Topic 9; Innovation and markets

pioneering strategy

being the first to market a new innovation

imitative strategy

developing products that are simialr to already existing products that are succesful

market penetration

finding more clients ot increasing sales on an already existing product; - aimed toincrease market shares.

product development

making new and updated products which are aimed at the company’s existing clientelle

market development

finding new ways to apply existing products to gain more market shares.

product diversification

selling new products in new markets (risky)

ansoff matrix

a tool that offers 4 product and market growth strategies for a business.

Corporate Social Responsbilty (CSR)

a form of self regulation for development through economic, social and environmental areas.

market sector

a broader way to categorize industries

geographical sectors

focus on value, culture and charachteristics of purchasing power of clients in a region

client-based sectors

focusing purely on the consumer

products in sectors

finding out which products fall under whhich sector to determine marketing strategy

market segements

the division of markets into smaller categories which target customers on shared charachteristics

categories of market segments

geographic, demographic, psychographic, and behavioural

product family

a group of products which similar classification criteria.

the marketing mix

4 factors identifies through market research to help the designer understand brief requirements of a product.

4 P’s of the marketing mix

product, place, price, promotion

pricing penetration

pricing products at very low prices to gain more market share.

competitor based pricing

depending on the market, prices are set based on competition; either low, equal or high.

psychological pricing

prices appear cheaper than they actually are to influence consumer perception (199 instead of 200)

cost plus pricing

adding a percentage on a product detemined by the cost of production (a product cost 100 to make, add 20% to sell for 120 and make a profit)

product line pricing

selling different versions of the same product based on quality or features at different prices to attract more customer segments.

demand pricing

starting with a high price for early buyers and gradually lowing the price to attract more consumers.

above the line promotion

using paid branding methods such as tv, radio or billboards.

below the line promotion

cheaper and more targetted branding methods such as PR, emails or packaging.

product standardisation

having the same (uniform) characteristics of a product.

gov/trading-area standardisation

products must meet specific national requirements to be legally sold in countries.

industry-wide standardisation

companies often adopt similar standards to ensure safety, quality and fair competition among the market.

component standardisation

using common parts like in tyres and USB’s to ensure convinience for consumers.

efficency and performance standardisation

the gov. creates laws to limit harmful production strategies to make products more efficent and environmentally friendly.

trigger products

products that achieve basic needs and tasks

incremental products

products that have add-ons to the basic achieving product to make it more innovative.

market research

systemic gathering of data about consumers using statistical data.

• it is timely and constly but vital for product ideas

literature market research strategy

using consumer reports, newspapers, magazines to conduct research.

user trial market research strategy

observing how people use the product and gaining feedback

expert appraisal market research strategy

relying on the skill of an expert in the field

user research market research strategy

obtaining user responses through surveys or interviews.

perceptual mapping

a graphical tool to visually comapre how products appear across markets, relative to competitors.

environmental scanning

analyzing trends to identify threats and opportunities for a business

innovative consumer response (2.5%)

take high risks and are first to adopt new innovations

early adopter consumer response (13.5%)

quickly mebraces new innovations and influence others to do so as well.

early majority consumer response (34%)

rely on feedback from early adopters and adopt innovations after careful consideration

late majority consumer response (34%)

adopt only after there is proof on the goodness of the innovation

laggard consumer response (16%)

they avoid risk as they prefer tradition and thus are the very last to adopt innovations.

green motivated consumer response (10%)

commited greens are strongly pro-environment and are prepared to sacrifice economically for natures benefit.

bright green consumer response (34%)

believe that tech and social innovation are the best paths to achieve sustainability .

green hypocrite consumer response (26%)

promote a green image publicly but dont follow through genuine action

green ignorant consumer response (19%)

not interested in environmental issues and dont make sacrifices for sustainability

dull green consumer response (11%)

support environmental ideas but are less consistent in practicing green behaviour.

brand loyalty

when a consumer commits to a brand and repeats purchases.

hard core loyals

those who buy only from the one brand all the time

split loyals

those who are loyal to 2-3 brands

shifting loyals

those who move from one brand to another

switchers

those who aren’t loyal and always looking for a bargain

trademark

a legally protected recognizable sign which identifies a brand.

registered design

a legally protected visual feature of a product