Chapter 8: Product Innovation and Development Strategies
Transcript Chapter 8: Product Innovation and Development Strategies
Chapter 8: Product Innovation
and Development Strategies
1. Overview and Strategy Blueprint
2. Marketing Strategy: Analysis &
C. WHERE DO WE WANT TO BE?
B. WHERE ARE WE NOW?
3. Environmental & Internal Analysis:
Market Information & Intelligence
4. Strategic Marketing Decisions,
Choices & Mistakes
5. Segmentation, Targeting
& Positioning Strategies
6. Branding Strategies
7. Relational & Sustainability
D. HOW WILL WE GET THERE?
E. DID WE GET THERE?
14. Strategy Implementation, Control
8. Product Innovation & Development
9. Service Marketing Strategies
10. Pricing & Distribution
11. Marketing Communications
12. E-Marketing Strategies
13. Social and Ethical Strategies
Examine the role of innovation and product
development in marketing strategy.
Review the range of innovation and product
Assess the two main adoption theories and their
implications for marketing strategy.
Examine the main options for market and innovation
Chapter at a Glance
WHAT IS INNOVATION?
DISRUPTIVE BUSINESS MODELS
HORIZONS OF GROWTH
Introduction: Theodore Levitt
“A powerful force drives the world towards a
converging commonality, and that force is
technology...The result is a new commercial
reality - the emergence of global markets for
standardized products on a previously
unimagined scale of magnitude.”
Scope of Disruption
Different Kinds of Innovation
Additions to existing lines
New product lines
(Booz, Allen & Hamilton, 1982)
1. Generation of ideas
•Makes sense when you
are faced with shrinking
The toolkit strategy
enables customers of
NPD companies to
undertake their own
•Need to go through lots
of iterations to develop a
•If an organisation uses
high quality computer
Systematic Inventive Thinking
Subtraction is about removing components or attributes
Multiplication involves adding elements like developing a double waste bin unit that
can be used for rubbish
Division is the breaking-down of an existing product or service into its component
parts such as the replacement of the integrated hi-fi into modular systems involving
speakers, amplifier, tuner, tape & CD
Task Unification concerns assigning a new task to the product or service such as
when Rubbermaid placed assembly instructions for storage cabinets on the packaging
rather than on a separate enclosed sheet
Attribute Dependency Change involves the relationship between the attributes
of a product or service & the attributes of the immediate environment as with the
development of male & female razors
(Goldenberg, Horowitz, Levav & Mazursky, HBR, 2003)
Phillips Consumer Electronics:
Remove local display & all the control buttons DVD player.
Use one button to control the most common functions.
Remaining operations moved to the graphical user interface, easily
accessible by one button on the remote control. The result was the
company's award-winning Slimline Q-series of DVD players.
• Envisioned numerous additional vials and then thought about ways they
might modify them.
– What about two vials at one- and two-degree angles that would help builders
laying floors with small slopes-for example, in a bathroom, so that water runs
toward a drain?
The level that emerged from this process, called TopGrade, now enjoys
strong worldwide sales.
Defrosting filament in a car windscreen.
• Assigned extra task of enhancing radio reception.
• Car manufacturers able to get rid of the separate radio antenna, long
an ugly appendage on the car's body.
Attribute Dependency Change
Standard pair of glasses
• No dependent relationship between the colour of the lens and external
• By creating a dependent relationship, you come up with a lens that changes
colour when exposed to sunlight, eliminating the need to buy a separate pair
of glasses for sunny days.
•Should the old
product be sold out
before introducing the
new or should they be
•If so, should they be
sold at different prices,
in different geographic
regions or different
(Billington, Lee and Tang, 1998)
Figure 8.6: Product Rollovers
Adoption Life Cycle
Adapted from Chasm Group
Stay with herd
Get ahead of herd
Techies Visionaries Pragmatists Conservatives
fix a broken business process
develop channel/operations infrastructure
get better value
Bowling Alley Strategy
Migrate into new applications, new segments
Business Bowling Alley Strategy (Invented!)
One of the key tactics in movement is the ‘puppy dog play.’
Keep a low profile until you are strong enough to fight
Define the Competitive Space
Establish the positioning of the product & keep it simple
Follow Through Fast
Maintain innovation with a focus on design, functionality
& low prices
(Yoffee & Kwak, 2002)
• There are a variety of tools for NPD.
• The chasm provides a new twist to product innovation
and development. Its main value is in filtering marketing
strategy through the Chasm framework.
• It helps identify which customers or markets are on the
different parts of the curve and how to market to them?
• It might change some of the mix strategies like pricing,
communications or services offered.