Please note! This essay has been submitted by a student.
On this international week, our class welcomed a visiting lecturer, Mr. Giannis Tsoulfas, coming from a partner university, Technological Education Institution of Sterea Ellada in Greece. In two these lectures, he introduced us the considerable topic of the innovation management, product enhancement. Indeed, the products are core values in certain business cases and play indispensable parts of improving the performance efficiencies of the firms.
As we have known, there are numerous types of the products needed taking into account and two major kinds are the tangible products and intangible ones, often called as services. For the customer segment, there is a wide range of the product models in different certain needs, while for the business situations, the products regularly involve many more abstract types needed for the business operations such as machinery equipment, production resources, supplementary material, etc. Continuously, he mentioned the widely-used tool to locate the products into the marketplace and this is also well-known for all of the business students, the 4P’s Marketing Mix. In brief, this marketing tool enables the entrepreneurs to clarify the core products which they would emphasize and develop so as to deliver to the markets, the appropriate prices they focus on targeting the suitable customer groups, the certain ideal marketplace to sell and satisfy the consumers’ needs and lastly, the advertising methods to reinforce the products’ brands and the suitable discount-price strategies to add more precious values to the customers. Then, the teacher also indicated another familiar marketing mix model called 4C’s (Consumer, Cost, Communication, Convenience) as well as a combination of two these models in the effort to obtain the certain successes of the service segment. To be specific, that is a model “3P’s + 3C’s” encompassing three major elements “People, Physical Evidence and Process” and the other three key factors “Competence, Comfort and Coordination”. Subsequently, he analyzed deeply the service model based on each certain trait.
First of all, intangibility is one of the most notable distinctive features of the service since the customers can not have physical senses and feelings of the products which they purchased. Secondly, as not being similar to the characteristics of the tangible products, the service is absolutely inseparable, it means that the service’s goal is to be simultaneously produced and used. Thus, it requires marketers to elaborate service designs in order to satisfy the customers’ needs promptly in their first consumption, determining the service efficiencies as well as whether those are successful in the markets. Thirdly, the service is perishable and can not be in storages for the following sales as, leading to various shortcomings while compared to the tangible products, which can be stored and consumed in several times. Last but not least, the services’ quality is determined based on a wide range of the involved factors. Meanwhile, the tangible products’ quality are based on discretionary criteria, on the other hand, the successes of the services’ quality is defined through the service performance and final deliverables to the end-customers, especially how they perceive those services. Subsequently, the teacher demonstrated that this was an emerging tendency of the good-service mix. For instance, production chains in many manufacturing factories, those require not only tangible objects but also the intangible ones such as technology instructions for adoptions, know-how, expertise, etc. Mr. Giannis Tsoulfas showed us a particular diagram of how the new product development.
According to the chart, as being similar to other development processes, the idea creation is the preliminary task and those will go through the inspections prior to conducting the business analysis. Continuously, the product-enhancement prototypes would be built up and afterwards, audited for ensuring the efficiencies before commercializing widely. Continuously, there were numerous levels of the products needed taking into considerations and each one represents for delivering the specific values to the certain customer groups. To be precise, first of all, “Core Benefit” is the main key elements which the customers aiming while making the product purchases. The “Basic Product” is the second item frame that consolidates the center advantage. Thirdly, the “Expected Product” is considered as the whole of all essential item highlights and traits that a client typically anticipates from it. Fourthly, the “Augmented Product” is the one that surpasses client’s desires and finally, the “Potential Product” is the item that fuses all the conceivable future growths and changes. These products will lead to hierarchical orders of the product needs within the customers’ segment.
There are five certain levels needed taking into account. First of all, the “Product need” is also known as the center need that underlies the presence of an item family. Secondly, the “Product class” is known as a gathering of items with practical lucidness. Thirdly, the “Product line” is a gathering of items with comparable capacity, sold to the equivalent client gatherings, promoted through same outlets, or fall inside given cost ranges. Fourthly, the “Product compose” is a gathering of things that offer one of a few conceivable types of the item. Eventually, the “Product item” is an unmistakable unit discernable by value, appearance, or a few other characteristic. Indeed, prior to the widespread use, those new products need to go through and overcome several customers’ assessments, this process includes five key steps. Firstly, the customers preliminarily take awareness of their needs as well as desirable products, which would satisfy those. Since, they continue seeking and catching insight understanding the products’ details. Then, based on those researches, the consumers have adequate information to assess and consider their choices. Apart from the information evaluation, the realistic inspections by the physical senses are also crucial prior to making the final decisions.
Referring to the teacher’ slide, presently, there are numerous social business groups on the race pursuing the innovation incorporations into their business operations and particularly, those are divided into five prime groups. First and foremost, the “Innovators”, with approximately 2. 5 percent of the total groups, are pioneers in the innovation developments. Secondly, the “Early Adopters”, with roughly 13. 5 percent of the entire involved elements, are the following individuals catching up with the increasing adoptions of the innovations due to a willingness to accept and encourage the new innovative perspectives. Thirdly, the “Early Majority” group, with around one-third of the total groups, have longer considerations to adopt new things than the previous individuals. Fourthly, the “Late Majority” segment, which accounts for about 34 percent of the groups, is one of the slowest runners in the innovation-adoption race due to lack of credibility. Finally, the “Laggards”, which constitute for roughly 16 percent, are the eventual factors desiring to adopt since they are still persistent with the traditional methods and pay less attention to the new ideas.
Then, the teacher went on analyzing the “BCG matrix”, which is quite unfamiliar and complicated but unique for all of us. Apparently, this is the powerful tool to assess the business situations in the marketplace based on the situational products, which are divided into four major quadrants in the analysis. At first, the “Question Marks” are the quadrant illustrating the products, which obtain the high growth rates in the market but the shares are still quite low. The next quadrant is the “Cash Cows”, which demonstrates the opposite situation that the shares of the products are relatively high, on the other hand, the market growth is relatively low. Two following quadrants, the “Stars” and the “Dogs” indicate a complete controversial. to be precise, the former indicates the certain products with both high shares and growth rates in the markets whilst, the latter’s products simultaneous get low situations in the markets’ shares and growth rates.
After analyzing briefly the BCG matrix, Mr. Giannis Tsouflas came to the end part by illustrating several kinds of innovation in which many current organizations have been developing and incorporating. Firstly, the first model is the “Incremental Innovation”, followed by the “Sustaining Innovation” and “ Disruptive Innovation” in increasing hierarchies. Specifically, the “Incremental Innovation” is the innovative approach with the slight improvements within the performances due to lack of investments towards the temporary enhancements as well as risk avoidance. Continuously, the “Sustaining Innovation” is the slightly higher level with the objective to spend many more resources in the innovative process. Finally, the “Disruptive Innovation” is the highest level emphasizing, being willing to sacrifice and spend a large number of the investments on the long-term basis so as to become game changers in the innovative race. Lastly, after the theoretical part, the teacher gave several examples of how countable organizations, presently, have been running on this race and seeking solutions constantly to improve their operations towards the outstanding positions in the marketplace. Those range from historical business cases in the past, for instance, when Mr. Karl Benz invented and established the first petroleum-based-engine car in 1885 until the currently well-known product case in Greece such as “Artisanal Soft Drinks”.
Throughout this lecture about the “New Product Development”, I cultivated numerous necessary lessons related to the innovation enhancement.