Understanding Innovation

• Innovation is creating value from ideas.

Six Aspects of Innovation:

• Identifying or creating opportunities (e.g., Airbnb).
• New ways of serving existing markets (e.g., mobile ordering apps).
• Growing new markets (e.g., Tesla electric cars).
• Rethinking services (e.g., decreasing computer size).
• Meeting social needs (e.g., Instagram and Twitter).
• Improving operations (e.g., robotics in manufacturing, mining, and medicine).

Seven Sources of Innovation:

• Unexpected occurrences: Events altering consumer needs.
• Incongruities: Gaps between product offerings and expectations.
• Process needs: Innovations increasing efficiency and reducing repetitive tasks.
• Industry and market changes: Improvements in technologies, economies, and regulations.
• Demographic changes: Shifts in population size, age, location, education, or income.
• Perceptual changes: Changes in customer preferences and acceptance over time.
• New knowledge: Innovations driven by scientific discoveries.

Incremental vs. Disruptive Innovation:

• Incremental innovation improves existing products (e.g., petrol cars to hybrid cars).
• Disruptive innovation changes the market entirely (e.g., electric cars).

Four Dimensions of Innovation:

• Product: Changes in physical goods.
• Process: Changes in how products are delivered.
• Position: Changes in the product's context.
• Paradigm: Changes in the product's underlying model.

Creativity

• Creativity is the production of new and useful ideas.

Nature of Creativity:

• Association between problems and ideas.
• Uses both incremental and radical ideas.
• Employs divergent (exploring) and convergent (focusing) thinking.
• Utilizes both left and right brain functions.
• Pattern recognition.
• Can be an individual or group activity.

The Creative Process:

• Recognition: Identifying the problem.
• Incubation: Allowing ideas to develop.
• Insight: Achieving a deep understanding; seeking expert advice.
• Refinement: Testing and improving solutions.

Three Components of Creativity:

• Creative thinking: Approaches to problems and solutions.
• Knowledge: Acquired from education, experience, and interaction.
• Motivation: Determination to act.
  • Intrinsic motivation: Enjoyment of work.
  • Extrinsic motivation: Financial rewards.

Knowledge Development During Entrepreneurship:

• Creativity Stage: Knowledge in raw form.
• Innovation Stage: Knowledge refined for feasibility.
• Entrepreneurial Stage: Knowledge implemented in a product/service.
• All three stages involve knowledge development.

Screening Opportunities:

• Product Feasibility: Can it be made with current tech?
• Market Feasibility: Does it have desired features/value?
• Economic Feasibility: Can it be profitable?

Creative Techniques:

• Problem Reversal: Viewing the problem from an opposite angle.
• Forced Analogy: Linking two unrelated things for new insights.
• Attribute Listing: Identifying and listing product attributes.
• Mind Map: Visually mapping information.
• Brainstorming: Generating ideas in a group.

Marketing

• Marketing involves creating, communicating, delivering, and exchanging offerings that have value for customers, clients, partners, and society.

The Evolution of Marketing:

• Exchange: Trading goods for needs.
• Production Oriented: Buying what is available.
• Sales Oriented: Increasing profits through advertising.
• Market Oriented: Making products that suit consumer wants.
• Societal Market Orientation: Minimizing negative societal impact.

Applications of Marketing:

• Used by businesses, non-profits, and governments.

Marketing Perspective:

• Left Brain (Science): Understanding customer needs using information.
• Right Brain (Art): Developing unique, creative offers.

The Marketing Process:

• Involves understanding the market to improve offerings.

Value Definition:

• Value = Quality / Price
• Value = Benefits Expected / Benefits Received

Market Definition:

• A market is a group of customers with needs and wants.

Market Groups:

• Customers: Purchase goods/services.
• Consumers: Use the goods/services.
• Clients: Customers of non-profits.
• Partners: Involved in the exchange process.
• Society: Members of a community.

The Marketing Environment:

• Includes all internal and external factors.

Environment Types:

• Internal: Controllable elements inside the organization.
• External: Uncontrollable elements outside the organization.

The Micro Environment:

• Not directly controllable.
• Includes customers, clients, partners, and competitors.

Understanding the Micro Environment:

• Need to understand current and future target market needs
  • Customers & clients
    • understand the current and future needs and wants of their target market
  • Partners: Logistic firms, financiers, advertising agencies, retailers, wholesalers, suppliers
  • Competitors:

Types of Competitors:

• Pure Competition: Many businesses sell the same product (e.g., sugar).
• Monopolistic Competition: Many businesses sell similar but differentiated products (e.g., laptops).
• Oligopoly: Few large companies dominate (e.g., airlines).
• Monopoly: One supplier (e.g., government-run roads).
• Monopsony: One buyer controls the market (e.g., government buying submarines).

The Macro Environment:

• PESTEL framework:
  • Political, economic, sociocultural, technological, environmental, and legal forces.
    • Political forces
      • describe the influence marketing decisions
      • lobbying, favourable regulation, etc
    • economic forces
      • factors that affect how people can spend and how they choose to spend it
      • include income, prices, the level of savings, the level of debt and the availability
    • Sociocultural force
      • affects people attitude, belief, behaviours, preference, customs and lifestyle
    • Technological forces
      • better way of doing things
      • suppliers work
    • Environmental forces
      • natural disaster etc
      • logical awareness and social changes influence how firms will operate
    • Legal forces
      • Laws— legislation enacted by elected officials
      • Regulations— rule made under authority delegated by legislation.

SWOT Analysis:

• Evaluate internal and external factors.
  • Marketing metrics

Components:

• Strengths: Attributes that help achieve objectives (internal).
• Weaknesses: Attributes that hinder achieving objectives (internal).
• Opportunities: Factors that help achieve objectives (external).
• Threats: Factors harmful to achieving objectives (external).

The Marketing Plan:

• Executive summary
• Introduction
• Situation analysis (SWOT)
• Objectives (SMART)
• Target market
• Marketing mix strategy
• Budget
• Implementation
• Evaluation (marketing metrics)
• Conclusion/future recommendations