Definition of Innovation
Innovation is the practical implementation of ideas that result in the introduction of new goods
or services or improvement in offering goods or services.
Schumpeter, Joseph
It is imperative for the companies to
understand the innovations that are
needed to enter the markets and to
retain the customers.
They need to describe value added
marketing strategies while adopting
innovation.
In other words, innovation should
increase profitability.
Development of Marketing Strategy Models
Companies going for adoption of innovation need
answers to the following questions:
1. Which are the factors that can be eliminated and
which industry takes it for granted?
2. Which are the factors that can be reduced below
the industry standards?
3. Which factors can be raised well above the industry
standards?
4. Which factors should be created that the industry
has never offered?
Strategic Orientation in Marketing
In light of the market shifts, marketers must Analysis of the following situation have to be
develop a strategic vision for their products done in order to offer the best product and
and brands. The following can be analyzed to services.
achieve this:
What is the customer’s perception and
Understanding Markets
expectations?
Analysis of latest trends.
How a brand image is to be built?
Estimating demand patterns.
What about the competitor strategies?
Gauging competition.
What is the product usage situation and
Predicting future products/services.
frequency?
Finding market niches
What is the strategic orientation?
Marketing Strategy
A marketing strategy is a business's game plan for reaching prospective consumers and
turning them into customers of their products or services. Marketing strategies should
revolve around a company's value proposition.
Product Fit Matrix
Ansoff Matrix
Market Penetration
Management tries to sell more of its current products into markets they are familiar with and where they
already have contacts when they use a market penetration strategy. Typical methods of execution
include:
Stepping up marketing initiatives or simplifying the distribution chain
Lowering costs to draw in new clients within the market sector
Acquiring a rival in the same industry
Market Development
This focuses on introducing current items to new markets. Because it does not necessitate a sizable
investment in R&D or product development, a market development approach is the second least
hazardous. Instead, it enables a management team to capitalise on current items and introduce them to
a new market. Methods include:
Serving a different customer base or target market
Launching a new domestic venture (regional expansion)
Launching an overseas market entry (international expansion)
Product Development
The goal of “product development” is to provide new products to an existing market. It may follow
the following options:
R&D spending to create a whole new product (s).
Obtaining the rights to manufacture and market a product made by another company (s).
Branding a white-label product that is actually made by a third party to create a fresh offering.
Diversification
The idea of entering a new market with entirely new products is known as “diversification”.
In terms of risk, diversification strategies are typically the riskiest because they require both product and
market development.
Even though it is the riskiest method, it has the potential to produce enormous returns, such as opening
up entirely new revenue prospects.
Porter's Value Chain Analysis: Breaking Down the Business Engine
Porter's Value Chain Analysis is a powerful framework developed by Michael Porter in his 1985 book,
Competitive Advantage, to dissect a company's activities and pinpoint where value is created for customers. It's
essentially a roadmap that breaks down how a business transforms inputs into outputs, generating profit along
the way.
Understanding Value Creation:
Cost Drivers: Factors that contribute to the cost of each activity.
Differentiation Points: Activities where the company can create a unique advantage over competitors.
Value-Added Activities: Activities that increase the product or service's perceived value for customers.
Benefits of Value Chain Analysis:
Improved strategic decision-making: Helps businesses allocate resources effectively and prioritize activities
that create the most value.
Enhanced competitive advantage: Identifies areas where the company can outperform competitors.
Increased operational efficiency: Streamlines processes and reduces costs by eliminating waste and
redundancies.
Improved customer satisfaction: Focuses on delivering value to customers at every stage of the value chain.
Customer Relationship Management
Customer relationship management (CRM) is a strategy and a set of technologies that businesses use to
manage and analyze customer interactions and data throughout the customer lifecycle, with the goal of
improving customer service relationships and assisting with customer retention and drive sales growth.
Benefits of CRM:
Improved customer satisfaction: By providing better customer service and support, CRM can help
businesses improve customer satisfaction levels.
Increased sales: By helping businesses manage their sales pipelines more effectively, CRM can help
them increase sales.
Reduced costs: CRM can help businesses reduce costs by streamlining their operations and improving
efficiency.
Improved decision-making: CRM can provide businesses with valuable data and insights that can
help them make better decisions.
