9) Innovation and Markets

Pioneering strategy

is being the first to market with a new innovation

imitative strategies

involve developing products that are similar to exiting products which are successful .

market penetration

means increasing sales of an already existing product by finding new customers

product development

is the creation of new products aimed at a companies exisitng clientelle

market development

is finding new applications of an existing product and thus opening up to more potential markets

product diversification

means to increase new sales from a new products or markets through a large product portfolio

interpreting the Ansoff Matrix

down and right = more risk

corporate social responsibility (CSR)

is a form of self regulation for a company centering on economic, social and environmental factors

market sectors

is a broad way to categorize a companies target clientelle

georgaphical sectors

valeus, culture, and region

client-based sectors sectors

focusing primarily on the consumer

products in sectors

products designed to be sold in specific sectors

market segments

are a more focused category of target clientelle focusing on their shared characteristics

geographical market segments

consumer location

demographic market segments

consumer characteristics

psychological market segments

consumer lifestyle

behavioural market segments

consumer actions

product family

is a group of products that have simialr criteria, such as commmon parts and assemblies

the marketting mix

is a summary of market research to estbalish brief marketting requirements

the 4p’s

product, place, price, promotion

product: the 4p’s

all products related aspets throughout the products life cycle

price: the 4p’s

refers to the amount of money paid by a consumer to purchase the good

penetration pricing

sets a low initial price, but increases as they attract more consumers, this risks their brand image as they appear cheap

competitor based pricing

sets prices relative to competitiors (lower, equal, higher) to influence consumer choice

psychological pricing

uses perception tactics ($199) to make this longs cheaper

cost-plus pricing

adds a fixed profit margin to production costs to determine the selling price

product line pricing

offers similar products at different prices based on features and perceived value

demand pricing

starts with a higher price and gradually lowers it to capture varied market segments over time

place: the 4p’s

how the product reaches the consumer (can be virtual & physical)

promorion: the 4p’s

how the product is comunicated to interested parties

above the line promotion

magazines, tv, billboards, paid ads

below the line promotion

emails, packaging, PR

product standardisation

the process of setting uniform characteristics for a product, system, service

gov./trading area standardisation

requires products to meet national requirements to ensure safety

industry-wide standardisation

are voluntatary norms adopted across industries to ensure quality and competition

component standardisation

ensures compatibility of parts to improve user experience

efficency and performance standardisation

are gov. regulations to reduce energy consumption and imporve environmental impacts

trigger products

are ‘base’ objects that establish a sudden shift in consumer behaviour

incremental products

involve gradual improvements to existing designs

market research

the systematic gathering of data

literature search

written works

user research

obtaining user responses through interviews and surveys

user trial

observing how a product is used and feedback

expert appraisal

reliance on knoweledge of skilled experts

perceptual mapping

comparing products to others in the market (graphical data mdoelling)

environmental scanning

looking into trend that influence market opportunities and threats

innovators

take risks to adopt new innovations

early adopters

second fastest to adopt new innovations (after hearing good things)

early majority

rely on early adopters and take time to think but adopt fast

late majority

adopt after it has been established as a solid product in the market

laggards

unwilling to take risks as they are traditional, last to adopt.

bright greens

believe technology and social innovation are key o achieving sustainable development

committed greens

are very pro-environment and are willing to make economic sacrifices for ecological benefits

material greens

support environmentalism in principle but are inconsistent

green hypocrites

promote a publci green image but are unwilling to make personal sacrifices

green ignorants

are unwilling to make behavioural changes for ecological benefits

brand loyalty

is when a cusotmer makes repeated purchases from the same brand

hard core loyals

buys the same brand all the time

split loyals

loyal to 2-3 brands

shifting loyals

moves from one brand to another

switchers

no loyalty

trademarks

are a symbol or design that identifies the brands products as legally registered by that brand

registered design

is an intellectual property mark protecting the products appearance

package designers

aim to attract the buyers, communicate a message and sell the product

branding allows…

instant recognition and helps build a trsuted relationship with the consumer

Blue Ocean vs Red Ocean Strategy

Red ocean: competing in existing market space where industry boundaries are defined and accepted — competition is fierce .

Blue ocean: creating uncontested new market space by offering a fundamentally different value proposition — making competition irrelevant.

Example: Cirque du Soleil created a blue ocean by combining circus and theatre for an adult audience, avoiding competition with traditional circuses. Relevant to radical and disruptive innovation in DT.

Technology Readiness Levels (TRL)

A scale from 1–9 measuring the maturity of a technology: TRL 1 (basic principles observed) → TRL 4 (validated in lab) → TRL 6 (prototype demonstrated in relevant environment) → TRL 9 (proven in operational environment). Developed by NASA, now widely used in engineering and design to communicate how close a technology is to commercial deployment. Useful for evaluating feasibility of innovative design solutions.

Co-Design / Co-Creation

A design approach where end users, stakeholders, or customers actively participate in the design process rather than being passive subjects of research. Goes beyond user testing — users contribute ideas, make decisions, and shape the product. Benefits: designs better matched to real needs, increased user buy-in, access to tacit knowledge unavailable through observation alone. Related to participatory design and open innovation.

Porter's Five Forces

A framework for analysing the competitive intensity and attractiveness of an industry: (1) Competitive rivalry — intensity of competition between existing firms. (2) Supplier power — how much leverage suppliers have over price and terms. (3) Buyer power — how much leverage customers have. (4) Threat of substitutes — how easily customers can switch to alternatives. (5) Threat of new entry — how easily new competitors can enter. High forces = less attractive industry. Used to assess market positioning for new product launches.