Disruptive Innovations in Marketing
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Questions and Answers

What is the primary focus of Design Thinking?

  • Maximizing the use of technological advancements
  • Ensuring strict adherence to industry standards
  • Identifying financial opportunities for a product
  • Understanding and addressing the needs of users (correct)

Which of the following best defines 'extreme users' in the context of problem-solving?

  • Users whose problems are highly exaggerated compared to average users (correct)
  • Users who avoid using any form of technology
  • Average consumers with typical purchasing habits
  • Users who provide unstructured feedback during testing

What step in the Design Thinking process involves gathering user feedback through testing?

  • Ideate
  • Test (correct)
  • Prototype
  • Empathize

Which of the following is NOT listed as a disadvantage of Design Thinking?

<p>Requires extensive market research (D)</p> Signup and view all the answers

What does the Prototype step in Design Thinking emphasize?

<p>Making small, rapid changes based on costs (B)</p> Signup and view all the answers

What is one advantage of using techniques from the Empathize phase?

<p>Enables early testing of assumptions about users (B)</p> Signup and view all the answers

What kind of experiments involve testing a radical new concept under a non-dominant brand?

<p>Experimental 'Brand' (C)</p> Signup and view all the answers

Which of the following is a method used to gain customer insights in Design Thinking?

<p>Focus Groups (C)</p> Signup and view all the answers

Which factor is NOT part of the 4 factors that underlie the performance of ideation?

<p>The speed of implementation (A)</p> Signup and view all the answers

What is a key benefit of diversity during the ideation process?

<p>Greater creativity and innovation (B)</p> Signup and view all the answers

When is it recommended to talk to customers in the design process?

<p>Before and after ideation, as well as after prototyping (C)</p> Signup and view all the answers

What should be balanced in the prototyping phase?

<p>Clarity vs. accuracy and affordability (D)</p> Signup and view all the answers

What is meant by 'make ideas tangible' in the prototyping phase?

<p>Building prototypes that can be tested and evaluated (D)</p> Signup and view all the answers

What is a limitation of evaluative research mentioned?

<p>Determining the right audience is challenging (B)</p> Signup and view all the answers

In the context of experiments, what is essential to consider regarding risks?

<p>Identifying constraints on events and resources (D)</p> Signup and view all the answers

What should be the focus when refining prototypes during testing?

<p>Gathering useful feedback through real-time modifications (B)</p> Signup and view all the answers

What is a key challenge faced by companies when dealing with disruptive innovations?

<p>They often need to abandon profitable business models. (C)</p> Signup and view all the answers

What phase follows the initial slow growth of a new product in the Market S-Curve?

<p>Rapid adoption (B)</p> Signup and view all the answers

Which market segmentation method focuses on customers' lifestyles and interests?

<p>Psychographic (A)</p> Signup and view all the answers

Why might established firms struggle to adopt disruptive technologies?

<p>They focus too much on existing customer needs. (D)</p> Signup and view all the answers

How can a company assess if a market segment is attractive?

<p>By considering barriers to entry and potential profitability. (C)</p> Signup and view all the answers

Which of the following correctly defines disruptive innovations?

<p>Innovations appealing primarily to niche markets with different attributes. (D)</p> Signup and view all the answers

What is the first step in the ATAR model for driving early growth?

<p>Awareness (C)</p> Signup and view all the answers

What is a key characteristic of sustaining innovations?

<p>They enhance existing attributes valued by core customers. (D)</p> Signup and view all the answers

What is a primary factor that may hinder established companies from transitioning to new technology?

<p>Short-term profit focus and risk aversion. (D)</p> Signup and view all the answers

What factor is crucial for converting customer interest into a first-time purchase?

<p>Understanding customer behavior and pricing. (C)</p> Signup and view all the answers

What does the term 'switching S-curves' refer to?

<p>The challenge of adopting new business models and technologies. (B)</p> Signup and view all the answers

Which statement is true about the Innovator's Dilemma?

<p>The dilemma occurs because short-term thinking can impede innovation. (C)</p> Signup and view all the answers

Which aspect does NOT directly relate to customer acquisition assessment?

<p>Decision-making processes of suppliers. (B)</p> Signup and view all the answers

Why are shareholders often unhappy with switching S-curves?

