Seminario Internacional - Inovação e Marketing - Prof. Gilles Roehrich (UPMF) / Sustentare

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Marketing and innovation – A Classical view

Marketing and innovation – A Classical view

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  • 1. Marketing and innovation – A Classical view
  • 2. The Marketing Concept
    Marketing is a set of exchange processes developed to reach the objectives of the organization by the satisfaction of the needs of the other part of the exchange
    The Marketing Concept is the basic philosophy which underlies theses processes and insure their coherence
    2
  • 3. Marketing as exchange
    Objects of the exchange
    Customer
    Supplier
    Exchange context
    3
  • 4. Marketing Management
    Marketing Management refers to the first and still dominant conceptualization of Marketing
    It emerged in American universities in the 50-60’s,popularized by authors like Mac Carthy, Drucker or Kotler
    Subsequent research demonstrated that it was mainly influenced by B2C situations
    4
  • 5. Marketing Management path
    Discover the need
    Conceive a product to fulfill the need
    Test this product and improve it
    Sell the product
    5
  • 6. Marketing Management paradigm
    Segmentation – Targeting – Positioning
    Marketing Mix – Four P’s
    Planning process
    6
  • 7. Limits of the paradigm
    Mainlydependant on products
    Mainlyconcernedwith standard products
    Mainlyrelated to consumer markets
    7
  • 8. B2B marketing
    Inter-organizational exchange
    Two implementation
    Marketing Management approach
    Specific marketing due to a special relation with the customer
    Long term relationship
    Co-conception, cost sharing, etc.
    Network, ie the customer can be supplier
    8
  • 9. Service marketing
    A service is intangible, non storable, non standardized
    Customer takes part in the service production process
    Centrality of notions like « service quality », « trust » toward the provider or « loyalty »
    9
  • 10. From transaction to relation
    10
    Marketing
    Management
    B2B
    Marketing
    Service
    Marketing
    Transaction
    focused
    Importance of
    the relation
    Relationship
    Marketing
  • 11. Marketing evolution
    Sell the product
    Before Marketing
    Consumer Marketing
    Service and B2B
    Marketing
    High Technology
    Marketing
    Match the need
    Create a relation
    Create new needs
    11
  • 12. Conclusion
  • 13. What Marketing Is Supposed to Do …
    “ … create value for customers and prospects; for companies, channels and distributors; for shareholders; and for economies, societies and, yes, even governments and trading partners … “
    “If we start to think about marketing as value creation, it promotes a different mindset among those who practice it, manage it, approve it as an organizational activity and enjoy the benefits.”
    Source: Don E. Shultz, Marketing News (October 22, 2001), p. 8.
    13
  • 14. What Is the Role of Marketing in an Organization?
    Total Organization
    (Culture)
    To shape and maintain organization’s cultural beliefs and values about the necessity and importance of providing customers with satisfaction over the long-term
    Division (SBU)
    (Strategy)
    Defining the organization’s strategy for competing within a given market
    Operational
    (Tactical)
    Managing the daily specifics of the marketing mix and customer-reseller relationships
    Each level must provide continuity and be consistent with the others.
    14
  • 15. Integrated Marketing system
    15
  • 16. Basic marketing questions
    Are customer-oriented strategies adapted to changes in markets and buying behavior?
    Are customers involved earlier in the marketing process, leading to a better understanding of customers?
    What are your value-added marketing strategies: quality, service, and value?
    How effective are your internal marketing programs for employees?
    16
  • 17. -1-Innovation
    17
  • 18. Key Concepts
    Invention
    It is the birth of new ideas; itisan object, process, or technique which displays an element of novelty (Schumpeter, 1960) ; itisrelated to science and discovery
    Innovation
    It is the transformation and bundling of thoseideasintomarketableproducts and services; itisboth a process and a result
    New product / service
    It isjust the result of the innovation process
    18
  • 19. What is an innovation ?
