1) Continuous innovation Business development is among the most essential aspect of any company.

The marketing teams biggest concern is how to gain new customers while making sure the existing customers are satisfied. Frequently updated marketing messages can garner a lot of attention and gather new customers but it can also disable companies that dont concentrate on their core competency. Knowing that few companies can do many things well, successful marketers consistently narrow their focus to retain market leadership in one or two core areas. From a marketing standpoint, there are these three most common categorized focuses in response to different business strategies: Cost-Leadership: Delivering messages of efficiency and low price points. Superior Service: Marketing in a customer friendly way, by delivering what customers want with hassle-free service and value. Continuous Innovation: Surprising consumers with functional, and emotional creativity. Continuous innovation sounds very exciting, yet it demands great dedication to change change and change: Innovate or Die! Marketing for a radical innovation can be high risk and before marketing a new product/service, you always want to ask yourself these questions: How do I convince the market that this new product/service would better fulfill their needs? How do I overcome the resistance to change among my customers? Innovations come in different degrees. A continuous innovation includes slight improvements over time. Very little usually changes from year to year in automobiles, and even automobiles of the 1990s are driven much the same way that automobiles of the 1950 were driven. A dynamically continuous innovation involves some change in technology, although the product is used much the same way that its predecessors were usede.g., jet vs. propeller aircraft. A discontinuous innovation involves a product that fundamentally changes the way that things are done e.g., the fax and photocopiers. In general, discontinuous innovations are more difficult to market since greater changes are required in the way things are done, but the rewards are also often significant. Several factors influence the speed with which an innovation spreads. One issue is relative advantage (i.e., the ratio of risk or cost to benefits). Some products, such as cellular phones, fax machines, and ATM cards, have a strong relative advantage. Other products, such as automobile satellite navigation systems, entail some advantages, but the cost ratio is high. Lower priced products often spread more quickly, and the extent to which the product is trialable (farmers did not have to plant all their land with hybrid corn at once, while one usually has to buy a cellular phone to try it out) influence the speed of diffusion. Finally, the extent of switching difficulties influences speedmany offices were slow to adopt computers because users had to learn how to use them. 2) Why do most new products fail? Of the many factors that influence product success or failure, the most common one is competence, i.e., management's failure to understand consumer needs and wants. But competence would presumably increase with the use of new marketing techniques because that was what the techniques were designed for. What can account for the fact that it apparently does not? Marketing managers responsible for new product decisions are typically very experienced. They usually have marketing research information about the new products, often of good quality, and they want new products to succeed. Perhaps it is this very "want" on the part of managers that partially explains high and constant new product failure rates. Perhaps managers are not so much failing to understand consumer needs as failing to see just how many consumers have this need. Indeed, the most common public statements by managers about new product introductions are those concerning market size. Many times products that seem to others to be clear niche products are touted by managers as mass-market breakthroughs. It seems as if managers' views are influenced by their closeness to the product.

Research in decision making has consistently shown that ego-involvement , selective perception, wishful thinking and optimism can lead to biases in the direction of wants. Similar results obtain from studies of vested interest, illusion of control, overconfidence and risk taking. Thus, marketing managers are predisposed to think in terms of product success, not product failure. Consequently, marketing managers usually overestimate product demand because of the way they interpret evidence for the products they care about most. This tendency provides a partial explanation for high and constant new product failure rates. They would remain high due to continual overestimation and not to the lack of success of marketing research techniques. New products that do not fulfill consumer needs or wants will fail. To reduce the chance of failure, product managers use tools to help identify consumer attitudes and preferences. These tools range from simple market surveys to sophisticated conjoint studies and pre-test market models. Managers can examine the findings from these studies or models before making a decision to continue with product development, test market a product, or attempt full-scale commercialization. Since product managers usually have profit and loss responsibility for new product introductions, they are ego involved. If the product is a pet project, they have even more ego involvement. In this way, the product is personalized. So managers are almost always too ego involved with their products, almost always overestimate demand and almost alwayssince by definition overestimated demand increases the chance of product failurehave products that fail more than succeed. (Recall that about 85% of new consumer packaged goods fail.) We can see that marketing managers face several obstacles in making good marketing decisions with respect to new products. It seems facile to say reduce your bias and oversimplified to say get an outsider's view through third-party counseland yet that is precisely what managers should do. The most obvious solution to the problem of ego involvement is to have a third party review the market research data or even the product concept itself. Research has shown that when this is done the results are more objective. Many times, however, outside consultants add to the problem because of their own incentives to "please" the client. Here's our top 10 list of reasons new products and services fail: Marketers assess the marketing climate inadequately. The wrong group is targeted. A weak positioning strategy is used. A less-than-optimal "configuration" of product or service attributes and benefits is selected. A questionable pricing strategy is implemented. The advertising campaign generates an insufficient level of new product/new service awareness. 7) Cannibalization depresses corporate profits. 8) Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world. 9) The marketing plan for the new product or service is not well implemented in the real world. 10) The marketer believes that the new product and its marketing plan has died and cannot be revived, when, in fact there is the potential for resurrection. 3) Stage gate scheme of new product development The Stage-Gate system breaks the new product project into discrete and identifiable stages, typically four, five, or six in number. Each stage is designed to gather information needed to move the project forward to the next gate or decision point. Each stage is multi- or crossfunctional: There is no R&D stage or marketing stage. Rather, each stage consists of a set of parallel 1) 2) 3) 4) 5) 6)

