Marketing

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Marketing & Innovation

"Because the purpose of business is to create a customer, the business enterprise has two—and only two—basic functions: marketing and innovation. Marketing and innovation produce results; all the rest are costs." Peter Drucker (The Father of Management Theory)

INTRODUCTION

Marketing is the activity, set of institutions, and processes for creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society at large. (American Marketing Association 2007) An innovation is the implementation of a new or significantly improved product (good or service), or process, a new marketing method, or a new organizational method in business practices, workplace organization or external relations. (OECD 2005) Four types of innovations are distinguished: product innovations, process innovations, marketing innovations and organizational innovations. (OECD 2005) * A product (service) innovation 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 production 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 firm’s business practices, workplace organization or external relations. * A marketing innovation is the implementation of a new marketing method involving significant changes in product design or packaging, product placement, product promotion or pricing. The OCED’s 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 propose 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 exchanging 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
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Main objective:
Understanding and mastering the process from new ideas generation to new value offering for the stakeholders

Degree of differenciation of consumer expectations| Degree of improvement in technology | | Low | 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 product 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 development process

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Phase 1: Idea Generation
Sources of new ideas
* Internal idea sources:
* Formal research and development
* “Intrapreneurial” programmes

* External idea sources:
* Customers
* Pilot customers :
Pilot customers methods
The...
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