Core Concepts in Innovation: Products, Services, and Experiences

1. Core Concepts in Innovation:Products, Services, and Experiences Robert Monroe Innovative Product Development January 13, 2011

2. By The End Of Class Today, You Should: • Be able to articulate the difference, and relationship between: • a product • a service • an experience • Understand that a new business opportunity can take any of these three forms

3. Products, Services, and Experiences • For purposes of this course, a product is a good or service offered for sale by a company. • A product may be customized for different customers but it needs to be offered for sale in substantially the same form to multiple customers. • A product may be a service, as long as the service is offered as a standard package to multiple customers • Sometimes I will use the generic term offering to refer to refer to either a product or service • It is also possible for a company to offer a product that is fundamentally an experience. As long as the experience is available in a standard package or form and repeatedly offered to multiple customers

4. Are These Products, Services, or Experiences? • A laptop computer • A car • An oil change at a car dealer • Renting a bicycle to tour around a foreign city • A book that describes best practices for organizational change management • Hiring a consultant to advise your company on organizational change management. • The consultants are paid based on hours worked • An adventure outfitter that leads treks to Mt. Everest • A hotel room and dinner at the Ritz-Carleton hotel

5. How Does Product, Service Or Experience Change: • Developing your offering? • Producing your offering? • Delivering your offering to customers? • Marketing and selling your offering? • Pricing your offering • Does an offering need to be only one of product/service/experience? If not, should it be?

6. Discussion Question • What makes a product or service offering innovative?

7. Innovation Beyond Products and Services • Are product, service, and experience innovation the only types of innovation that businesses are interested in, or should be concerned with? • Manufacturing process innovation • Product lifecycle innovation (end of useful life recycling/repurposing) • Pricing innovation (lease or rent vs. buy) • Packaging innovation • Financing and business process innovations • All of these are potentially good opportunities for businesses to innovate, but the focus of this course will be on innovations that lead to the introduction of innovative new products and services

8. Exercise – Discuss, Evaluate, Be Prepared To Present: • Each 2-3 person group selects a product or service from the list • Describe the product or service. What is it or what does it do?Who are its primary customers and consumers? • What was/were the fundamental innovation(s) that drove the success of the product? Were the fundamental innovations ‘high-tech’ or ‘low-tech’? • What role did context (time, place, opportunity) play? Had similar previous efforts failed? Why? Why did this one work? • Is the innovation obvious in retrospect? • Has the innovativion provided or supported a dominant industry position for the inventor? Why or why not?

9. Innovations To Evaluate • Apple iPad • Google keyword advertising • Al Jazeeera News Network (Arabic and/or English) • Wikipedia • Toyota Prius • Vélo Libre (Paris) • Liquified Natural Gas (LNG) • Anti-lock braking systems for cars • Aramex shipping service • Nintendo Wii • Garmin handheld / automotive GPS systems

10. Wrap Up

11. For Tuesday • We will look at the Cagan/Vogel process for creating and bringing an innovative new product to market • We will introduce the concept of Social, Economic, and Technology (SET) factors and how their analysis can lead to the identification of Product Opportunity Gaps (POGs) • Readings will be distributed this afternoon by e-mail and/or on Blackboard • The wiki will be up and in-service by the end of the weekend.