PRODUCT AND INNOVATION MANAGEMENT

Posted: January 4th, 2023

PRODUCT AND INNOVATION MANAGEMENT

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Product and Innovation Management

Introduction

            Businesses, today, need to adopt technologies and innovations to improve production and to introduce new products to satisfy the everchanging consumer interests. Implementing new methods and product innovations are the primary requirements for survival in the market for any business-oriented entity from a global perspective (Bagno, Salerno, and Dias 2017). Product innovation implies generating new ideas that should be implemented to realize the competitive advantage of an organization in the market. The impact of product and innovation management on Blauberg, a company based in the United Kingdom, is explored based on the academic concepts of business management.

            Innovations involve the incorporation of an organization’s resources and competencies in the process of achieving new market offerings, whose success brings immense value to the company. Through innovation, intellectual assets are generated by establishing copyrights, trademarks, trade secrets, and industrial brands, and designs. The ongoing innovation advantage is possible if organizations focus on building their capabilities based on customer value and satisfaction. Innovations lead to the development of change in different aspects of business and can be explained using various theories.

Theories and Concepts of Innovation

Diffusion of Innovations

            Everett Rogers introduced the diffusion theory of innovations in 1962. The main focus of the theory is on the factors that determine whether or not and the pace with which an innovative idea will be adopted by members of a particular society and culture. In his book, Diffusion of Innovation, Rogers describes diffusion as the process by which an innovation is presented using different channels to the members of a social system over a specified duration (Naqshbandi and Singh 2015). Rogers’ arguments show four aspects that affect the spreading of an innovative idea, invention, media of communication, time, and the social system of the community.

Besides, Rogers presents other elements of focus in his diffusion research. The characteristics of an innovation, communication medium used, and individuals that initiate it are essential in determining its perception and adoption in society, depending on the benefits presented (Pachura 2017). The decision-making process that transpires before the adoption of the innovation, product, or idea is much linked to the motivation and need for implementing change together with its implications to the people. These elements determine the magnitude with which the innovation idea is received by the community.

According to the diffusion theory of innovation, the process much depends on human resources and its success and ability to sustain itself is dependent on the extent of its adoption. The theory classifies innovators into five  different groups: innovators, early adaptors, early majority, late majority, and laggards (Naqshbandi and Singh 2015). The theory functions as the decision-making process since information flows through different media of communication, and the duties and opinions of facilitators determine the extent of its success. Also, intermediaries often referred to as change initiators, and they play a vital role in influencing the behavior of the prospective innovators.

The Open Innovation Concept

            The open concept to innovation was first introduced by Henry Chesbrough nearly 10 years ago and has played a vital role in influencing changes in the business environment. The idea is based on the assumption that organizations can explore both internal and external views and market paths before advancing their technology (Tohidi and Jabbari 2012). Chesbrough defined the open concept to innovation as the goal-oriented inflows and outflows of information to facilitate innovation and expansion to the external market.

            The conceptual framework of the model is based on the provision of innovative ideas from both inside and outside the organization and reach the new markets through similar procedures. In the approach, the boundaries of the firm extend towards external views and paths that govern the market to produce different varieties and qualities of products (Pachura 2017). The extension of production boundaries leads to the formation of more partnered productions, resulting in greater technological exposure, acquisition, and exploitation. Consequently, the merging of organizations in an open model of innovation results in increased resources that speed up the innovation process.

            Open innovations are classified into two dimensions. Inbound changes include the application of existing innovations and establishing relationships with founding organizations with the objective of accessing their competencies to jointly enhance their innovation performance. In other words, the concept implies innovative technological explorations and initiating approaches to improve current technological developments using external sources of knowledge (Naqshbandi and Singh 2015). On the other hand, outbound innovations include the application and exploitation of existing technical capabilities outside the organization to initiate innovations. External exploitation of ideas and opinions can be induced in various markets by selling intellectual property rights and multiplying technology by deviating ideas from the external environment. The dimensions of open innovations explain the applicability of the theory in enhancing the process in an organization.

Blauberg UK Limited

            Blauberg UK Limited is part of the Blauberg group of companies in the United Kingdom. The company was registered in 2008, and its headquarters are located in Leicester, Leicestershire. According to a recent study, the company has one active director and one busy secretary with a total of 28 employees. The company registers an annual revenue capital of 5 million dollars. Blauberg UK Limited service the UK ventilation market with a variety of traditional and innovative products, which include commercial, industrial, and residential ventilation products (Company Profile Blauberg UK Limited ‘n.d.’). The company is specialized in mechanical ventilation with heat recovery, offering the supply of air handling units, ventilation ducting and fittings, and passive house certified MVHR products. Product and innovation management of new products in the company is analyzed.

Product Innovation in Blauberg UK Limited

            Often, product innovation is referred to as the perceived newness, novelty, originality, or uniqueness of products or generally the development of new products. Product innovation is the introduction of new tangible or intangible products and services that have significantly updated features compared to similar products existing in the market (Haleem, Kumar, and Luthra 2017). The uniqueness of innovative products can be classified according to their properties, functions, aesthetics, and performance. The process of product innovation may result in a presentation of totally new products or existing products with improved characteristics. Innovations in Blauberg UK limited will benefit the company through improving its market position, brand name, competitiveness, and the client base.

