customers.
Examples
Copiers. Consider the enhancements to
copiers, from the slow single-page copier
to collators, staplers, size reduction and
expansion, and color copiers.
Example:
Examples
Nuclear magnetic resonance imaging (MRI
scanners)
Industrial robots