<p>Switching involves high risks and uncertainty. (D)</p> Signup and view all the answers

What typically occurs in the early stages of disruptive innovations?

<p>They seem unattractive for growth opportunities. (D)</p> Signup and view all the answers

What initial experience do new products typically undergo in the Market S-Curve?

<p>Years of ideation and slow growth. (D)</p> Signup and view all the answers

Which of the following best describes open innovation?

<p>Collaborating with external parties for innovation (B)</p> Signup and view all the answers

What is the main purpose of corporate accelerators?

<p>To attract startups to work on established product platforms (A)</p> Signup and view all the answers

What is a significant limitation of observation in understanding consumer behavior?

<p>It only captures current actions, not future desires (D)</p> Signup and view all the answers

Which innovation strategy encourages employees to act like entrepreneurs within the organization?

<p>Intrapreneurship (A)</p> Signup and view all the answers

Which of the following is NOT a reason for companies to launch corporate accelerators?

<p>High-profit margins from existing products (C)</p> Signup and view all the answers

What role does Venture Capital as a Service (VCaaS) play in corporate innovation?

<p>It partners with external firms for strategic startup investments (C)</p> Signup and view all the answers

What is the impact of incorporating customer feedback into the innovation process?

<p>It enhances product relevance and alignment with market needs (B)</p> Signup and view all the answers

How can innovation labs contribute to a company’s growth?

<p>By exploring and experimenting with new ideas and technologies (A)</p> Signup and view all the answers

What does interdependence risk refer to in the context of innovation?

<p>The joint probability of different partners fulfilling their commitments on time. (D)</p> Signup and view all the answers

How does increasing the number of intermediaries affect market adoption according to the content?

<p>It increases the uncertainty surrounding market adoption and success. (D)</p> Signup and view all the answers

Which of the following is NOT a benefit of design thinking as a social technology?

<p>Offers total autonomy in the design decision-making process. (B)</p> Signup and view all the answers

What aspect of innovation is least impacted by external development according to the content?

<p>The innovation’s independence from other components. (D)</p> Signup and view all the answers

What is a purpose of adding adoption cycles in integration assessment?

<p>To estimate delays due to intermediary adoption. (A)</p> Signup and view all the answers

Flashcards

Market S-Curve

The pattern of product adoption, starting with slow growth, then accelerating until saturation.

Disruptive Innovation

A new technology that initially performs worse than existing solutions along key customer metrics, but targets a niche market.

Sustaining Innovation

A new technology that improves performance along existing customer attributes to enhance existing products

Innovator's Dilemma

The difficulty established companies have in adopting or responding to disruptive innovations.

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Switching S-curves

The need for companies to adopt new S-curves arising from disruptive technologies.

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Niche Market

A small segment of the market with specific needs and preferences.

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Initial Slow Growth

The early stage of a product's market adoption that involves minimal purchases.

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Market Saturation

The point at which a product's adoption reaches a maximum, usually leading to decreased demand.

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Market Segmentation

Dividing a broad market into smaller, more specific sub-groups of consumers.

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Market Attractiveness Assessment

Evaluating a market's potential value based on customer acquisition cost, competition, customer satisfaction, projected growth, profitability, and entry barriers.

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Early Market Growth

Process of increasing the usage of a product by achieving awareness, encouraging trial, ensuring availability, and fostering repeat purchase.

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Customer Acquisition Cost

The total cost of acquiring a new customer.

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Competition Intensity

The level of existing competition in a market segment.

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Segmenting by Benefits Sought

Dividing the market based on the key benefits consumers seek in a product or service.

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Innovator Challenges

The common issues for innovators include difficulty in transitioning to new technologies and managing the risk associated with leaving existing, successful models behind.

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Corporate Innovation Methods

Methods to drive innovation within corporations, including open innovation, internal venturing, VCaaS, partnerships, intrapreneurship, and accelerators.

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Open Innovation

Incorporating external expertise and ideas into the innovation process.

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Corporate Accelerator

A company-run program that supports startups or internal projects with resources and guidance.

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Innovation Gap

The gap between the company’s current offerings and new potential products that could disrupt existing business.

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Intrapreneurship

Encouraging employees to think and act like entrepreneurs within the corporation.

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Customer-Driven Innovation

Incorporating customer feedback to improve products and services.

