{"id":3882,"date":"2021-01-27T08:27:26","date_gmt":"2021-01-27T08:27:26","guid":{"rendered":"https:\/\/www.revuze.it\/?p=3882"},"modified":"2021-01-27T08:27:26","modified_gmt":"2021-01-27T08:27:26","slug":"what-is-product-innovation","status":"publish","type":"post","link":"https:\/\/www.revuze.it\/blog\/what-is-product-innovation\/","title":{"rendered":"What Is Product Innovation and why is it so important for brands (2022)"},"content":{"rendered":"\n

What Is Product Innovation?<\/h2>\n\n\n\n

Every year, tens of thousands of new consumer products are launched in the United States. But how many of those products survive the ultra-competitive market? According to Harvard Business School<\/a> professor, Clayton Christensen, 95% of those new products fail.<\/p>\n

[banner_text text=”Check product rank by sentiment analysis” button_text=”Get started” button_link=”https:\/\/www.revuze.it\/top-product-ranking\/”]<\/span><\/h2>\n\n\n\n
\"5%<\/figure>\n\n\n\n

This figure shows how crowded and competitive today\u2019s market really is, and also how aggressive one must be to succeed in it. Yet, being aggressive is not really the single, main secret for success in this case; product<\/strong> innovation<\/strong>, instead, is probably a more accurate keyword for those who want their product to be among the successful 5%.<\/p>\n\n\n\n

If your product or solution is innovative, you\u2019ve got a much higher chance to survive and thrive. In this article, we\u2019ll explore the definition of product innovation, how we can see and identify innovation, and how we can measure it. But what is product innovation? and how can it be done smartly? Let’s find out.<\/p>\n\n\n\n

June 2020 update: We have just released a new tutorial video on how to conduct product innovation <\/a>research with Revuze – make sure to check it out and leave us your feedback!<\/p>\n\n\n\n

Product Innovation Definition<\/strong><\/h2>\n\n\n\n

First and foremost, the definition: Product innovation represents a new way of solving a problem a high number of consumers have<\/strong>. There may be no products at all on the market that address the issue, or there may be other products already on the market that address it in a different way.<\/p>\n\n\n\n

In order to consider your product or solution innovative, you must be able to answer \u201cyes\u201d to all of the following three questions<\/strong>:<\/p>\n\n\n\n

    \n
  1. Is the product relevant<\/strong> for a significant number of consumers (whether you\u2019re looking into a mainstream or niche market)? This applies especially to products that address issues that have not been addressed before.<\/li>\n
  2. Is the product better<\/strong> than its competitors? If so, what\u2019s the improvement\u2014design, technology, useability, etc.?<\/li>\n
  3. Is the innovation or uniqueness of the product obvious<\/strong>? Is it easy to explain to consumers why this product is necessary or better than its predecessors and competitors? While the answer may not always be an easy \u201cyes\u201d, this point is really important for the marketing experts who will help you with the product launch.<\/li>\n<\/ol>\n\n\n\n

    It takes a village<\/strong> to develop and launch an innovative product\/service in today\u2019s market\u2014from the engineers to the manufacturing experts, from the marketing consultants to the legal experts, you\u2019ll need everyone\u2019s help to make sure you\u2019re part of the 5%.<\/p>\n\n\n\n

    \"Product<\/h2>\n

    The Types Of Product Innovation<\/strong><\/h2>\n

    There are plenty of different ways you can go about developing a product, but broadly speaking you can split them into three categories; creating new products, improving existing products, and creating new product features. Let\u2019s take a look at what each type is and how it might function.<\/span><\/p>\n

    New Product Development (NPD)<\/strong><\/h3>\n

    NPD is, shockingly, the development of new products. This can be anything from a radical innovation that completely shakes up the market, to incremental changes that result in new models so radically different they can\u2019t be compared to the original.<\/span><\/p>\n

    Big ideas and grand designs are definitely a way to get to the top of the market, just look at Apple and their innovative smartphone design that combined features that previously had to be on separate devices, but in practice these rarely turn out to be successful. While your product design might be more useful overall than existing products, it will take a lot to get consumers to shift to it. Apple was successful not only because of their new design, but because they marketed it exceedingly well.<\/span><\/p>\n

    One of the key success factors in developing new products is idea management, or the process of taking your ideas and turning them into strategies and insights. It\u2019s no good having an amazing idea if you can\u2019t put pen to paper and spell it out, after all.<\/span><\/p>\n

    Product Improvement<\/strong><\/h3>\n

    You\u2019ve probably seen updates to mobile or PC applications, new models and versions of types of smartphone – these are all examples of improving an existing product. Generally speaking, this type of change is slow and incremental.\u00a0<\/span><\/p>\n

