Question

Types of New Products There are numerous ways to define and categorize new products. For example, you could compare the new product with existing products determine if it is functionally different from what is currently available. In many cases, most so-called new products are modifications or enhancements of existing products. Or, some existing ventures might simply add new products to its current offerings and would consider these offerings as “new.” But I argue that the best way to view new products is from the customer's perspective. In other words, examine how “disruptive” the new product is with regard to existing customer consumption patterns. Using this perspective, there are really only three types of new products:1 Continuous innovations. These are new products that will have little, if any, disruptive influence on existing consumption patterns. These new products generally involve minor product modifications (e.g., a new flavor, a new package) or simple product line extensions (e.g., light beer). Customers are already familiar with the basic product category and require little education regarding the new offering. In other words, there is an existing ritual and your goal is to have customers embrace your solution to that ritual. Dynamically continuous innovations. These new products will have some disruptive effect but still do not alter existing buying patterns completely. They may be new products but do not involve major technological breakthroughs or advances. For example, a new electric (or battery-powered) toothbrush that replaced a regular toothbrush did not necessarily completely change the teeth-brushing behavior of the customer but may have altered the way teeth are brushed. In other words, teeth-brushing is a well-established ritual but the general solution to complete the ritual was a regular toothbrush. The introduction of electric or battery-powered toothbrushes requires a tweak in the ritual and new learning. Discontinuous innovations. These are new products that involve major technological breakthroughs that create fundamental changes in consumer consumption patterns. And, in effect, they can create new markets. When the automobile was first introduced, it changed how we traveled. When the personal computer was introduced, it changed how we lived and worked. With discontinuous innovations, the customers have to be educated about the product in terms of how they will benefit from it and how to use it. This is a classic case of introducing a new ritual unknown to the customer and encouraging them to incorporate this new ritual into their lives. The reality is that most new ventures are built around new products that are either continuous innovations or dynamically continuous innovations. Very few ventures are built upon discontinuous innovations or new-to-world breakthroughs. In fact, some research indicates that about 80 percent of new products are simple continuous innovations, about 20 percent are minor innovations (dynamically continuous), and less than 1 percent of new products are truly discontinuous innovations. So, as we pointed out in earlier chapters, while “new market creation” can be the path to long-term sustainable growth for your venture, the truth is that most entrepreneurs build their ventures around continuous or dynamically continuously innovations and thus have to compete against existing alternatives that customers are well aware of. Therefore, you must really focus on how to convince the customer to embrace your new offering in light of the fact that the customer has an established consumption pattern (or current rituals as we discussed in Chapter 4). This is not the case with discontinuous innovation, where your task is to convince the customer to create an entire new consumption pattern with a completely unknown product—a new ritual altogether. Later in this chapter, you will see how the “newness” of a product affects the adoption and diffusion of products. Types of New Services I have argued for many years that creating and delivering new services is much more difficult than creating new tangible products.

Questions

1) The chapter identifies 3 different types of new products, one of which is called a "Discontinuous Innovation." What is a Discontinuous Product Innovation and provide an example which is not listed in the chapter?

3) The term "diffusion" refers to the manner in which customers accept new products/services and the speed in which customer groups adopt them. What are ways that an entrepreneur can enhance diffusion?

Answer 1

1) A discontinuous product innovation involves producing an entirely new product. It includes break-through innovation and caters to an entirely new aspect. It is a true game-changer which leverages the company far above it's competitors. Such a product is designed to facilitate a never-thought-before concept. For example, innovation of generating electricity or creation of rockets to explore space or bio-medical equipments.

2) An entrepreneur can enhance diffusion by :

• Rigorous marketing strategies to create awareness and  promote sales
• Arrange promotional events
• Provide customers samples to try, if possible
• Publish in famous magazines, related to the particular sector.
• Tie-up with dealers to facilitate information sharing
• Bill-boards or large hoardings at public locations.
• Hold informative training to related institutes or organizations.