Selling Innovations Effectively"Literature Review" Chapter

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¶ … Sell Product Innovations Effectively

It is not a new phenomenon to include users in new product design and development. However, academic research in this area is still rather novel. Since the start of this new millennium, there has been a multiplication in the involvement of users in the innovation process. This increase of involvement by users indicates that the firms who include users as an active part of the innovation process can greatly benefit from this approach. However, there is also research that warns that there are dangers of customer involvement in the process of innovation. The holistic approach to innovation suggests that there should be a wide range of established interactions between various participants in the process of expansion and development of methods, tools, and approaches for the refinement of innovation. This work focuses not only on approaches addressing customer/consumer involvement in the innovation process, but also specifically makes recommendations that are useful for firm managers. It is important to provide recommendations for firm managers, so that they can usefully make decisions that will enhance the innovation process.

Table of Contents

Introduction 3

Conceptual framework 5

Literature review 6

Experimental Measurements 10

Innovation Characteristics 10

Adoption of/Propensity to Adopt Innovations 10

Geographical Innovations 11

Market Characteristics 11

Conclusion 12

References 13


In order for a firm to have constant sustainability new products are very important. However, these new products also involve risks and costs. New product development is an essential driver of shareholder value, and is one of the three fundamental business processes. Also, product innovation in today's extremely competitive business environment has become an important source of sustainable growth, financial success and competitive advantage (Sorescu & Spanjol 2008). It should also be noted that the percentage of success of new product initiatives within the market is generally very small; this further proves the point that there is a need for extensive research into the factors that play a part in successful commercialization of new products (Fu et al. 2010).

Generally speaking, it has been confirmed by research that market (e.g., demand) and product (e.g., differentiation) are characteristics that are essential determinants of any new product. Unfortunately however, often new products fail to perform very well and/or fail completely, even though the products are of a superior nature and there are attractive markets for the products. This poor performance or failure of the products could be a result of the simple but crucial truism that 'new products can't sell themselves'. Indeed, it is at least partially the responsibility of the sales force of a firm to facilitate the exchange and diffusion of new products (Fu et al. 2010). Therefore, the fate of any new product depends greatly on the way that the sales force of the company reacts to it and how the product is accepted and 'owned' by the sales force. These are the prime factors that ultimately add up to the success or failure of a product (Zablah et al. 2011)

Salespeople that work in the field have a great deal of freedom concerning which products and/or services that they focus their efforts and energies on. This is at least in part because their day-to-day activities aren't monitored all that closely by the managers. Such a lack of focus can prove to be quite troublesome for the management, especially in cases of tactical initiatives such as the introduction of a new product. The manner in which a new product performs in a market greatly depends upon the efforts made by the salespeople in trying to introduce and sell the product to the target customers (Fu et al. 2010). However, it should also be pointed out, that, if the salespeople are not focused on selling the new product, this is at least partially due to a failure of management to effectively sell the product to the salespeople.

It has become crucial for the companies to improve their innovation performance due to the interactive environment of innovation and the way that the external knowledge is being absorbed. Today companies often feel that the conventional approach where research and development (R&D) was solely responsible for innovation is very deterministic and narrow. Hence, many other resources are being used by firms in order to improve their innovation skills. There are presently a number of ways through which innovation solutions are being created. This approach is a part of the 'open innovation concept' that enables firms to assign ideas that come from external sources (Rocheska et al. 2014).

According to research, the success of a new product largely depends on the market and the orientation of the customers present in that market. Therefore, it is important for firms to focus on their market and their customers' needs and desires when coming up with new ideas and products and performing innovation. Market research is often performed by companies to find out about market trends and to determine the needs and wants of the customers. However, there are limitations present in the typical market research that include the following:

1. Due to functional fixedness, customers find it difficult to communicate their new needs.

2. Often, the 'wrong' types of questions are being asked by market researchers in trying to determine new needs, as they are focused on finding out what the "average customer" wants. This often leads to innovation being of mediocre standards and limiting the chances of further and better innovation (Weber et al. 2012).

3. Equally often, instruments such as surveys fail to include open-ended questions and/or comment boxes so that consumers expressing opinions have more options to express their needs and/or wants and concerns.

Conceptual framework

The availability of resources to exchange knowledge and reviews about various products has made users and customers more aware; this has ultimately resulted in their asking for higher quality requirements in services and products. It is important for companies to have open innovation processes, and to have open and straight-forward channels of communication with users and customers. What this means is that the firms should be able to know about user behavior, and they should take note of these behaviors during the innovation process, so that the needs of the customers could be more readily 'catered to'. Users are actually the beginning of the innovation process, as, they help the firms in determination of problems with existing products. As well, users provide information concerning what could be done to not just eliminate the problem in a new product(s) but make such products fit more closely with the present and future needs and desires customers (OECD 2009; Rocheska et al. 2014).

It is not just the innovations designed by the companies with regards to their proposals, ideas, and requirements that the customers play a role in. Customers are also essential to the innovation of the companies on the whole. This happens when the involvement of the customers leads to value co-creation and collaboration. Therefore, the following factors play a role in determining the innovation of companies:

a. Identifying the tastes, needs, and requirements of customers and using them to form suitable innovative solutions;

b. Value co-creation with the users with the help of instituting interactions;

c. Conducting the implementation of innovation that is generated by the users (Rocheska et al. 2014).

Literature review

Unpredictable market conditions with considerable technological advancements are being faced by many companies. It is required by these organizations to push towards enhancing the capabilities of their New Product Development (NPD) so that customer preferences and market demands can be satisfied. In many organizations the NPD is one of many strategic activities so long as new products help in the generation of profit growth with emphasis on a higher rate of sale. In fact, one of the key determinants towards the success of an organization is its new products.

Although considerable research has been conducted on the roles of innovative strategies and NPD in the improvement of financial performance, and the formation of competitive advantages for firms, not much importance has been paid to the roles of new products and their expected goals. The research literature concerning the success of NPD focuses on a number of variables. The involvement of the supplier and the customer in the NPD processes have been two points of focus (Nazari-Shirkouhi et al., 2015).

In order to develop an effective design, there is a need for resources that either belong to the organization, or that can be accessed externally with the help of suppliers, customers and/or other sources. Involvement of suppliers or customers can prove to be a form of competitive advantage for the firm, as these sources can provide the firm with knowledge and resources that the company might be lacking. Concerning product design, customers may have many significant ideas (Crawford & Di Benedetto, 2011). Opinions and reviews of the customers can be obtained regarding the new product design and its functions, and customers can be asked to assess the prototype. Usually industrial designers start using hard models and drawings, instead of sketches and… [END OF PREVIEW]

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