    It can often take years and several iterations for products to have enough new features to be considered worth replacing your old ones, but your goal with this type of product innovation isn\u2019t strictly to replace all of your older models, merely offer the option for those who need it. Take the iPhone as an example – to a person who just wishes to make calls, texts and browse the internet, the iPhone 5 is still perfectly usable despite being released a decade ago.\u00a0<\/span><\/p>\n

    Overall, product improvement is something that comes in cycles. You will rarely see a product and call it complete, especially as advancements in technology are made and new possibilities open up. Iterative improvement is the term often ascribed to this process.<\/span><\/p>\n

    Creation of New Features<\/strong><\/h3>\n

    Creating new features on a product takes the philosophies of both the above categories and combines them. You get the advantage of new and exciting product capabilities, but retain the brand and model name that make consumers recognise you.\u00a0<\/span><\/p>\n

    Adding new features is risky, since more often than not you\u2019ll either have to cut existing ones that consumers may be attached to, or increase the size and\/or complexity of your product in order to allow the new feature to take its place.<\/span><\/p>\n

    Going back again to the iPhone, many customers were repulsed by Apple\u2019s decision to remove the headphones jack in 2017, which they saw as a thinly veiled attempt to push them to purchase the Airpods that were released around the same time.\u00a0<\/span><\/p>\n

    While the new iPhone model was definitely slim and had great bluetooth connectivity, consumers didn\u2019t see it as worth upgrading when they\u2019d have to replace their wired headphones too and many simply <\/span>turned away<\/span><\/a> from Apple. An important lesson in product innovation that Apple doesn\u2019t seem to have learned – consider the features your customers want, rather than need.<\/span><\/p>\n

    Why Is Product Innovation Important?<\/strong><\/h2>\n\n\n\n

    Product innovation is important because it can help you create new spaces in a seemingly crowded market. By identifying the gaps and imposing yourself into a new space, you can find an audience and satisfy consumer needs in a way that is new and refreshing.<\/p>\n\n\n\n

    It\u2019s also important to note that product innovation doesn\u2019t always involve the creation of a completely new product that addresses a completely new issue. For sure, when the first iPhone was launched, it established a previously non-existing market and satisfying needs that consumers didn\u2019t even know they had. Same with Kindle: Not only the first model succeeded (launched in 2007, it sold out in less than 6 hours); but Amazon managed to re-invent it with new models, for instance, introducing the touch-screen.<\/p>\n\n\n\n

    Innovation may happen when you improve an existing product<\/strong> or you add a new feature to an existing product<\/strong>. When phones got cameras, they gained a new feature; or when Apple dramatically improved the quality of iPhone cameras in the iPhone 11 Pro, that was an innovative move.<\/p>\n\n\n\n

    Of course, when we talk about innovation, we don\u2019t refer only to products, but also to services<\/strong>, processes<\/strong>, or business models<\/strong>. Those are a little less obvious, but they can be just hugely lucrative and successful. Airbnb, Uber, and Netflix are examples of huge innovations.<\/p>\n\n\n\n

    \"Product
    Innovative products Examples – Amazon’s Kindle and Apple’s iPhone<\/figcaption><\/figure>\n

    How to Measure Innovation?<\/strong><\/h2>\n\n\n\n

    There are several metrics you can use to measure innovation; some are more straightforward than others. Commonly, businesses use sales and return on investment (ROI) metrics to measure the success of a new product. However, those metrics apply only when the new product has already been launched.<\/p>\n\n\n\n

    So how can you measure innovation prior to the product launch, for instance, when you are still developing the product or you have a prototype ready? How can you be sure there is an audience for your new solution? And how can you prepare for a smooth product launch?<\/p>\n\n\n\n

    Market research is the top answer to that question. Gaining a clear understanding of the market, the consumers, and your competition will grant you an enormous advantage when it comes to a product launch.<\/p>\n

    [banner_text text=”1B product insights at your fingertips.” button_text=”Get started” button_link=”https:\/\/sentimate.com\/signup\/”]<\/span><\/p>\n

    Obstacles To Product Innovation<\/strong><\/h2>\n

    Of course, not everything is straightforward when it comes to product innovation. Most ideas that are thought up are rejected for one reason or another, so don\u2019t be disheartened if your first idea falls flat. Let\u2019s look at some of the reasons why product innovation might be stifled.<\/span><\/p>\n

    Testing<\/strong><\/h3>\n

    When you want to launch a new product or version of a product, you\u2019ll first need to prove that it\u2019s superior to the existing options that are available, both from you and from other organizations in the market.<\/span><\/p>\n

