Edition Vitale and Giglierano Chapter 9 Innovation, Branding, and Competitiveness Prepared by John T. Drea, Western Illinois University

2 Opportunity Seeking Taking Controlled Risks Taking Controlled Risks Proactivity Innovation An Entrepreneurial Approach to Marketing Has Four Key Dimensions

3 Marketing Entrepreneurially Innovation is the creation of something new and commercially useful.

4 Marketing Entrepreneurially Innovation is the creation of something new and commercially useful. Proactivity is doing something before others do it (taking the lead in a market or new development),

5 Marketing Entrepreneurially Innovation is the creation of something new and commercially useful. Proactivity is doing something before others do it (taking the lead in a market or new development). Controlled Risk Taking Controlled Risk Taking is knowing what the risks really are, taking moderate (survivable) risks, and controlling the amount of risk.

6 Marketing Entrepreneurially Innovation is the creation of something new and commercially useful. Proactivity is doing something before others do it (taking the lead in a market or new development). Controlled Risk Taking Controlled Risk Taking is knowing what the risks really are, taking moderate (survivable) risks, and controlling the amount of risk. Opportunity Seeking is seeking out commercially- viable ventures.

7 Entrepreneurial Progression Opportunity recognitionIdea generation Business idea development Business planning Obtaining resources Experimental and exploration Launch Feedback Revise

8 Interaction of Types of Innovation Radical innovation Incremental innovation Sustaining innovationDisruptive innovation Most common combinations of innovation types in shaded boxes Increasing role of technology Increasing uncertainty

9 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.

10 Incremental and Radical Innovations Incremental Innovations Radical Innovations 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.

11 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

12 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.

13 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.

14 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.

15 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 to the new business model.

16 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 to the new business model. 5.Develop the markets that want the offering.

17 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

18 Practical Aspects of Accomplishing Innovation Obtaining the Right Kinds Of People Impediments and Incentives Directing the Right 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.

19 Making a Manufacturer’s Brand a Standard Here are some possibilities: Being First with New Technology Innovating the Need, not the Technology Being Best with Service

20 Defending the Brand Market up Build relationships with mgmt. above the influencers Build relationships with technical and lab personnel Market down Market sideways Success w/ one customer leads to others.

21 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