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Jobs to be Done

Identifying the problems customers need a product to solve.

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Limitations of Observation

Observing current behaviors and needs doesn't guarantee future desires.

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Design Thinking

A user-centric problem-solving process focusing on understanding user needs and experiences through iteration.

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Extreme Users

Users who exhibit unusual behaviors, either highly engaged or not engaged with a product or service.

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Empathy in Design

Understanding user needs and experiences by gathering data such as user interviews, observations, etc.

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Experiments in Design

Testing ideas through prototyping, trying new experiences and breaking down products for analysis.

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Ideate

Generating numerous design ideas, considering extremes, variations and high quantities.

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Prototype

Creating a basic, visual model of a product or service.

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Four Elements of a Good Idea

Understanding the problem (customer insights), problem size (trends), current solutions (conventions), and the new idea itself

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Limited Test Market

Testing a product with a smaller group or within a defined geographic area to gauge real-world reactions

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Interdependence Risk

The risk that an innovation's success depends on the successful development and deployment of other components in a larger solution. This risk is higher when an innovation relies heavily on other developments.

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Intermediary Adoption Cycles

The time it takes for intermediaries (like retailers or distributors) to adopt and integrate a new innovation into their operations, delaying its final market adoption.

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What is design thinking?

Design thinking is a human-centered approach to innovation that focuses on understanding user needs, generating ideas, prototyping, and testing solutions.

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How does design thinking help?

Design thinking improves understanding of users, facilitates data analysis for new insights, aligns teams on user needs, encourages fresh ideas, tests assumptions, offers user previews, and builds shared commitment.

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What makes design thinking social?

Design thinking involves collaboration and engagement throughout the process, allowing for collective understanding and decision-making.

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Simulations in Experiment Design

Simulations are used to test different aspects of a business idea (value proposition, product, etc.) before investing resources in a full-scale launch.

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Ideation Performance Factors

The effectiveness of generating ideas is measured by the number of ideas, their quality, the spread of that quality, and how well the best ideas are picked.

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Customer Interviews

Talking to potential customers to validate product ideas, understand their needs, and gather feedback on existing products.

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Prototype Iteration

Prototypes are not finished products; they are tools for gathering feedback and making improvements before investing in a final product.

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Prototyping in Design Thinking

Creating tangible representations of a product or solution to get early feedback, refine the idea through testing, and avoid wasting resources on poorly-defined concepts.

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Scope & Scale in Experiments

Determining how big or small a test should be to effectively measure its outcome, while keeping in mind available resources, time constraints, and potential risks.

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Diversity in Creativity

Incorporating a variety of perspectives, backgrounds, and ideas to spark more original and innovative solutions.

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Evaluative Research Limitations

Identifying the target customer group, creating insightful questions, and appropriately handling customer responses are crucial elements of effective evaluative research.

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Study Notes

Market S-Curve

  • A product initially experiences slow growth, followed by faster adoption and then saturation.
  • Established companies often struggle to adapt to new "switching S-curves" (emergent technologies).
  • It's difficult for them to abandon existing models and technologies, which concerns shareholders.
  • Disruptive innovation introduces a different set of attributes than mainstream customers value.
  • They appeal to niche markets in the beginning and eventually compete with the main customer segment.

Disruptive vs. Sustaining Innovations

  • Disruptive Innovations: Introduce fundamentally different attributes, often initially performing worse than mainstream products. Aim for niche customers and gradually challenge dominant players.
  • Sustaining Innovations: Improve existing attributes for core customers through incremental improvements.

Innovator's Dilemma

  • Established companies face a challenge when adopting disruptive innovations.
  • Overfocus on current customers, profitability concerns, and short-term thinking hinder their response.
  • Disruptive technologies initially appear less attractive because they don't immediately address the needs of the majority of consumers.
  • Switching existing business models and technologies is risky and often unpopular with shareholders.

Market Segmentation

  • Geographic (country, region)
  • Demographics (age, income, gender)
  • Psychographics (lifestyle, interests)
  • Behavioral (usage rate, loyalty)
  • Benefits sought (convenience, value)

Attractive Market Assessment

  • Customer acquisition costs
  • Competitive intensity
  • Customer satisfaction levels
  • Forecasted growth
  • Potential profitability
  • Barriers to entry

Driving Early Growth

  • Awareness: Increase product visibility through advertising and other marketing strategies.
  • Trial: Display product features, pricing, and availability to encourage initial purchase.
  • Availability: Ensure product accessibility through various channels.
  • Repeat: Exceed customer expectations to encourage continued usage and loyalty.