    This is where product testing comes in. Unfortunately, a superior design on paper might not prove to be so high and mighty in the real world, with design flaws and unexpected challenges cropping up. It\u2019s always important to test your product, but you might not like the results.<\/span><\/p>\n

    At the end of the day, whether product innovation goes forward isn\u2019t down to the design team. The ones in charge are the executives, the stakeholders, the ones who hold all the funding and ultimately choose what does and doesn\u2019t go through. No matter how brilliant your innovation, if they aren\u2019t impressed by the tests you\u2019ll need to go back to the drawing board.<\/span><\/p>\n

    Cost<\/strong><\/h3>\n

    It\u2019s not uncommon for products to end up costing far more than the estimates you make at the beginning. There are two types of costs you need to think about here – production costs and development costs.<\/span><\/p>\n

    Production costs are those associated with actually producing the product. Raw materials, any external software that you\u2019d need to add, the costs of running the production line – these all add up. The higher the production cost, the higher the cost of the product.<\/span><\/p>\n

    Development costs are something different. You can think of them as the costs of designing, testing and re-adjusting the product into its final form. This can be in the form of raw materials for prototypes, but a large proportion generally comes from paying the product development team to do their work.<\/span><\/p>\n

    All these costs add up, and given we live in a world fundamentally driven by the dollar it\u2019s no surprise that some products will end up getting pulled because of costs. You can have a fully functional product ready to be added to the assembly lines, but if the profit margins aren\u2019t going to be big enough to make up the costs, most businesses will simply take the loss and move on to something more promising.<\/span><\/p>\n

    Pricing<\/strong><\/h3>\n

    Another factor that\u2019s related to, but not directly synonymous with cost, is pricing. Putting the right price on your products means that the scales will tip in your favor and more consumers are likely to buy your products.\u00a0<\/span><\/p>\n

    Pricing is something that you need to think about early on, since where you situate your product within the market is likely to determine how much you\u2019re willing to put into its development costs. A low cost product is fine to go on the market with faults, whereas a higher cost product needs more refining.<\/span><\/p>\n

    Pricing will also determine the overall acceptable level of production costs for your product. If the cost is too high your profit margin will be low, meaning the people who make the decisions will be hesitant to put it on the shelves.\u00a0<\/span><\/p>\n

    Targeted Innovation<\/strong><\/h3>\n

    No matter what it is you\u2019re creating, you need to be sure that customers will use it. A poorly adapted product is one that has a lot of interesting features and uses, but lacks those that are actually useful.\u00a0<\/span><\/p>\n

    Imagine for a second, a machine that makes screws, situated in a factory. It has options for different metals, different threadings and different sizings. That\u2019s all that the factory uses, and all that it needs. A new machine which has different settings for changing the color of the resultant screws, altering what screwdriver you would need to use, etc. would be completely irrelevant.\u00a0<\/span><\/p>\n

    Improvement for improvement\u2019s sake doesn\u2019t always yield results that the general public will find necessary or even useful, meaning you\u2019ve wasted all that you\u2019ve put into your design.<\/span><\/p>\n\n\n\n

    The Process of Product Innovation<\/strong><\/h2>\n

    Blue Oceans<\/strong><\/h3>\n

    The term \u201cblue ocean\u201d was introduced into the discourse by two professors named W. Chan Kim and Ren\u00e9e Mauborgne in their book entitled \u201cBlue Ocean Strategy: How to Create Uncontested Market Space and Make the Competition Irrelevant.\u201d They define blue oceans as unexplored market spaces associated with high potential profits.<\/span><\/p>\n

    A popular example of a blue ocean was the legal music download market before iTunes was launched by Apple in 2001. Prior to the launch, millions of people were illegally downloading music from the internet; iTunes allowed consumers to digitally purchase the music, an option that didn\u2019t exist before.<\/span><\/p>\n

    Similarly, Pandora was the first freemium music streaming service as we know Spotify, Tidal, and Apple Music to be today; its creators identified a \u201cblue ocean\u201d in the market and launched it in 2005.<\/span><\/p>\n

    Not everyone can identify a blue ocean, and these types of opportunities do not arise on a daily basis. That\u2019s why innovators also keep their eyes open for gaps in specific sectors of the market; gaps are opportunities, small voids in an existing or seemingly filled market. Gaps are often specific \u201cservices\u201d that established businesses do not offer yet. You can therefore emulate the existing business model and add the new service.<\/span><\/p>\n

    New Product Development (NPD)<\/strong><\/h3>\n

    As touched on earlier on, new product development is tricky to get right. Anyone can launch a product, but very few people can do it successfully.<\/span><\/p>\n

    NPD is a process which organizations use to take their ideas from concept to finished, marketable product. It consists of seven steps, each of which follows on from the last:<\/span><\/p>\n