Innovation Strategy Management Lecture 8

Programme Part 1 – The basis of Innovation Part 1 – The basis of Innovation Part 2 – Innovation and New Product Development Part 2 – Innovation and New Product Development Part 3 – Innovation and Technology development Part 3 – Innovation and Technology development Part 4 – Innovation and Intellectual Property Part 4 – Innovation and Intellectual Property Part 5 – EU Green paper of Innovation Part 5 – EU Green paper of Innovation Part 6 – Innovation policies in different countries Part 6 – Innovation policies in different countries

Part 2 Innovation and New Product Development

Lecture 8: Product strategy II Brand strategy Brand strategy Market entry Market entry Marketing research Marketing research Lunch and continuing improvement Lunch and continuing improvement Withdrawing products Withdrawing products

Brand strategy Brand extensions Brand extensions expertise expertise prestige prestige access access

Market entry entry timing entry timing scale of entry scale of entry positioning decisions positioning decisions

In many cases, including Ampexs, the first mover content to have pioneered the technology, believing its breakthrough was enough to bring market leader-ship. Micro Instrumentation and Tele-metry Systems invented the PC in the mid-1970s, but ceded market leadership to latecomers (such as Apple Computer and IBM) that invested heavily to turn the PC into a mass-market product. In many cases, including Ampexs, the first mover content to have pioneered the technology, believing its breakthrough was enough to bring market leader-ship. Micro Instrumentation and Tele-metry Systems invented the PC in the mid-1970s, but ceded market leadership to latecomers (such as Apple Computer and IBM) that invested heavily to turn the PC into a mass-market product.

Marketing research Approaches: Approaches: descriptive descriptive exploratory exploratory causal causal

Descriptive: Descriptive: market characteristics: market characteristics: sizesize sharesshares profilesprofiles consumer evaluationsconsumer evaluations advertising mediasadvertising medias

Exploratory: Exploratory: define problems, issues define problems, issues no standardized proceduresno standardized procedures the aim is to obtain a new insightthe aim is to obtain a new insight

Causal: Causal: tries to explain relationships tries to explain relationships experiments can also be tried experiments can also be tried

Some research areas in managing the product portfolio Broad perspective Narrower perspective Present Reviews of present portfolio to identify strategic issues Market performance of existing products; customer and distributor acceptance and evaluation of those products Future Establishing the target shape of the overall product portfolio in the future Investigations of future market requirements; assessments of possible future market acceptance of existing and new product(s)

Concept testing During the concept development or idea- generation phase During the concept development or idea- generation phase discussions in focus groups discussions in focus groups essential is creativeness essential is creativeness It is a diagnostic tool It is a diagnostic tool

Product testing Consumer sample choice Consumer sample choice Single or comparative tests Single or comparative tests Questions asked Questions asked Test administration Test administration Test timing and location Test timing and location

Market testing Scales testing Scales testing Refining market plans Refining market plans Pilot run (a rehearsal) Pilot run (a rehearsal)

Limited testing can be instead of test marketing can be instead of test marketing 1. Penetration rate 2. Repeat rate 3. Buying rate index Brand share = 1. x 2. x 3. Brand share = 1. x 2. x 3.

Launch and continuing improvement Product platform evolution and brand extensions Product platform evolution and brand extensions Market evolution Market evolution Competitive evolution Competitive evolution

Withdrawing products poor sales poor sales manufacturing cost manufacturing cost decline in quality decline in quality exit costs exit costs