activities undertaken by people from different functional areas within the firm, but working together as a team led by a project team leader. In order to manage risk via a Stage-Gate scheme, the parallel activities within a stage must be designed to gather vital information (technical, market, financial, and so on) in order to drive down technical and business uncertainties. Each stage costs more than the preceding one, so that the game plan is one of incremental commitment. As uncertainties decrease, expenditures are allowed to mount. Finally, flexibility is built in to promote acceleration of projects. In order to speed products to market, stages can overlap each other; long lead-time activities can be brought forward from one stage to an earlier one; projects can proceed into the next stage, even though the previous stage has not been totally completed; and stages can be collapsed and combined. Here the five key and overlapping stages are as follows: Stage 1. Preliminary Investigation: a quick investigation and scoping of the project. Typically, this stage is undertaken by a very small core team of technical and marketing people; it includes the first-cut homework, such as preliminary market assessment, preliminary technical assessment, and preliminary business assessment. Stage 2 includes market research (a user needs and wants study to identify requirements for the ideal product; competitive analysis; and a concept test to confirm purchase intent); detailed technical and manufacturing assessment; and a detailed financial and business analysis. This stage should be undertaken by a core team of marketing, technical, and manufacturing people the beginnings of the ultimate project team in Stage 3. Stage 3. Development: the actual design and development of the new product. Here the development plan is implemented; a prototype or sample product is developed; and the product undergoes in-house testing along with limited customer testing (for example, rapid-prototypeand-tests with potential users). Additionally, the manufacturing process and requirements are mapped out; the marketing launch plan is developed; and the test plans for the next stage are defined. Stage 4. Testing and Validation: the verification and validation of the proposed new product, its marketing, and its production. This stage witnesses extensive in-house product testing; customer field trials or trials in the marketplace; pilot or preproduction trials in the plant; and even test marketing or a trial sell. The deliverable is a fully tested product and production process, ready for commercialization. Stage 5. Full Production and Market Launch: full commercialization of the product. Stage 5 marks the beginning of full production and commercial selling. This stage sees the implementation of the marketing launch plan, the production plan, and the post launch activities, including monitoring and adjustment. 4) Drop errors The drop error occurs when an idea that could have been highly profitable is eliminated from further consideration. How do we know that the idea could have been profitable? In a free market dropped ideas have the habit of being picked up by someone else. A decision to drop a PRODUCT from the line, or to discontinue development of a new product which subsequently proves to have been a premature decision, in light of successes achieved by competitors with similar developments. The converse of GO-ERROR. 5) Discontinuous innovation

