PRODUCTS – INNOVATION
MARKETING 360
Brian Gillespie
Innovation
Something perceived by consumers to be new or
different

Typically purchased by a few, then spreads through
population


Diffusion of Innovation
Poor Innovations
Types of Innovation



Continuous Innovation
Dynamically Continuous Innovation
Discontinuous Innovation
Continuous Innovation

Modify existing product to set it apart

No new learning or behavior modification needed
Knockoff products


Copies existing product with a few changes
Dynamically Continuous Innovation
Pronounced modification to an existing product

Moderate learning or behavior modification
needed

Convergence products


When two technologies come together to create more than the
sum of its parts
Discontinuous Innovation

New product that changes the way we live

Major learning or behavior modification needed
What Type of Innovation is This?
What Type of Innovation is This?
http://www.cb.wsu.edu/~bgillespie/InnovationExamples.htm
Product Development
Idea Generation


How can we meet unmet needs?
Product Development


Develop initial product concept so it can be focus grouped

Evaluate technical feasibility

Rough estimate of market sales potential
Develop Marketing Strategy


Including choosing the product name and slogan

Develop 4p’s

Do more market research
Product Development
Business Analysis


Full-scale assessment of viability and potential demand by financiers

Further analyze competing offerings

Identify differential benefit

Will product fit in product line or cannibalize existing product
offerings?
Product Development
Technical Development


Refine the product using prototypes, focus groups and market
research with intended target markets

Streamline/simplify manufacturing

Create the distribution plan for each channel to the consumer
Product Development
Test Market the product in Limited Markets


Try out distribution, advertising, in-store displays and promotions, in
sample test markets (e.g. Spokane, San Diego, Denver)

Can be very expensive

Gives your competitors a “sneak-peak” at your new product
Test Marketing

Where should these product be test marketed?
Product Development
Commercialization


Full scale roll-out

Launch the new product into full production, incent retailers, pay
slotting fees
Diffusion

Process in which a product spreads through a
population
 Diffusion
can also be social in nature
 Importance
of boiling water before consumption in third
world countries
 Importance of birth control in teens and adolescents
Consumer Adoption Stages

From being unaware to becoming loyal consumers
 Consumers
“drop out” at each stage
Diffusion of Innovation
Indicates societal
acceptance of
product
Adopt when little/no
risk, when necessary,
or due to social
pressure
The same consumer
can be at different
levels – for different
product categories
Factors that Affect Adoption Rates
Relative advantage

Perceived differential benefit

Compatibility

does it fit in with target markets’ lifestyle and related products?


Blue ray players play DVDs
Complexity/Ease of Use


Hard to use = 
Trialability


Can you try before buying it?
Observability


Will referents observe you using the product?

Will you score status points?
Perceived Risk


possibility of losses