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What is product innovation?
Product: any tangible offering that might satisfy the needs and aspirations of the consumer + Innovation: being innovative is not just "being new" or "different".
An important current reference to the definition of innovation can be found in the Oslo Manual. This document, by the Organization for Economic Cooperation and Development (OECD), aims to guide and standardize concepts, methodologies and the construction of innovation research indicators in industry. It adopts the following definition for innovation:
The implementation of a new or significantly improved product (or service), or a process, or a new marketing method, or a new organizational method in business practices, workplace organization, or external relations.
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What is product innovation?
Product innovation focuses on the development and improvement of product features - technical specifications, intended uses, software or other embedded immaterial – which differ significantly from all products previously produced by the company and in the market. The product must be introduced into the market place so that consumers or other firms may benefit. This distinguishes an innovation from an invention or discovery.
Product innovation can be progressive through a significant technological enhancement of a previously existing product whose performance has been substantially increased or improved. This is the type of innovation most easily recognized by the consumer, as it implies the creation of new products or the improvement of existing products.
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Categories of product innovation
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For the case of crafts, the innovation of artisanal can take place:
In creating a product or a collection;
In the substitution of a raw material that is becoming scarce by a more abundant one;
The exchange of more effective instruments of work;
By the use of new tools that facilitate the work, but without forgetting that in some techniques only the human hand can execute, with its imperfections and small differences;
By changing techniques or more productive processes;
Change in shape, appearance and function;
Change on how to present products commercially.
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REG’ART (Case 1) makes custom glasses by using unusual raw materials such as textiles, wood, horn, granite and stone. It also created a fully inlaid lens by developing a process involving a stream of water.
Use of new materials and new techniques or tools
Kurelu (Case 4) produces handmade loom floors covers (and other products such as bags) based on the greek folklore rugs.
Changes in shape, appearance and function
Materia Ceramica (Case 5) created the “Pink-Lamp” combining hand skill and digital capability (3D printing).
Use of new techniques or tools
Piurra (Case 8) retought its strategy closing the store and focused on traditional methods to create new designs.
Changes on how to present products commercially
Beleza do Sal (Case 9) recovered old recipes and developed a methodology to produce a cosmetic product line that uses handmade processes and molds to get a product made of selected local and national raw materials, 100% natural and free of chemicals.
Creation of a new product line
In Centro Cerámica Talavera (Case 11), it was created a pottery skull, a cutting edge product in the ceramics sector which made sucess in social networks as well as among young people, artisans and designers.
Introduction of a new product
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Barriers to the development of product innovation
There is always some reason to be pointed out to justify the failure of a product innovation, namely a poor market research, technical problems or bad timing.
Furthermore, there are some factors that affect the development of innovation (barriers):
Economic factors e.g. perceived excessive risks, very high cost, lack of funding, etc.
Characteristics of the company e.g. insufficient innovation potential, lack of qualified personnel, lack of information about technology and Markets
Other reasons e.g. lack of technological opportunity, lack of infrastructure, no need to innovate due to previous innovations
(OECD, OSLO MANUAL, 2004)
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Barriers to the development of product innovation
These factors may be divided also in internal and external barriers. On balance, internal factors are likely to be more important core determinants that innovation plays a key role in success or failure than are external factors.
Understanding the barriers to innovation and product innovation may be important as it may lead to review of innovation strategies and efforts. From this reflection, the entrepreneur may develop better conditions to overcome obstacles
Taking the example of YUME PEMA (Case 2), Mariane Sornin works alone and struggles to find someone to teach the necessary skills. Due to a rare and expensive knowledge, the company works in high value-added niche markets. These markets are difficult to access, it needs to be patient and know how to communicate and participate in exhibitions to promote the product and establish strategic partnerships with non-competing professionals acting in similar markets.
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Why?
Product innovation on a firm is of prime importance in today’s competitiveness environment.
Companies should be increasingly attentive to ways to remain competitive in the marketplace since in today's world rapid technological change is a constant that involves organizations.
Markets and consumers stimulate product creation and promote the differentiation of goods and services.
On the opposite side of the sales counter, consumers have a strong appetite for innovation, but they are increasingly demanding and expect more choice than ever before.
Despite their peculiarities, micro- and small-scale semi-industrial and crafts enterprises have to innovate constantly to be sustainable.
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Why?
Product Innovation can (and should) be part of everyday small-business.
However, a number of factors need to be taken into account in order not to make innovation a wrong track for small entrepreneurs. It is necessary to make innovation not a myth, but a way of contributing to the quantitative expansion of these companies, improving their standard of competitiveness.