Discontinuous innovation is very closely related to radical innovation. In fact, the two are often interchangeable. There are three important methods of achieving discontinuous innovation and one important consideration: a) Incremental innovations result in radical or discontinuous innovations. Small changes have big effects and the input of new knowledge can push thought into radical new directions. b) Starting over or creative destruction. It is hard to improve on the ball point pen or the pencil. Years of incremental improvements have not yielded a significant change. Starting over with no past memory would perhaps encourage a paradigm shift. c) Importing distant knowledge to affect the problem. Just as IT has influenced the way the publishing industry operates, so perhaps importing knowledge from a distant industry, such as laser technology, may help improve upon the ball point pen. Finally, it may be that once an optimal solution has been found, there is no going beyond that point. The pencil is almost an optimal solution - efficient, easy to make and cheap. Discontinuous Innovation is innovation that, if adopted, requires a significant change in behaviour. For example do you listen to your music on an MP3 player? Perhaps you are still playing compact discs or maybe you are still using cassette tapes or even LP records. Are you watching blue ray movies or are you still watching DVDs? Maybe you are still watching films on VHS (or even Betamax!) video-cassettes. All of the above technologies are examples of this type of innovation. That is to move to the latest technology results in you significantly changing your behaviour. One question often asked is that if we have to change our behaviour then why would we want to use such a new technology and the answer is that the new technology creates substantial new benefits for its users. Using the examples given earlier and thinking of the benefits To move tracks on an LP record you would have to lift the stylus and physically move it to the next track. Then came cassette tapes where you could now press a button on the player to move forward to the next track but it wasnt always easy to know when the next track started. Then came CD players, where you could select exactly which track you want or even let the player choose tracks at random for you. The latest technology is the MP3 player, which as well as having excellent track selection features they also enable you to keep your entire music collection all on one device or sort / file your music by genre and other categories. 6) Diffusion of innovations Diffusion is defined as the communication process by which a new idea or new product is accepted by the market, while the rate of diffusion is defined as the speed that the new idea spreads from one consumer to the next. Adoption, similar to diffusion, also deals with the psychological decision making processes of the individual, rather than those of an aggregate market. Everett M. Rogers showed that a diffusion process in a social system follows an S-Curve in which the adoption of a technology begins with slow change, is followed by rapid change and ends in slow change

as the product matures or new technologies emerge. He also held that people adopt new technological innovations at different times and at different rates. He then used the varying rates of adoption to distinguish different phases in the diffusion process allowing practitioners to assess such things as the life of a new product or service and the application of the correct set of marketing activities at the appropriate time. The adoption process tracked through the diffusion curve is a decision-making process in which an individual passes from the initial knowledge of an innovation to forming an attitude toward the innovation, to a decision to adopt or reject it, then to its implementation and the use of the new idea, and finally to confirmation of this decision. To make the model actionable, Rogers introduced innovativeness the degree to which an individual is relatively earlier in adopting new ideas than other members in a social system. This allowed Rogers to distinguished five groups of adopters as ideal types: 1. INNOVATORS The first 2.5% of adopters are called "Innovators". Innovators are venturesome and educated, have multiple sources of information and show greater propensity to take risks. They appreciate technology for its own sake and are motivated by the idea of being a change agent in their reference group. They are willing to tolerate initial problems that may accompany new products or services and are willing to make shift solutions to such problems. 2. EARLY ADOPTERS The next 13.5% of adopters are "Early Adopters". They are the social leaders, popular and educated. They are the visionaries in their market and are looking to adopt and use new technology to achieve a revolutionary breakthrough that will achieve dramatic competitive advantage in their industries. They are attracted by high-risk, high-reward projects and are not very price sensitive because they envision great gains in competitive advantage from adopting a new technology. They typically demand personalized solutions and quick-response, highly qualified sales and support. 3. EARLY MAJORITY The next 34% of adopters are formed by the "Early Majority". They are deliberate and have many informal social contacts. Rather than looking for revolutionary changes to gain productivity enhancements in their firms, they are motivated by evolutionary changes. They have three principles in the adoption of new technology: When it is time to move, lets move all together. This principle defines why adoption increases so rapidly in the diffusion process and causes a landslide in demand. When we pick a vendor to lead us to the new paradigm, let us all pick the same one. This principle explains which firm will become the market leader. Once the transition starts, the sooner we get it over with, the better. This principle shows why the transition stage occurs rapidly. 4. LATE MAJORITY The next 34% of adopters are the "Late Majority". They are skeptical, traditional and of lower socioeconomic status. They are very price sensitive and require completely preassembled, bulletproof solutions. They are motivated to buy technology just to stay even with the competition and often rely on a single, trusted adviser to help them make sense of technology.

