Product innovation refers to introducing a new product in the market or making significant changes to an existing one. Innovation has been one of the most important business aspects for many years. It allows businesses to set themselves apart from their competitors. A company’s capacity to develop new products is considered one of the most valuable assets.
Large organizations are typically expected to have more product innovation compared to small ones. In reality, smaller organizations can be more innovation but the larger ones tend to have offer innovative products in a short period because they have several markets and activities.
Organizations need to understand product innovation to exploit it to their advantage. They need to recognize when innovation is necessary and when it is not. In addition, organizations need to understand the product innovation process.
Product Innovation Process
The product innovation process involves coming up with an idea and working on it to create a unique product or enhance an existing one. There are various stages that are included in this process. Every stage allows a company to gather relevant information to help it to shift its project to the next level. The stages include:
Idea Discovery
During this stage, an organization is involved in pre-work to help it identify and reveal business opportunities. Ideas are created at this stage.
Scoping
This involves carrying out investigations and scoping a project.
Establish Business Case
Comprehensive investigation is carried out at this stage. An organization has to carry out both technical and market research before it can engage in product innovation. This is the only way it can establish a business case. At this stage, the organization can define the product, justify it, and then propose a development plan.
Development
This stage involves coming up with a comprehensive design. It also includes new product development. An organization also needs to design the production processes that are required to produce the product.
Testing and Validation
Organizations have to test the new product in the plant, lab, and marketplace. Testing is necessary to confirm and validate the new product. The testing also validates the marketing plan and production.
Launch
Once the product is tested, it can be launched into the market. An organization can start to produce the product in full scale, market, and sell it to a specific target audience.
Is Product Innovation Necessary?
There is no doubt that product innovation can help an organization to attain competitive advantage. But this does not always mean it is necessary. Creating new products is essential but it may not always work to a company’s advantage. There are certain situations when product innovation is not required including:
Existing Products are Working
If existing products are working, there is no need to innovate. An organization may feel the need to innovate a product even if it already brings in a lot of revenue. If you have been producing a certain product for several years and your target audience is still interested, do not change it. Identify what your customers want and stick with it. Customers like consistency. They want something they can trust. Product innovation can interfere with consistency.
Signature Product
Product innovation is unnecessary when you have an iconic brand. If your target markets associates your company with a certain brand, you should not change it. Keep your signature product and ensure you maintain its consistency over the years. You can come up with completely different brand without modifying your signature product.
Poor Sales
Organizations can go through difficult periods and struggle to make profits. During such situations reinvention may seem like an effective solution to turn things around. But while altering an existing product may be helpful, organizations need to consider making other changes first.
It may be necessary to change your business operations or marketing strategies to improve profits. Conduct customer surveys to determine why your sales have decreased. A new product does not solve the cause of the problem. In such cases, product innovation can use up the limited resources available and lead to higher loses.
The funds that would have been used to reinvent a product can be used to boost marketing and distribution strategies. It is important for organizations to understand that innovation does not always solve your business problems. Changing your presentation can be more effective than coming up with a new product.
Factors to Consider
There are various factors that organizations need to keep in mind before they engage in product innovation. These factors include market, functional, economic, and competitive and trend analysis.
It is important to determine if your target audience will accept the product you are creating. Will your customer be willing to change from the current products to a new one? Think about the potential users before you create a product.
There are certain functional requirements that need to be considered such as the performance and features that the product will offer to existing and new customers. It is also essential to think about the cost of producing a new product and whether it will bring in good returns for the business.
Every organization faces competition in its niche. If you are thinking about product innovation, consider the kind of goods that your competitors are producing. Do they have capabilities that can threaten your innovation? Product innovation should give you an edge over your competitors. This is why you should consider competitive requirements before the innovation process begins.
Companies innovate constantly to improve their products and performance. But innovation has to be necessary. It is important for an organization to review its business processes and determine if there are certain things that need to be changed. If your brand is not iconic and if your industry requires constant innovation, product innovation is necessary.
Determine specific innovations that will offer the best returns for your investment before the process begins. Review your products and determine if there are any unmet needs that you can meet by reinventing. Product innovation is supposed to work to your advantage but this is only possible if it is done for the right reasons.