    An innovation is something new
    19
  • 20. Classification of innovations
    20
  • 21. Henderson & Clark, 1990
    21
    21
  • 22. Chandy et Tellis (2000)
    22
    22
  • 23. Robertson (1967)
    Continuous Innovation : no impact (change) on consumer behavior
    Coca Cola Zero
    Semi continuous Innovation : a significant impact on consumer behavior
    electric car, mobile phone
    Discontinuous Innovation : a radical modification on consumer behavior
    Internet, JAT
    23
  • 24. Conclusion
    Two dimensions used :
    Technology
    Market
    3 types of classifications :
    Onlytechnology
    Onlymarket
    Both
    All try to explaindegrees of newness
    24
  • 25. What is newness ?
    25
  • 26. Newness
    Newnessis a collative property
    Whatmakes us perceivesomething to be new ?
    The heart of newness
    Change : as comparedwithwhatisknown
    Surprise : disconfirmation of a normal expectation
    Incongruence : surprise + inconsistency
    Feelings related to newness
    Uncertainty : whatdoesitmean ?
    Conflict : withstiredknowledges
    Complexity : hard to understand
    (Berlyne 1960)
    26
  • 27. Impact of newness
    Exploration
    Motivation
    Affect
    Arousal(OSL)
    Progressive
    process
    Curiosity
    Catégorization
    Analogylearning
    Cognitive facet
    Affective facet
    Something new
    27
  • 28. Newness and catégorization
    Catégorization
    Differencebetweentarget and new object
    Extreme
    moderate
    Assimilation
    Accomodation
    Re-Catégorization
    Step by stepprocess
    If impossible
    If impossible
    If
    impossible
    Expectations
    28
  • 29. Impact of newness on affect
    Hedonistic
    value
    Specific
    exploration
    Diversive
    exploration
    Fear
    Stimulus
    intensity
    OSL
    Avoidance
    29
  • 30. Newness and attractiveness
    Tryprobability
    Incremental
    Radical
    Degree of newness
    30
  • 31. Innovation - definition
    Characteristics
    Recency
    Change (difference, surprise, uncongruence)
    Operational definition :
    Any recent idea service or object that imply a change in representation, thinking, judgment and/or behavior and which evaluation is uncertain (risky)
    As a consequence, incremental innovation is an oxymoron
    31
  • 32. Innovation diffusion
    32
  • 33. Purchase of an innovation
    33
    Social context
    Individual
    Persu
    asion
    Knowledge
    Decision
    Imple
    mentation
    Confir
    mation
    Innovation
    Social context
  • 34. 34
    Innovation perception
    Relative advantage
    Compatibility
    Complexity
    Visibility
    Triability
    Perceivedrisk
  • 35. Innovator (B2C)
    Interestedintoproductcategory
    Highlyinnovative, i.e. attracted by newness
    Tend to be opinion leader
    Younger, higher revenues, urban
    Tend to consume a lot in the productcategory
    35
  • 36. « Lead user » (Von Hippel)
    A user « ahead »,
    High level of expertise
    Indentifies the lacks of existing solutions
    Able to adapt (tinker) existingproducts to hisownneeds
    Veryuseful to imagine new productideas
    Among first buyers
    36
  • 37. 37
    Categories of Adopters
    The
    Chasm
  • 38. CONCLUSION
    38
  • 39. Main words for innovation
    Change
    Risk
    Uncertainty
    New behaviors

    39
    Exactly what a company hates
  • 40. -2-
    Marketing New Product Development Process
  • 41. Stage-Gatemodel (Cooper, 2001)
    41
  • 42. New Product developmentProcess (Urban and Hauser, 1998)
    42
    Opportunityseeking
    Marketevaluation - Ideasgeneration
    Idea screening
    Idea validation
    Concept generation and testing
    Marketing Mix
    Product testing - Name, price, advertising, etc. testing -Test market
    New productlaunching
  • 43. Idea generation
    43
  • 44. Strategies for obtaining new-product ideas:
    Acquisition of companies, patents, licenses
    New product development, product improvements and modifications
    Idea Generation
    • Internal sources:
    • 45. Company employees at all levels (Teian method)
    • 46. Research and Development
    • 47. External sources:
    • 48. Clients/Users (Lead-Users, In-depth interviews, Ethnographic search)
    • 49. Competitors (Reverse engineering)
    • 50. Distributors
    • 51. Suppliers
    • 52. Outsourcing
    • 53. Patents and inventions - www.inpi.fr
    44
  • 54. Idea Screening
    Process used to spot good ideas and drop poor ones.