Technological advancements have led to the innovation and production of a low noise MVHR heat recovery ventilation system ventilator fan with Wi-Fi application control and an inbuilt router. The technological innovation in the production of this system enables the user to program and control indoor air quality through a smartphone or iPad using Wi-Fi or control from any location with a built-in smart hub. The manufacture of the ventilator system fan incorporates a wireless router that provides simple operation and control as well as offering a full Modbus connectivity of any compatible building management system (Company Profile ‘n.d.’). This product has not yet been marketed, and an appropriate and effective approach for its marketing is outlined.

Marketing Innovations for the Product

Open innovations have positive impacts on consumers through the initiation of new products with unique or advanced features in the market. The role of marketing in innovation is taking a diversion with adaptation to open innovation mechanisms. Data obtained from clients  result in closer interaction and integration between research and development and marketing activities (Baker 2010). Hence, the process can be open due to external cooperation and acquiring information.

Marketing functions have been recognized as enhancing the relationship between an organization and its clients based on the obtained data about consumer behavior and reaction to market varieties. Modern views on marketing explain that companies can adopt new marketing strategies through the introduction of changes and innovation in marketing products (Chen 2011). Market innovation brings in considerable novelty in product design, packaging, pricing, and promotion through the implementation of new marketing procedures. Some of the approaches that can be used to market the company’s products are described below:

Customer Considerations and Analysis. Customer satisfaction is an essential goal for every business organization. Customer desires and requirements are the primary driving force for innovation. Marketing new products require that the product can effectively provide the client with the services required, minimizing the cause and effects of failure (Gumus 2015). The new product by Blauberg UK should be able to provide adequate satisfaction to customers. Majorly, the product should be able to supply quality indoor air while minimizing energy consumption. Moreover, the equipment could be handled with ease through remote access.

            The specifications of the products are essential to provide customers with an overview of the functionality of the ventilation system. The ventilation system has a low energy consumption rate because of the low specific fan power. The system can constantly supply and extract standard grade air at a higher flow rate, an essential specification to clients as it enables the fan to effectively condition room temperature faster (Joueid and Coenders 2018). These properties of the product provide a competitive advantage to the product against existing ones in the market that do not have similar properties. Customer analysis and considerations are important aspects of marketing the product.

Market Segmentation. Market segmentation is fundamentally concerned about the classification within the mass market and dividing customers into appropriate groups of product consumption. The principal aim of segmentation is to determine the population of the market that would highly adapt to the new product (Saari 2017). Segmentation would help in marketing by focusing more on the segment of customers who are likely to require the essential services of the product. Market segmentation is customer-oriented and makes competitors aware of the market, providing leads to better targeting and positioning programs.

Marketing the ventilation product would require the analysis of the scope of its application in air conditioning. The company provides a range of services to society in the commercial, industrial, and residential segments, and the segmentation of the market based on the three areas of operation would positively impact on the marketing of the product (Kanagal 2015). For instance, the product might sell more in commercial and residential arenas compared to the industrial segment because of the mode of operation of the product. Therefore, marketing the product would be effective in these two areas.

Distributive Channel Analysis. It is essential to consider the modes of product distribution during marketing. Distributive channels are critical because they determine the frequency and magnitude of customer interaction with the product. For instance, marketing the product effectively would require the company to have distributive stores in different locations to facilitate the process of obtaining a larger customer base (Reguia 2014). Distributive stores are necessary because they illustrate the flexibility of the company in ensuring that it brings products and services closer to clients.

            Besides, the company can embrace the new technology by adopting the use of the internet in marketing. Apart from distribution stores, Blauberg UK Limited can develop an online store through which online clients can access and purchase products. The use of the internet helps in  marketing the product across a wide range of online customers. Achieving an online purchasing model would provide appropriate guidelines on how customers can obtain their products after purchase (Sánchez et al. 2011). For instance, the company can invest in different modes of transportation to facilitate the delivery and supply of its products from distributive stores and online platforms. Such approaches would contribute to effective marketing through a hassle-free logistics process.

Appropriate Modes of Advertisement. Advertising is an essential aspect of product promotion in marketing. Advertising is the primary method through which information concerning the product can be conveyed to consumers. It is crucial for business organizations to use different advertising methods in marketing their products (Midgley 2014). Recently, many forms of advertisement have emerged and are used to communicate with clients and to convince them to purchase different products.  Depending on the target market, appropriate modes of advertisement should be adopted for product promotion.

            Adverting in marketing provides the diffusion theory of innovation in that the mode brings new products to the market through a variety of channels and subject it to customer adoption. Blauberg UK Limited can use advertisements in marketing the ventilation system. Different platforms that can be used for advertising include television, billboards, and social media (Shanshan and Yulin 2011). Vital information about the product that should be highlighted in these forms of advertisement is the specification, brand, price, and the benefits of installing the system in different settings. Alternatively, technological advancements can be adopted in advertising and LED screens can be strategically located to display videos and to illustrate the operation of the product. Marketing would enhance the adoption of the product by the targeted consumers.