Aggeliki, the founder of Kurelu (Case 4), is the first weaver in Greece who introduced a special patent in the big-sized loom enabling her to make large woven carpets, customizing to her clients’ needs and preferences. This allowed her to penetrate in the market much easier. Facebook, Pinterest and Skype also help her considerably towards this direction, enabling her to be globally visible and coming in touch directly with her clients and see their spaces making suggestions on the length, color, texture of the products to be produced.
The Kurelu case illustrates the openness of a new generation of craftsmen to reinvent the traditional and to innovate, using the social media tools which are at their disposal to better meet consumers' expectations and requirements.
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How?
Sources of change - their importance in the innovation process varies according to the company
Internal (or endogenous)
External (or exogenous)
Innovation is an essentially interactive process. Having the right information and knowledge are vital for their development.
Information on the market and consumers, on technology and techniques used in the new product
In crafts, the ability to innovate involves a process of learning in diverse areas, culminating in the artisan know-how.
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How?
Product innovation should be done in function of the market, through the need to produce something differentiated capable of drawing the attention of consumers, either by the new functional characteristics or by the aesthetics of the product.
The innovation process in small enterprise, namely on crafts and semi-industrialized, assume specific characteristics.
Product innovation in crafts and semi-industrial activities must mean adapting to the new requirements of the market, both from the point of view of quality and technique, but keeping the characteristics and traditional values of each artisan.
Many craft products are ancestral and must be preserved, even if only as living testimony of the culture.
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Cerabella (Case 12) is a family business which origin date back to 1862, when candles were produced for ecclesiastical use and basic consumption that supplied the lack of electricity. However, the fourth generation of the family decided to initiate the modernization process and to start researching in the decorative possibilities of candles beyond mere functional use. Cerabella diversified its production by adding the decorative candles to its traditional product. Some processes have been mechanized but most of most of the production still result from a craft work. Although in many of its decorative candles molds are used, then they manually go through different washes for texture and color effects. The process may take from hours to a whole day for a single candle.
This case is not only an example of success of products upgrade but also of continuous product innovation. Currently, Cerabella has a catalog divided into different lines encompassing, besides the church candles, products for decoration, gifts, special occasions, scented candles, candles outside as well as author candles developed in collaboration with recognized illustrators and fashion designers.
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How?
The application of product development methodologies for these small business does not follow the traditional steps.
When it comes to an alternative sector of production, such as crafts, the methodology assumes even more peculiar characteristics, being able to be built and deconstructed at each moment, representing a very singular way of proceeding in the development of products.
What is product innovation?
Product: any tangible offering that might satisfy the needs and aspirations of the consumer + Innovation: being innovative is not just "being new" or "different".
An important current reference to the definition of innovation can be found in the Oslo Manual. This document, by the Organization for Economic Cooperation and Development (OECD), aims to guide and standardize concepts, methodologies and the construction of innovation research indicators in industry. It adopts the following definition for innovation:
The implementation of a new or significantly improved product (or service), or a process, or a new marketing method, or a new organizational method in business practices, workplace organization, or external relations.
</slider>
<slider>
What is product innovation?
Product innovation focuses on the development and improvement of product features - technical specifications, intended uses, software or other embedded immaterial – which differ significantly from all products previously produced by the company and in the market. The product must be introduced into the market place so that consumers or other firms may benefit. This distinguishes an innovation from an invention or discovery.
Product innovation can be progressive through a significant technological enhancement of a previously existing product whose performance has been substantially increased or improved. This is the type of innovation most easily recognized by the consumer, as it implies the creation of new products or the improvement of existing products.
</slider>
<slider>
Categories of product innovation
</slider>
<slider>
For the case of crafts, the innovation of artisanal can take place:
In creating a product or a collection;
In the substitution of a raw material that is becoming scarce by a more abundant one;
The exchange of more effective instruments of work;
By the use of new tools that facilitate the work, but without forgetting that in some techniques only the human hand can execute, with its imperfections and small differences;
By changing techniques or more productive processes;
Change in shape, appearance and function;
Change on how to present products commercially.
</slider>
<slider>
REG’ART (Case 1) makes custom glasses by using unusual raw materials such as textiles, wood, horn, granite and stone. It also created a fully inlaid lens by developing a process involving a stream of water.
Use of new materials and new techniques or tools
Kurelu (Case 4) produces handmade loom floors covers (and other products such as bags) based on the greek folklore rugs.
Changes in shape, appearance and function
Materia Ceramica (Case 5) created the “Pink-Lamp” combining hand skill and digital capability (3D printing).
Use of new techniques or tools
Piurra (Case 8) retought its strategy closing the store and focused on traditional methods to create new designs.
Changes on how to present products commercially
Beleza do Sal (Case 9) recovered old recipes and developed a methodology to produce a cosmetic product line that uses handmade processes and molds to get a product made of selected local and national raw materials, 100% natural and free of chemicals.