    Executives provide a description of the product along with estimates of market size, product price, development time and costs, manufacturing costs, and rate of return.
    Evaluated against a set of company criteria for new products.
    • Expected cash flows over time
    • 55. Potential profitability
    • 56. Returns on:
    Investment
    Equity
    Assets
    Sales
    Cost of capital
    Present value
    • Opportunity cost
    45
  • 57. Concept development and testing
    46
  • 58. Purpose
    Profile the intented market
    Current buying patterns
    Existing segments
    Customers view of available products
    Assess purchase intention and product positioning
    Trial and repeat purchase
    Brand loyalty
    Refine and improve the concept
    Overall
    Specific features and attributes
    47
  • 59. Main objectives
    Purchase intentions
    How to improve/enhance the basic concept
    Characteristics of potential buyers
    First elements of launching strategy
    Target
    Competitvepositionning
    48
  • 60. Research methods used
    May be qualitative or quantitative
    Qualitative techniques include:
    • In-depth interviews of individuals
    • 61. Focus groups
    • 62. Projective methods
    Quantitative techniques include:
    • Surveys using structured questionnaires
    • 63. Personally administered
    • 64. Administered by mail, phone or Internet questioning
    • 65. May focus on a single concept (monadic) or
    • 66. Invite comparisons between two or more concepts.
    49
  • 67. Method for concept testing
    Qualitative methods
    In depth interviews
    Focus groups
    Projective methods
    Quantitative methods
    Surveys
    Face to face questionnaires
    Small samples
    50
  • 68. Source : Mohr, Sengupta, Slater, 2005
    Marketing strategy and business analysis
    51
  • 69. Marketing Strategy Development
    Part One:
    Describes the target market, planned product positions, sales, market share, and profit goals.
    Part Two:
    Outlines the product’s planned price, distribution, and marketing budget.
    Part Three:
    Describes the long-run sales and profit goals, marketing mix strategy.
    52
  • 70. Business Analysis
    Involves a review of the sales, costs, and profit projections to assess fit with company objectives.
    If results are positive, project moves to the product development phase.
    53
  • 71. Source : Mohr, Sengupta, Slater, 2005
    Product development
    54
  • 72. Product Development
    Develop concept into physical product.
    Calls for large jump in investment.
    Prototypes are made.
    Prototype must have correct physical features and convey psychological characteristics.
    55
  • 73. Source : Mohr, Sengupta, Slater, 2005
    Test marketing and commercialisation
    56
  • 74. Test Marketing
    Product and program introduced in more realistic market setting.
    Not needed for all products.
    Can be expensive and time consuming, but better than making major marketing mistake.
    57
  • 75. Commercialization
    Must decide on timing (i.e., when to introduce the product).
    Must decide on where to introduce the product (e.g., single location, state, region, nationally, internationally).
    Must develop a market rollout plan.
    58
  • 76. Source : Mohr, Sengupta, Slater, 2005
    Conclusion
    59
  • 77. New-Product Failures
    Only 10% of new consumer products are still on the market and profitable after 3 years.
    Industrial products failure rate as high as 30%.
    Why do products fail?
    Overestimation of market size
    Design problems
    Incorrectly positioned, priced, or advertised
    Pushed despite poor marketing research findings
    Development costs
    Competition
    60
  • 78. What about this process
    A response to needs process
    Mainly transactional
    Mainly relates on customers evaluation of the innovation
    61