Innovator Considerations

  • Complementary Assets: Consider whether existing assets support value propositions.
  • Incumbent Development: Assess the likelihood of the incumbent stopping their development process.

Design Thinking Principles

  • Empathy: Understanding user needs and experiences.
  • Iteration: Continuous testing and refinement.
  • Solution-Focused: Emphasis on solving problems and developing creative solutions.
  • User-Centric: Prioritizing user needs in all design decisions.

Design Thinking Steps

  • Empathize & Define: Research users' needs and problems.
  • Ideate: Generate ideas and solutions.
  • Prototype: Create models of potential designs/solutions.
  • Test: Gather feedback and iterate on designs.

Advantages of Design Thinking

  • Early testing of assumptions.
  • Insights from consumer research (unavailable from third parties).
  • Increased buy-in from senior management.

Disadvantages of Design Thinking

  • Time constraints
  • Over-confidence
  • Organizational inertia ( Resistance to change)

Prototype Considerations

  • Tangible vs. intangible prototypes
  • Balancing clarity/accuracy with cost/flexibility

Extreme Users

  • Those exhibiting unconventional behaviors concerning a product.
  • Identifying extreme users can reveal problems that are more magnified versions of smaller issues faced by other customers.

Experiment Types

  • Analogues (simulations)
  • Virtual prototypes
  • Limited test markets
  • Scope-limited versions, to evaluate a product idea or a small segment.
  • Shared testing with potential partners
  • Simulations

Design Experiments

  • Evaluating scope and scale for an innovation.
  • Identifying constraints on events and resources.
  • Assessing particular risks associated with an experiment.
  • Maximizing business opportunities with the results of the experiment.

Concepting Phase

  • Defining problems after understanding consumers' needs.
  • Determining solutions satisfying those needs, after appropriate design requirements are fulfilled.

Idea Evaluation Factors

  • Number of generated ideas
  • Quality of generated ideas
  • Variance in quality of ideas (important)
  • Selection process for the best ideas

Diversity's Importance

  • Promotes greater creativity and innovation.

Prototyping Phase Considerations

  • Are solutions workable?
  • Modifications needed?
  • Tangibility through prototypes (important)
  • Balancing clarity/accuracy vs. affordability/flexibility.
  • Feedback for refinement of prototypes.

Evaluation Research Limitations

  • Identifying who to involve.
  • Formulating proper questions to ask.
  • Ensuring honesty of answers and participant engagement.

Observation Limitations

  • Limited insight into future desires, only current behaviors and intentions are observed.

Jobs to Be Done

  • Value proposition definition for a product or service.

Corporate Innovation

  • Open Innovation: Leveraging external resources.
  • Venture Capital as a Service (VCaaS): Partnering with external capital for startups.
  • Partnerships & Collaborations: Co-creating with other organizations.
  • Intrapreneurship: Fostering internal entrepreneurship.
  • Corporate Accelerators & Incubators: Support and resources for startups.
  • Innovation Labs: Dedicated internal units focusing on exploration

Reasons for Launching Corporate Accelerators

  • Closing the innovation gap
  • Building a community of complimentors
  • Expanding to new markets
  • Rejuvenating corporate culture
  • Attracting/retaining innovative talent

Startup Accelerator Participation Motives

  • Access to resources
  • Increased credibility
  • Access to markets
  • Funding opportunities

Successful "BEANS" Attributes

  • Simplicity
  • Fun
  • Trackability

Initiative Risks

  • Evaluating project feasibility, likely customer benefits, competition, and supply chain

Interdependence Risks

  • Identifying projects that depend on others' success.

Integration Risks

  • Understanding dependencies between innovations and customers.

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Description

Explore the dynamics of disruptive versus sustaining innovations in the marketing landscape. This quiz delves into the challenges established companies face when adopting new technologies and the impact of the market S-curve on product growth. Understand how disruptive innovations can change market dynamics and competitor strategies.

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