Articles that cover basic background information
We innovate - under a product dominated thinking approach - to enhance features of products or find new products, to reduce manufacturing costs, or to improve processes.
This follows traditional strategy thinking of differentiation versus cost leadership; and value chains.
All good stuff; from a product dominated thinking mindset.
Here's a description of the Lean Canvas - a one-page business plan
We can use it to neatly describe an innovation. As well as guide-rails for an innovator to take an idea to an innovation description.
There is a criticism that the original 4P marketing mix doesn't address service. Which comes from a view that service and goods are fundamentally different.
To address this criticism, Boom & Bitner introduced 3 additional Ps to derive the Service Marketing Mix. These new Ps are People, Physical Evidence and Process.
Kotler added an 8th - performance. And this is sometimes altered to partnership
Product, Price, Promotion and Place. These are the 4Ps of the original marketing mix. Which helps us tease out things we need to think of to sell our product
It's a marketing classic - but with lots of criticism. Which are sometimes not well looked into by marketing, business or MBA courses.
We innovate, under a service dominated thinking approach, for similar reasons as product dominated thinking (differentiate, cost leadership, value chains).
But also to enhance, entice and enrich our customers; to react to changes in ecosystem value generation; and to offer what customers are expecting from other markets/industries.
We live in an exciting world of "jobs to be done" and "blue ocean" thinking.
When our ways of thinking, acting and behaving are based mainly on goods, then we are following a goods-dominant logic
Such a logic leads us to see a world where
It is a logic that has been sufficient for nearly 300 years. But we will argue later that it is no longer sufficient, given that services are eating the world.
It's useful to have some background on product-dominated innovation since service-dominated innovation is similar (yet with additional factors to address).
In this article we look at:
Is our current way of thinking about the world - a so called goods-dominant logic that is goods-centric and has a heavy focus on value-exchange - the best mindset for services?
In this first of two articles we look at what is this goods-dominant mindset. We conclude that yes we could use it for services, but it limits us. It is like driving a performance sports car, but only ever using 1st gear.
Once we look more at services we realise a new logic is needed to access the other gears. But that this is a realisation not a revolution.
"94% of executives are unsatisfied with innovation performance". Yet "84% see innovation as important to growth"! And "54% of companies struggle to bridge the gap between innovation and business". Worse; "very few executives know what the problem is and how to fix it"!
We have forgotten the basics. Firstly that "the firm has two, and only two activities: marketing and innovation". And that "people don't want to buy a 1/4 inch drill, they want a 1/4 inch hole".
Instead, we (accidentally?) embark on innovation theatre, misalign execution with vision, and forget there is resistance to innovation. We miss following service-dominant logic. Which drives customer-centric thinking, and co-value generation; is a natural home for job-to-be-done and blue ocean theories; helps us minimise marketing myopia; and focuses us past point of sale, to additional services, servitization of goods, and the circular economy.
