Innovation

ARTICLE FROM:

Rohan Pande, Rajrishi Sen

2nd year Student (Marketing)

ICFAI Business School, Hyd

“There are only two functions of business marketing and innovation”
Peter Drucker

This statement makes it very clear to us that if one needs to survive in the market one needs to innovate.

At the very base of innovation remains Invention. But then what separates innovation from invention? For the answer we would again refer to Drucker…

“Its (innovation’s) criterion is not science or technology but a change in economic or social environment, a change in behaviour of people as consumer or producer, as citizens, as students or teachers. Innovation creates new wealth or new potential for action rather than new knowledge.”

Thus what separates innovation from invention is commercialization. Thus if we form an equation it will be like

INNOVATION = INVENTION + COMMERCIALIZATION

According to Kotler product includes two things Goods and Services. Thus Services are a subset of the universal set of Product not mutually exclusive sets. Thus when we talk about Product innovation we can refer to either Goods Innovation or Service Innovation.

There are three major classes of innovation.

• Incremental innovation:
  

In this type of innovation there is small change in the existing product.
Example – new models of an existing car like from Santro to Santro Xing.

• Disruptive innovation:
  

In Disruptive innovation it’s a new technology which brings a new value proposition to the existing product and at the same time changes the way the industry functions.
Example: ATM machines. It does the old function of tellering but it has changed the whole dynamics of the industry.

• Breakthrough Innovation:
  

Breakthrough innovations are absolutely new products and create new markets.
Example: Television Telephone etc.

Organizations which have created major impact through product innovations.

Xerox:

Kodak and 3M were the leaders in office copiers. These two companies had a chance to get hold of the rights of Carlson’s Xerography process. They did not. They thought that who would pay more for a plane paper copy when they can get a coated copy for less. But Haloid took the patent for the Xerography process and made millions of it and left Kodak and 3M way behind in this field.
Haloid was later named Xerox.

The first model of Xerox was 914. The model became extremely popular. This was probably Xerox’s biggest innovation, they not only made millions out of it but this innovation also let them become a generic name in the field of photocopiers. Xerox went on to make further incremental innovation like launching Desktop Copier (Xerox 813) and Colour copier. Another multibillion dollar innovation from Xerox came in the year 1971 when Gary Starkweather invented Laser printer for Xerox.

The company Xerox is known for all the above mentioned products, all of them earned Xerox great fortunes. But as Kodak and 3M did Xerox also missed out on a great opportunity. Xerox could have made millions (if not billions) out of their most innovative product Xerox Alto- the first PC (made in 1973).

This is hard to believe that Xerox did not cash on this innovation, what is even more surprising is Xerox went on to make another advanced piece of computer Xerox Star(1981), which was Ethernet enabled and one could email from the system.

Xerox did not make use of these two breakthrough innovations but companies like IBM, Apple did. Had Xerox made full use of their own technologies they would have probably been a generic name in PCs too.

The next innovation that gave birth to one of mankind’s most renowned names if not the most.

On May 8, 1886. Dr. John Stith Pemberton, a local pharmacist, produced syrup containing stimulant from coca leaves and caffeine from the Kola nuts, and voila Coca-cola was made. That was the day when the legend of Coca-cola was born. And the rest as they say was history.

Coca cola:

Coca-cola wasn’t the greatest invention of the 19^th century but it was the extraordinary marketing of 20^th century by Asa G. Candler what made Coca-cola a legend. It is tough to comment as in whether coca-cola’s success is due to innovation in product or due to innovative marketing. But at the end of the day the credit has to given to Dr. John Stith Pemberton because had he not come up with the product Asa G. Candler couldn’t have earned millions marketing it.

Coca-cola’s success again exemplifies one thing that innovation happens only when invention is commercialized.

FUTURE FIRST:

The sectors that are going to see maximum innovation in future according to us.

• Automobile
• Electronics
• Biotechnology
  

Why these industries going to see maximum innovation? The answer is pretty simple, because the backbone of these industries is innovation. We can already see the glimpses of the kind of innovation that are going to take place.

In the first two sectors we are going to see more of incremental and disruptive innovations where as the third segment is going to provide us with breakthrough products. Though it would be extremely difficult to predict exactly what kind of innovations are going to take place in which industry, but above mentioned possibilities might be a guide regarding what to expect.

But along with these industries we must not forget there may be many breakthrough innovation which might create absolute new market for itself, as we have experienced in the past with invention of airplane, telephone, radio, television, computer ……………………………………………………………………………

And the list may go on and on and on.....................