LEARNING JOURNAL - 3

The following are the learnings from the classes –

- Better Mousetrap Fallacy – the mistaken belief that a good product/innovation
sells itself, it needs no marketing. This should always be avoided. For example –
Tata Nano was an excellent innovation that was both affordable as well as more
environment friendly as compared to other four wheelers, but it fared poorly in
the market.
*No marketing as well as bad marketing fall under the Better Mousetrap
Fallacy (lesson from the Segway case).
- It is extremely important that an innovation creates value for the customers,
only then shall it become a success.
- Value is an excess of benefits over costs. Satisfaction on the other hand, is an
excess of performance over expectations (which can be managed by managing
one’s expectations, through better performance etc).
- Five ways of marketing an innovation are as follows –

 PRODUCTION CONCEPT – it says that companies should scale up production so

as to attain the benefits of economies of scale (thereby leading to lower cost) so
that they are easily available to the customers at affordable prices.
For example – most companies in China use the concept of large scale
production to bring down costs (like Redmi).

 PRODUCT CONCEPT - this is the idea that an innovation will see easier diffusion
if it provides better features and quality. A good quality innovation is one that
meets compliance with pre-performance standards.
For example – iPhones 7, 8, X etc. As a new iPhone is released, it quickly finds
takers since it comes with better features.

 SELLING CONCEPT – it says that companies need to undertake aggressive

marketing strategies in order for the customers to purchase the innovation.
For example – Reliance Jio went in for aggressive selling for some time after the
launch in order to acquire as much market share as it could.

 MARKETING CONCEPT – this is the idea companies should create value for the
customers and build better relations with then in order to capture value from
them. In essence, this follows ‘the customer is the king’ concept.
 For example – restaurants provide differentiated services to different customers
based on their needs.

 SOCIETAL MARKETING CONCEPT – it says that societal interests must be taken

into account while marketing a product, so that its acceptance is increases. It
follows the concept of commerce with cause.
For example – when ITC’s Classmate notebooks are sold, 1 Rupee goes towards
educating a girl child.

Now, let us understand the concept of needs, wants and demands in the
context of solar panels –

 Needs – these are the basic requirements. In this case – the need is for clean
energy.
 Wants – forms through which needs are satisfied. In this case – it is electricity
generated through solar panels or simply stated, the want is for solar panels
here.
 Demand – it is the sum of wants, affordability and a willingness to spend. In this
case – the demand will depend on whether the customer can afford it or will
pay for it.

- What is the difference between a product, service and an experience?

 A product can be owned. Example – soaps, biscuits etc.
 A service cannot be owned. Services are also differentiated. Example – credit
cards, insurance etc.
 An experience leaves a person with the memory of it. It cannot be easily
forgotten. For example – Uber, waterparks etc.
*There is a thin line between services and experiences. Most of the time,
services create experiences. The two are often used interchangeably.

- What is the difference between exchange, transaction and relationship?

 An exchange is a mere give and take.
 A transaction is a unit of exchange. It often leaves the participants with little to
no memory of the transaction. It is often of a mundane nature. For example – if a
person takes a flight, he/she is bound to forget about it if nothing out of the
ordinary happens.
  A relationship on the other hand creates a memory (it typically involves going
the extra mile). For example – if a person is asked for feedback, given coupons
etc., they are bound to remember.
The 4Ps of marketing and the corresponding 4Cs –

 Product – the product is a company’s offering to the customers.

Customer Solution – a product becomes a solution when it solves a particular
need of the customers.
For example – IKEA provides ready-to-assemble furniture. This helps the
customers pick pieces of their choice and finally assemble it themselves.
*Marketers can never create a need, it exists already, they only have to
identify it.

 Price – price is what the company gets from the customers.

Customer Cost – this involves what the customer pays for the innovation. The
cost also includes the opportunity cost.
For example – the price of a pair of jeans at store far away may not be very high.
But the customer may prefer purchasing from a nearby store since it saves
him/her time and the cost of transportation.

 Promotion – this deals with communicating about the innovation to the

customers.
Communication – communication is how the customers perceive the innovation.
Effective communication will happen only if the message relayed is the same the
message received.
For example – the Cadbury dairy milk is being advertised as chocolate for
everyone in the family (regardless of age) since the earlier perception was that
this was a product just for children. So an impersonal mode of communication is
being used to communicate the new message.

 Place – place deals with the distribution channels used for the distribution of the
innovation.
Convenience - this deals with the accessibility of the product. The better the
accessibility, the more convenient it is.
For example – Grofers and Big Basket have solved the problem of convenience
through online delivery of groceries.
*While dealing with a service, the marketing mix also includes people, process and
physical evidence to make 7Ps.
- The case of Tan90, a company selling cold storage units, was also discussed. The
main take-away being that if we are targeting a particular segment of people, the
innovators and early adopters should be from that segment itself. Also, since the
innovation is expensive, the EMI system of payment can be used for to
encourage greater adoption. The innovation can also be given on lease for some
time to give the customers a feel of it (the cost of which shall be borne by the
company as an advertising expenditure).

- Who are opinion leaders? – Opinion leader is a marketing used for a regular
influencer. It is not necessary that they be people from pedigree, money or
position. Since they are common people, they can easily influence as they do not
carry any baggage. For example – the lady in the Dove soap’s advertisement is an
opinion leader. She is a common person, yet she is someone who can influence
because of this very reason.

- the chasm in the innovation diffusion curve lies between the early adopters and
the early majority. Which means, it comes before the point where it is widely
accepted by the majority of the customers. The main reason being the different
characteristics between the early adopters and the early majority(which may
have to do with price and affordability). Once an innovation crosses a chasm, it
needs not much propulsion to go forward.
For example – Maruti Alto was heavily advertised till it crossed the chasm. Once
past it, it gained enough momentum to sustain.

- The case of Segway was then discussed. The innovation was scrapped last week.
The takeaways from the session are –
  The innovation providers should not love their innovations so much that they are
blind to the faults of the innovation.
 Better analysis of the market and the customers must be done in order to come
up with a sound marketing strategy. In this case, the marketers failed to identify
where the innovation lay in terms of relative advantage, compatibility,
complexity, trialability and observability.
 Segmenting and targeting plays a very important role while advertising an
innovation.

- From the case of Huawei, it was seen that understanding the customers is
extremely important (since better customer relationships can help a company
move forward with success even in a saturated market). Also identifying the root
cause of a problem and destroying it is extremely important.

- Then the case of AVATAR was discussed, which is a significant innovation since it
causes some amount of disruption in consumer behaviour. The Go-to-Market
strategy for an innovation is given below –

 Present your business case

 Know where your innovation fits
 Define your market strategy roadmap (insider strategy) – the 4Ps, segmentation,
targeting and planning.
 Lock in your pricing strategy. Extremely important to fix the right price to avoid
falling into the innovation chasm.
 Create your external marketing plan
 Classify your ongoing budget and resource requirements
 Specify sales strategy and collateral. (collateral is a security)
 Decide on success metrics. These are certain parameters used to judge one’s
position in the market. For example – how many people have heard of you, how
many people purchased your products etc.
*Before the actual launch of the innovation, it is advisable to do test marketing. Only
on success should the final launch be made.