Marketing Strategy (3) Strategic Management of innovations

Question 1

The strategic imperative: COmpanies need to innovate because

Innovation management is important because

Answer 1

• product-life cyces become shorter
• Innovation is considered to be one of the top-three priorities for a large majority of companies
• (radical) innovations can disrupt whole markets and create new ones
• next to the economic relevance, innovations can deliver social and ecological value
  the mpst innovative companies are not the top R&D spenders

–>Ultimately innovation can be source of sustainable competitive advantage

Question 2

Distinguishing typs of innovations based on degrees of newness

Answer 2

Question 3

The Innovation ambition matrixS

Answer 3

Question 4

Advantages and sidadvantages of developing and launching transformatrional innovations

Answer 4

Potential advantages:
- higher levels of awareness
- price leadership
learning effects
pioneers sets standards

Potential disadvantages:

• Many new products fail
• Risk
• Capital investment, R&D

Question 5

Importance of pre-marketing prior to launch (three step pre-marketing program)

Answer 5

Question 6

Step 1: Internal commercialization

Answer 6

Internal commercialization is targeted at the mangement and employees involved in organizing and facilitating market launch in order to establish awareness and education of employees about the innovation.

Question 7

Step 2: Preannounce prior launch

Answer 7

Def: Preannouncement is a formal, deliberate communication prior to a new product´s market launch to customers, distributors, and other stakeholders.

Implications
Benefits:
- competitive preemption
Demand stimulation
Distributor suport
Company reputation

Risk:

• Competitive cuing (revealing intentions prematurelty)
• product line cannibalization
• Company reputation
• Antitrust (collusion or predatory behavior)

Question 8

Step 3: Develop lead customers

Answer 8

Def. Companies often target lead customers (mostly industry leaders in their industry) when launching innovations. Lead customers are able to influence other customers to buy (signaling effect).

Question 9

Adoption and diffusion of innovations: Adoption

Answer 9

Adoption is the decision of an individdual to buy and make full use of an innovation. The adoption decision is influenced by the characteristics of the innovation, the adopter, and the environment

Question 10

Adoption and diffusion of innovations: Diffusion

Answer 10

Diffusion is the process by which an innovation is communicated through certain channels over time among the participants of a social system. The diffusion represents the aggregated adoption decisions of these individuals over time.

Question 11

Forecasting innovation diffusion

Answer 11

Bass Model: is a diffusion model which represents an approach to predict the future market development for innovations.

Assumptions: Consumers can be divided into innovators and imitators

Innovators: decide to buy the innovation independently of others.
Imitators: Are influenced by the decisions of other in their social system.

Question 12

Forecasting innovation diffusion

Answer 12