5. LAGGARDS The last 16% of the adopters consists of "Laggards". Laggards are technology skeptics who want only to maintain the status quo. They tend not to believe that technology can enhance productivity and are likely to block new technology purchases. Rogers model has found wide appeal and application in such disciplines as marketing and management science. The models most significant application is the Bass Diffusion Model where the process of how new innovations are adopted through the interaction of current and potential users is described mathematically. 7) JIT just-in-time (JIT) Logistics systems designed to deliver parts to a production process as they are needed, not before. These days business is so fast, it's just a blur. Just-in-time (JIT) operations used to mean that the parts for your customized product sat in a warehouse for maybe a day -- but hey, you just cut your supply cycle time by 50 percent. JIT now means that the parts are not even moved off the truck they came in. The product is assembled, boxed up, labeled, and shipped using the same truck that carried the parts. Today's marketing works the same way. Your time to marketing needs to be cut in half for you to compete in this fast-forward economy. That's where JIT marketing comes into play. A Familiar Scenario Your closest competitor has just announced a major partnership, so you find yourself having to reposition your entire company to compete. Then you suddenly have to do an online advertising campaign to generate leads because the well has run dry and the phones aren't ringing, but the Web site messaging needs a complete overhaul. And you have to get out a three-dimensional direct mail piece because your sales team is two multimillion-dollar deals short of the quarterly goal. Time to marketing is crucial, but on the other hand you don't want to confuse your audience. Sound familiar? To the Rescue -- Just in Time Which comes first, the repositioning and messaging or the tactical elements of what you need right now? As an agency, we find ourselves in this position more and more, so we've developed JIT marketing, which is marketing developed, created, labeled, and shipped all in one process -- and in half the time it takes for the formal marketing process. It is a little scary to think about, because it sounds like a half-baked process, doesn't it? It's not. It is reality. The economy dictates the direction you are headed, and your marketing process must be able to respond quickly. JIT marketing is really a matter of developing the strategic positioning of a company while working on the tactical elements that will get the client through this quarter. The key to success is that it is an ongoing, fluid process. The process of developing a positioning statement or repositioning a company used to take at least three months if you wanted to do it right. There was always enough time for the due diligence of researching the industry and interviewing management and customers just to find the sweet spot in the marketplace. Nowadays those quadrant analyses of where the company will be the most profitable looks more like a shell game on Main Street: One false move, and you're sunk. A Never-Ending Process JIT marketing allows you to develop the positioning for a company that needs strategic and tactical marketing in about half of the usual time. Nothing is written in stone anymore. Research you do today had better be presented today because it will be old news tomorrow. Mergers, acquisitions, and partnerships will quickly make your findings obsolete.

We had done an in-depth competitive analysis for one of our clients. We could have continued the research forever but had to freeze the analysis in time because the minute you present your findings, a competitor's Web site completely changes or a new competitor shows up on your to-watch list due to a partnership that happened that morning. JIT market/competitive analysis should be a process that never ends. The research is done and sent to the client, and the process begins all over again -- all within the same breath. Interview, Interview, Interview Interviewing management separately -- and I emphasize separately -- is a vital part of the strategic positioning and the success of the tactical marketing. Find out who is really driving the repositioning, how much influence he or she has, and whether the repositioning is embraced by every person in management, from the CEO to the VP of marketing to the VP of sales. If only one of these people is not on board, it ain't going to work, folks. If management (or even one manager) doesn't embrace the repositioning, the company will suffer, in the short term and in the long. This is an area the agency has the least influence over. We can see it happening from the outside (and, boy, it looks ugly sometimes), but it is often difficult for someone on the inside to see. So those of you on the inside, it is time to do some soul searching on the mission and vision of the company. If it is dictated to you, embrace it. If it is a committee decision, embrace it. From a sales and marketing standpoint, it could mean the difference between money well spent or money down the drain -- not to mention time to market lost to your biggest competitor because of internal dissent. Interview prospects and customers. Each will have a different perspective on the company. Customers will give you input into what the company is like, and prospects will give you input into where the company is headed. Both will give you a good idea of the company's strengths, weakness, opportunities, and threats. The last three elements of positioning and messaging -- interviewing management, customers, and prospects -- used to take months, usually through face-to-face meetings. But as a part of JIT marketing, these can be done via phone, email, and video conferencing -- on the fly. The data you collect is typically not as good as that from a face-to-face meeting -- but hey, this is JIT marketing 8) The just price 9) Reference price People often compare a products price to a reference price that they maintain in their minds for the product or product category in question. A reference price is the price that people expect or deem to be reasonable for a certain type of product. Several factors affect reference prices: Memory of past prices

Frame of reference (compared to competitive prices, pre-sale prices, manufacturers suggested prices, channel-specific prices, marked prices before discounts, substitute product prices, etc.) Creating the most advantageous (and believable) competitive frame of reference is essential to achieving a price premium Prices of other products on the same shelf, in the same catalog, or in the same product line

 The addition of a more premium priced product typically increases sales of other lower-priced products in the same product line The way the price is presented for instance, absolute number versus per quart, per pound, per hour of use, per application, for the result achieved, etc.; also four simple payments of $69.95 versus $279.80; for automobiles: total purchase price versus monthly loan payment versus monthly lease payment The order in which people see a range of prices like when a realtor uses the trick of showing the poorest value house first.