Contemporary Product Innovation Approaches

Introduction

Organizations need to be innovative because the ever-changing business environment demands it of them. The essay will focus on mass marketing products and incremental product innovations. Mass-marketing product innovation focuses on a target market and finds a way of making the most money from it as possible (Candelo, 2019). Incremental product innovation is more likely to benefit other organizations, as it involves modifying existing products to gain profits from a broader range of consumers (Bulut et al., 2022). The underpinning theory used in this essay is the Differentiation Theory. The fundamental strategy for a company to survive and prosper is to invent new products or improve the quality of the existing ones.

Discussion

The Differentiation Theory is defined as an affiliate of economics that suggests that firms develop new products by trying to differentiate their products from the products of existing competitors. The basic idea is that firms compete for a share of consumer demand, and the more they can offer in addition to the competition, the more profitable they can be (Lortie, Cox & Sproul, 2021). Mass-marketing product innovation through the differentiation theory enables firms to determine criteria for developing products based on differentiating attributes (Achrol & Kotler, 2022; Rauschnabel, Felix & Hinsch, 2019). Also, incremental product innovation through the differentiation theory enables firms to develop products the same way as the previous product, which is not new (Islami et al., 2020). The firms instead try to improve the quality of their products and features with little or no change in their external form without offering a new product (Davidsson, Recker & von Briel,2020). The basic idea is that firms compete for a share of customer demand, and the more they can offer something new, the greater profits are possible (Gilbert, 2022; Millar, Groth & Mahon, 2018). Thus, an internal analysis will yield certain advantages to enable companies to create and market products.

Mass-marketing product innovation is where companies attempt to create new markets through a strong marketing campaign and mass distribution. It means that both profit and value are increased by increasing the market size, hence increasing customer numbers (Charlesworth, 2022). The advantage of this approach is that most companies do not have to change their strategy as they will focus on one target market and work on only one product, thus saving money by cutting down labor costs (Marino, Resciniti & D’Arco, 2020; Mansour.2020). Incremental product innovation is where firms try to create a better existing product by improving its quality and distribution (Budanov & Aseeva, 2019). For example, Coca-cola has made money from its brand, and they do not change the recipe of its product all that much to maintain this customer loyalty. However, this brand also has many competitors, such as Pepsi, which makes it difficult for customers to choose between them as both have similar-tasting products (Fainshmidt et al., 2019). Thus, this approach will most likely benefit consumers looking for a more affordable product.

Incremental innovation can be defined as small and continuous changes to an existing product or service to sustain competitive advantage over the long run. Every time an increment is made to the product or service, it increases customer loyalty (Tuz and Sertyeşilışık, 2022). It keeps people returning to buy new products or services, providing them with returns on investment (ROI) across long-term goals (Clauss et al., 2021). For the example of Apple Inc., the creation of the iPhone was a collection of all these incremental changes put together to make one revolutionary phone. Therefore, the consumer would continuously buy the phone until a new phone is created that has more features and a better user interface.

The mass-marketing product innovation approach plays a vital role in organizations today because of profit. It can give the organization more profit from a large group of consumers than they would get by targeting a small group of consumers (Thomas, 2019; Ali & Anwar, 2021; Dinesh & Sushil, 2022). The second reason is because of customer loyalty. Loyal customers will not want to change their current provider, so they will stick with their original provider (Almohaimmeed, 2019). The incremental innovation approach plays a vital role in organizations today because businesses can make small changes to their existing products and gain profit from a larger group of consumers. (Aityassine, 2022; Danso et al., 2019). For example, Apple Inc. offers a wide range of products with different editions and standards for an equal price.

Conclusion

In conclusion, product innovation plays an essential role in organizations today as it attracts and retains customers to the products sold. The gap between product revolution and product evolution is becoming narrower and narrower as many companies are starting to adopt the strategy of a combination of both approaches. They are blending both types of innovation in a way that will give them the best results.

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