Competition Analysis. Competition analysis is essential in the management of new products as an organization can identify the key players in the market, the quality, and the pricing of products and services offered. This analysis helps in obtaining an advantage over the major players in the market as the company is familiar with the client requirements and the rate at which products are consumed (Lancioni 2025). Besides, marketing innovations are a significant source of sustainable competitive advantage as organizations focus on achieving the best in the market through injecting innovative approaches. Blauberg UK Limited can research the air ventilation market and compare available products to the new product. The approach is vital since it weighs the difference between existing products and the new product, providing the basis for its adoption by consumers.

Conclusion

            Product and innovation management is a growing subject in the business environment. Product innovation, just like any other aspect in business, is affected by both internal and external factors that initiate or inhibit the process. The continuous evolution of the business environment subjects organizations to rapid changes in the social, economic, political, and technological domains. Modern business frameworks are centered on customer satisfaction, and expectations as companies work to ensure that their products and services meet clients’ specifications. Besides, the marketing of products has adopted different avenues through which the process is simplified. Open innovations have positive impacts on the market through the initiation of new products with unique or advanced features in the market. The role of marketing in innovation is taking a diversion to open innovation mechanisms.

            Successful product innovation and management lead to the development of new products and services, facilitate the rise of new markets, initiate the development of business enterprises, and increase customer value. Through innovation, new products are developed, and therefore firms have higher productivity at lower costs and increased profits. Innovation could also generate employments in society. Customers benefit in terms of more product choices, better services, reduced prices, and enhanced productivity. The diffusion and adoption of innovation consequently impact the nation’s economy, providing the foundation for productivity growth, increased revenue, and improved living standards. Continuous innovation advantage is possible if organizations focus on building their capabilities and the correlation of customer value and satisfaction.

Reference List

Bagno, R, Salerno, M, & Dias A, 2017, ‘Innovation as a New Organizational Function: Evidence and Characterization from Large Industrial Companies in Brazil,’ Production, vol. 27 no. 6, pp 234-245.

Baker, MJ, 2010, ‘Strategies for Launching New Products; Marketing New Industrial Products,’ Journal of Business Management, pp153–169.

Chen, Y, 2011, ‘Marketing Innovation,’ Journal of Economics and Management Strategy, vol. 15, no. 1, pp101–123.

Company Profile Blauberg UK Limited, Available from: <https://www.blauberg.co.uk/> [Accessed 26 April 2020].

Gumus, S, 2015, ‘Marketing of Innovation in Business,’ Procedia – Social and Behavioral Sciences, vol. 181, pp261–268.

Haleem, A, Kumar, S, & Luthra, S, 2017, ‘Flexible System Approach for Understanding Requisites of Product Innovation Management’ Global Journal of Flexible Systems Management, vol. 19, no. 1, pp19–37.

Joueid, A, & Coenders, G, 2018, ‘Marketing Innovation and New Product Portfolios. A Compositional Approach,’ Journal of Open Innovation: Technology, Market, and Complexity, vol. 4, no. 2, pp19-36.

Kanagal, N, 2015, ‘Innovation and Product Innovation in Marketing Strategy,’ Journal of Management and Marketing Research, vol. 18, pp1–25.

Lancioni, R. A, 2015, ‘A strategic approach to industrial product pricing: The pricing plan,’ Journal of Industrial Marketing Management, vol. 34, no.2, 1pp77–183.

Midgley, DF, 2014, ‘Innovation and New Product Marketing,’ International Journal of Business Management, vol. 5, pp45–67.

Montero, R, & Pennano, C, 2017, ‘Product Innovation and Management,’ Journal of Innovation Management, vol. 158 no. 3, pp43–67.

Naqshbandi, M, & Singh, K, 2015, Theories in Innovation Management in Selected Theories in Social Science Research. UM PRESS.

Pachura, A, 2017, ‘Innovation Theory and Change in Networked Reality,’ Polish Journal of Management Studies, vol. 15 no. 2, pp73–182.

Reguia, C, 2014, ‘Production Innovation and the Competitive Advantage’ European Scientific Journal ESJ, vol. 14, pp140–158.

Saari, T, 2015, ‘Marketing Plan for New Product,’ pp1–35.

Shanshan, Z, & Yulin, Z, 2011, ‘Market Structure, technological Innovation and Industrial Competitive Advantage: Policy Choices for Catching Up,’ 2011 International Conference on Product Innovation Management, pp1–45.

Sánchez, A, Lago, A, Ferràs, X, & Ribera, J, 2011, ‘Innovation Management Practices, Strategic Adaptation, and Business Results: Evidence from the Electronics Industry,’ Journal of Technology Management & Innovation, vol. 6, no. 2, pp14–39.

Tohidi, H, & Jabbari, M, 2012, ‘Product Innovation Performance in Organization,’ Procedia Technology, vol. 1, pp521–523.

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