2. What is innovation?
Innovation is the introduction of new ideas,
goods, services, and practices which are
intended to be useful (though a number of
unsuccessful innovations can be found
throughout history). The main driver for
innovation is often the courage and energy
to better the world. An essential element
for innovation is its application in a
commercially successful way. Innovation
has punctuated and changed human history
(consider the development of electricity,
steam engines, motor vehicles, etc).
3. Types of Innovation
In business and economics, innovation is often divided into five
types:
1. Product innovation, which involves the introduction of a new good
or service that is substantially improved. This might include
improvements in functional characteristics, technical abilities, ease
of use, or any other dimension.
2. Process innovation involves the implementation of a new or
significantly improved production or delivery method.
3. Marketing innovation is the development of new marketing
methods with improvement in product design or packaging,
product promotion or pricing.
4. Organizational innovation (also referred to as social innovation)
involves the creation of new organizations, business practices,
ways of running organizations or new organizational behavior.
5. Business Model innovation involves changing the way business is
done in terms of capturing value e.g. Compaq vs. Dell.
4. Adaption and innovation
An important first step in adapting a product to a
market is to determine the degree of newness as
perceived by the intended market. How people
react to newness and how new a product is to a
market must be understood.
. Products new to a social system are innovations
and knowledge about the diffusion of innovation
is helpful in developing a successful product
strategy.For example - Sony’s marketing
strategies for the US introduction of its PlayStation
2 were well informed by its wild successes
achieved six months earlier during the product’s
introduction in Japan.
5. Some are quick in trying out the product
and even in adopting it as a regular item of
consumption. Some others take more time
to embrace the product. Some others
hesitate for a longer time and yet others
are willing to try it at all. The differing
speed in adoption by consumers is one of
the most crucial issues in new product
marketing .
The job of the marketer is to locate and
identify this group and target the new
product at them initially.
6. HOW MACDONALD'S WINS
THROUGH ADAPTATION AND
INNOVATION
How the company does it?
By adaptation and innovation, coming up with
innovative products and services to address the needs
of a diverse consumer market—as shaped by
demographic, economic and local factors McDonald’s
rode the baby-boomer trend in the 1960s, the
swelling ranks of teenagers and the rising female
labor force participation, supplying a fast and
inexpensive menu. In the 1970s and the 1980s,
McDonald’s rode the globalization trend by
transferring the American Way of Life to many
countries around the world. At the same time,
McDonald’s adapted to the social context of each
county by franchising to locals.
