Innovating products can provide added value, penetrate stagnant markets, and answer needs and shifting trends in new, interesting ways.
Unfortunately, not all companies are able to do this. Therefore, read this article to find out the goals, benefits and how to do it!
Understanding Product Innovation
More than thirty thousand new products enter the market every year but not many are able to survive the competition.
In an article, Professor Clayton Christensen from Harvard Business School said that 95 percent fail to face market competition.
This figure shows how crowded and competitive market conditions are today, so companies must be proactive in order to survive and win. One effort that can be done is to innovate products.
Harvard Business School also defines product innovation as the process of creating new products or improving existing products in order to meet customer needs in new ways.
It takes various forms, through improvements in design, materials, appearance, capacity, functionality and overall user experience.
Product Innovation Goals
This activity is not carried out without a definite purpose. The following are some of the company’s goals for product innovation.
1. Improve Quality
In general and most fundamentally, the goal of product innovation is to improve its quality.
This ensures that product quality does not become obsolete and is still able to meet current market needs so that the company’s capabilities remain relevant, keeping pace with current trends.
2. Meet Customer Needs
Driven by continuously developing trends, customer needs as individuals continue to change. They raise new expectations that encourage companies to be able to fulfill them.
3. Encourage Growth and Profitability
Carrying out product innovation can also create new revenue streams and increase overall company profitability. This allows the company to continue to grow and conquer the market in its industry.
4. Responding to the Challenges of the Times
Companies that do not want to keep up with the times will be crushed and abandoned over time. Therefore, one of the goals of innovation is to respond to the challenges of the times which will continue to change from time to time.
5. Creating New Markets
When the market starts to reach a stagnant point, it needs a new breakthrough to make it “live again”. As a good businessman, you can use it to create new opportunities and markets. Attract customer attention by offering products that are relevant to current developments.
6. Implementing Technological Developments
Science and technology continue to develop. This encourages anyone, including business people, to apply it to innovate.
This is a good sign indicating that the company has a growth mindset. Where they continue to try to develop their knowledge to create new products by applying the latest science.
7. Increase Efficiency
The final goal is to increase efficiency. In this case, efficiency can be related to the product features themselves or related to the company’s internal affairs.
Benefits of Product Innovation for
Company
Developing new products allows companies to show their fangs.
Indirectly, this benefits the company’s value because customers and competitors will perceive it as a competitive advantage and desire to continue to develop.
But there is something more important, product innovation helps companies stay relevant in their markets and continue to grow over time. This ability is very important to maintain the long-term sustainability of the business.
How to Carry Out Product Innovation
Simply put, product innovation can be done in three ways as will be explained in the following section.
1. Developing New Products
Experts categorize this as a radical or disruptive method. That’s because if the product can be well received by the market, of course the “game” will change and market changes will begin to occur.
However, you need to know that this innovation is more difficult to implement considering that the level of success and risks are still difficult to predict.
In this case, the challenge is not about how to create new ideas, but rather how these innovations can be adopted by the market.
Examples are when Netflix started to shift the cinema business and when Uber changed the way of mass transportation.
2. Improving Existing Products
This product innovation is also referred to as incremental innovation. The main goal is to improve and perfect existing products.
This method is claimed to be the most profitable and has the greatest probability of success because it only upgrades the quality of products that have been successfully adopted by the market.
However, the impact can attract great attention from customers. An example is from a regular laptop to a laptop with a removable screen to a 2-in-1 laptop.
3. Adding New Features
Introducing new features is the third type of product innovation. In this case, the main goal is to fine-tune and increase the frequency and absorption.
You could say this is the easiest way because it will not burden consumers with additional features that require them to give up the use or utilization of the original product. Examples are updating iOS on an iPhone or upgrading Windows to the latest version.
So, those are the various product innovations that you can learn from this article. You must not forget, innovation is not only focused on products but can also be through services and business process improvements.
One way is by using the Labamu application to document administration and manage business transactions.
To check complete information, you can visit the official Labamu website at www.labamu.co.id or download the application directly via Google Play or the App Store.
