This module is organized into three lessons:

 Product Understanding and Marketing

(Product and Services Concept)
 Finding your Innovation: Crafting a Great
Value Proposition
 Developing Winning Products
Welcome to the last module of this course, this
will lead you to examining the innovation
process and quickly transition into exploring
how to successfully bring innovations to
market, develop insights on navigating the
innovation process from idea generation to
commercialization and build knowledge on how
to create strategies to bring innovations to
market.
 Upon successful completion of this module, you will
be able to:
- Distinguish the commercialization process with an
emphasis on research based product planning and
market segmentation;
- Discuss the importance of innovation;
- Identify the fundamentals of innovation and
commercialization; and
- Understand the nature of the value of an innovation
Let‘s begin. Good Luck!  
  Understand value creation through
innovation
 Discuss the methods and importance of
market segmentation
 Explain the product understanding
 Introduction
Welcome students to the first lesson of this
module. In this module, will discuss the
importance of knowing the products and
understanding its value. Have fun and enjoy
learning!
 Creating Value to Innovation
 Increasing business value through innovation
is important for the organization‘s success.
 Innovation challenges
faced by organizations can be addressed and
examined by frameworks which lead to value
being generated by the ideation
process.
Innovation performance frameworks such as the
following help organizations create values
through innovation:
 Product innovation strategy
 Portfolio management
 Idea-to-launch process
 Climate and culture
The objective of business innovation
 The objective of business innovation is simple yet
powerful: it is to create, deliver and capture value through
innovation.
 Let‘s examine what value creation,
delivery and capture entail:

 Create Value- Feasibility is one objective of business

innovation.
- The important questions to ask are what the product or
service does, how is it made, and how do you build it.
 Deliver Value
 Interest should also be considered.
- Who is the intended market of the product or
service?
- How do you get them and catch their
attention?
- How is the sale completed?
 Capture Value
- Profitability, repeatability, and scalability of a product
or service should not be ignored.
- Business innovation is a deciding factor for an
organization‘s success or failure.
- Organizations that get comfortable with the norm or
their usual ways of doing things
and avoid changes get left behind and eventually fail.
- This is the powerful message of
business innovation.
 Importance and Methods of Market
Segmentation
 Market segmentation is fundamental aspect
of marketing.
 We can describe all markets as
heterogeneous, meaning that they all consist
of many different individuals, whose
preferences and personal needs may vary.
 Segmentation's main purpose is to
address those differences by separating
customers into sets based on variety of factors.
  Nowadays, even the most niche products are
accessible by customers all over the world

- addressing them in relevant may be a key to

success of one's company.
 It is growingly difficult to a deliver a highly
desirable product due to market saturation
and well established competition

- focusing on a particular subset of customers

and adapting our marketing to fit their
expectations seems to be a valid approach.
 Market segmentation can also affect and even
form the basis for the rest of marketing
strategies and techniques

- knowing the specific target group on the early

stage may influence (and improve) other aspects
of it.
 Advantages of market segmentation
 precise targeting of markets/customers reduces cost of
marketing activities and
leads to more optimal resource utilization - aiming at
specific subsets can cause
the developed mechanisms to be reusable and

- minimizes the chances of

dramatically changing the previous, possibly
mismatched approaches
 provides technique for better strategic decision
– when more specific cases are taken into
consideration, the inaccuracies of some
assumptions may become emphasized and some
particular practices may turn out to be clearly
non applicable
 employees can better understand customer, its
needs and reflect to overall atmosphere and
concerns among the group, they can also provide
more immediate response to constantly
changing expectations
 R&D department can create new products for
specific segments of the market
– within a smaller range of product users the
field for improvements and
innovations may be more distinguishable

 competition in smaller market segments can be

less strong
 various marketing activities can be more
focused – with the knowledge of target
market sector the demands and requirements
(and therefore relevant techniques)
are more apparent and clear

 effective market strategy leads to higher

customer satisfaction
 specialization on smaller market is easier to achieve
 brand-awareness is easier to build within a smaller
group of clients
 segmentation improves functioning of marketing
information system
 communication with customers is more effective -
various forms and channels
of communication are relevant, depending on the
target group
Importance of different types of segmentation
 Different types of segmentation may have
different impact on company's marketing
strategies. Examples include:

1. Geographic segmentation - customers

preferences and distribution issues may
vary in different locations
2. Demographic segmentation - perhaps the most
natural - customers of different age and gender
clearly have different habits and expectations

3. Psychographic segmentation - considering

particular groups of people divided by lifestyle may
provide a lot of information about their doubts and
attitudes towards our product and its field
Understanding the Product Creates Sales
Success
 Knowledge vs. Understanding
 Product knowledge vs. product
understanding is quite similar to the contrast
between features and benefits. And just as
―features tell, benefits sell,‖ a salesperson who
focuses on product knowledge without product
understanding misses the mark.
For example,
 someone who sells cars probably knows all
about the latest model's acceleration features,
the available paint colors, and whether it
comes with a V6 or V8 engine.
 All of the above come under the category of
product knowledge. But the salesperson who
understands his product knows what each of
those factors will mean to different prospects.

 He knows that high acceleration will be attractive

not only to the teenager who yearns for speed
but also for the suburban mom who wants to be
able to safely merge onto a busy freeway.
 Use the Product
 The best way to make the leap between
knowledge and understanding is to use the
product yourself. If your company gives you
access to your products for free, then, by all
means, take as many as you can and use them
as much as possible.
 If you can also get copies of your competitor's
models, so much the better – you'll be able to
explain exactly how your product is different
and better.
 In many ways, product understanding goes
hand in hand with prospect understanding.
 The more information you have about both
your products and your potential customers,
the better you'll be able to fit one to the
other.