The demand pull theory says that the market demand is a catalyst of technological change (Scherer, 1982). When the demand for a certain product exists, so the process of the invention transforming into the innovation makes sense. For instance, it is proved that users play more active role than specialist manufacturers in the innovation process – process, when innovations are entering the market. The research showed that social welfare is increasing when the innovation is catalyzed by both users and manufacturers (Ogawa & Pongtanalert, 2011). A new innovation paradigm shows that consumers collectively generate massive amounts of product innovations (Von Hippel, Ogawa, & De Jong, 2011).
A business would use Ansoff’s Matrix to determine its product and market growth, both present and potential, by focusing on whether the product and market are new or existing. It has four alternatives of marketing strategies; Market Penetration, product development, market development and diversification. (See appendix 1) • Market Penetration- the firm seeks to achieve growth with existing products in their current market segments, aiming to increase its market share; least risky. • Product Development- the firm seeks growth by targeting its existing products to new market segments; more
At individual level intrapreneurship, the trigger for innovation originate from the craving to confront oneself ahead of the obvious. Intrapreneurs seeking to reinvent a company in order to increase efficiency may do so by harnessing the power of technology, proper delegation of authority and power or find other ways to improve efficiency and effectiveness. Another trigger for intrapreneurs could be the desire to provide more value to the customer through intense customer focus. They may develop innovative ways of minimizing difficulty to the customers that would enable them to become companies that are more customer oriented. Alternately, they may enhance the company’s market offerings by providing supplementary features to its market offerings.
Process has to do with series of activities that are linked or connected. So the process of new product development has to do with the various step NPD team undergo to bring a new product/ service into the market. THE PROCESS OF NEW PRODUCT DEVELOPMENT According to Kotler et al. 2008: 254 stated in order to create successful new products, a company must understand its consumers markets and competitors and develop products that deliver superior value to consumers. The company must ensure that they plan about the new product and set a systematic new product development process for bringing new products in the markets.
It should be noted that the intensive growth of the enterprise justifies itself only when it is not determined full use of opportunities of the current goods and the markets. For definition of opportunities of intensive growth, F. Kotler recommends to use I. Ansoff’s matrix. There are three main types of intensive growth: penetration on the market - search of ways of increase in sale of the goods in the existing markets by means of more aggressive marketing policy; expansion of borders of the market – attempt to increase sales, seizing the new markets due to introduction on them of already existing goods; development of goods (work, services) – attempt to increase sales due to creation new or improvements of old goods (works, services) for already existing markets. The main directions of opportunities for growth according to R. Grant are specified in table 3.1. Table 3.1 - Main directions of growth opportunities (12) Intensive growth Integration growth Diversified
According to Leifer (2000), it is very important to understand radical innovation because it transforms the relationship between customers and suppliers, restructures marketplace economics, displaces current products, and often creates entirely new product categories. It may provide a platform for the long-term growth that corporate leaders desperately seek. Radical innovation concerns the development of new business or product lines that are based on new ideas, technologies or substantial cost reductions. Therefore, requires exploration competencies. Incremental innovation usually emphasizes cost or feature improvements in existing products or services and it requires competencies in the exploitation of existing knowledge.
Product development Product development is the name given to a growth strategy where a business aims to introduce new products into existing markets. This strategy may require the development of new competencies and requires the business to develop modified products which can appeal to existing markets. A strategy of product development is particularly suitable for a business where the product needs to be differentiated in order to remain competitive. A successful product development strategy places the marketing emphasis on: • Research & development and innovation • Detailed insights into customer needs (and how they
Understanding and adapting to this new managerial concept requires a company to overcome educational and motivational challenges. Changing an organization’s culture is quintessential to achieving the main goal: maximizing shareholder value. Re-educating and changing personnel reward systems are necessary for a good implementation of the value based management concept, which is oriented on obtaining value in the long-term. Value based management, treated as a new philosophy, forces leaders to shift their way of thinking and to use new strategic and control tools, rather than abide to plans guided by accounting budgets which aim to increase certain performance indicators that can be manipulated, such as profit or capital. Another feature of this new management philosophy is that managers are rewarded by their contribution to long-term value creation for shareholders, rather than an increase in short-term performance indicators.
In market driving strategy, the companies makes the buyer to unlearn and then learn. It makes the buyer learn why they need the product and hence creates a demand. Hence now a days, Market places are focused on creating customer needs and wants. The companies offer new-to-the-world products and teach the buyers about the importance and usability of the product, create value and logic for choosing the product. It changes the fundamentals of business through innovation and teach the potential customers adopt their value proposition.
(Shani et.al, (2013) stated that the marketing of the company or the product is directly responsible for the consumer society. Marketing has the responsibility of the consumer society. After the year 1990, the consumers are attracted towards the products having the big brand and the huge marketing that helps to change the decisions of the consumers. A company markets its products in order to increase the knowledge of the product in the market. According to the study of Zhang et.al (2014), with the help of marketing, the individuals become aware about the new products exist in the market.