Creation of a new product line
In Centro Cerámica Talavera (Case 11), it was created a pottery skull, a cutting edge product in the ceramics sector which made sucess in social networks as well as among young people, artisans and designers.
Introduction of a new product
</slider>
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Barriers to the development of product innovation
There is always some reason to be pointed out to justify the failure of a product innovation, namely a poor market research, technical problems or bad timing.
Furthermore, there are some factors that affect the development of innovation (barriers):
Economic factors e.g. perceived excessive risks, very high cost, lack of funding, etc.
Characteristics of the company e.g. insufficient innovation potential, lack of qualified personnel, lack of information about technology and Markets
Other reasons e.g. lack of technological opportunity, lack of infrastructure, no need to innovate due to previous innovations
(OECD, OSLO MANUAL, 2004)
</slider>
<slider>
Barriers to the development of product innovation
These factors may be divided also in internal and external barriers. On balance, internal factors are likely to be more important core determinants that innovation plays a key role in success or failure than are external factors.
Understanding the barriers to innovation and product innovation may be important as it may lead to review of innovation strategies and efforts. From this reflection, the entrepreneur may develop better conditions to overcome obstacles
Taking the example of YUME PEMA (Case 2), Mariane Sornin works alone and struggles to find someone to teach the necessary skills. Due to a rare and expensive knowledge, the company works in high value-added niche markets. These markets are difficult to access, it needs to be patient and know how to communicate and participate in exhibitions to promote the product and establish strategic partnerships with non-competing professionals acting in similar markets.
</slider>
<slider>
Why?
Product innovation on a firm is of prime importance in today’s competitiveness environment.
Companies should be increasingly attentive to ways to remain competitive in the marketplace since in today's world rapid technological change is a constant that involves organizations.
Markets and consumers stimulate product creation and promote the differentiation of goods and services.
On the opposite side of the sales counter, consumers have a strong appetite for innovation, but they are increasingly demanding and expect more choice than ever before.
Despite their peculiarities, micro- and small-scale semi-industrial and crafts enterprises have to innovate constantly to be sustainable.
</slider>
<slider>
Why?
Product Innovation can (and should) be part of everyday small-business.
However, a number of factors need to be taken into account in order not to make innovation a wrong track for small entrepreneurs. It is necessary to make innovation not a myth, but a way of contributing to the quantitative expansion of these companies, improving their standard of competitiveness.
Aggeliki, the founder of Kurelu (Case 4), is the first weaver in Greece who introduced a special patent in the big-sized loom enabling her to make large woven carpets, customizing to her clients’ needs and preferences. This allowed her to penetrate in the market much easier. Facebook, Pinterest and Skype also help her considerably towards this direction, enabling her to be globally visible and coming in touch directly with her clients and see their spaces making suggestions on the length, color, texture of the products to be produced.
The Kurelu case illustrates the openness of a new generation of craftsmen to reinvent the traditional and to innovate, using the social media tools which are at their disposal to better meet consumers' expectations and requirements.
</slider>
<slider>
How?
Sources of change - their importance in the innovation process varies according to the company
Internal (or endogenous)
External (or exogenous)
Innovation is an essentially interactive process. Having the right information and knowledge are vital for their development.
Information on the market and consumers, on technology and techniques used in the new product
In crafts, the ability to innovate involves a process of learning in diverse areas, culminating in the artisan know-how.
</slider>
<slider>
How?
Product innovation should be done in function of the market, through the need to produce something differentiated capable of drawing the attention of consumers, either by the new functional characteristics or by the aesthetics of the product.
The innovation process in small enterprise, namely on crafts and semi-industrialized, assume specific characteristics.
Product innovation in crafts and semi-industrial activities must mean adapting to the new requirements of the market, both from the point of view of quality and technique, but keeping the characteristics and traditional values of each artisan.
Many craft products are ancestral and must be preserved, even if only as living testimony of the culture.
</slider>
<slider>
Cerabella (Case 12) is a family business which origin date back to 1862, when candles were produced for ecclesiastical use and basic consumption that supplied the lack of electricity. However, the fourth generation of the family decided to initiate the modernization process and to start researching in the decorative possibilities of candles beyond mere functional use. Cerabella diversified its production by adding the decorative candles to its traditional product. Some processes have been mechanized but most of most of the production still result from a craft work. Although in many of its decorative candles molds are used, then they manually go through different washes for texture and color effects. The process may take from hours to a whole day for a single candle.
This case is not only an example of success of products upgrade but also of continuous product innovation. Currently, Cerabella has a catalog divided into different lines encompassing, besides the church candles, products for decoration, gifts, special occasions, scented candles, candles outside as well as author candles developed in collaboration with recognized illustrators and fashion designers.
</slider>
<slider>
How?
The application of product development methodologies for these small business does not follow the traditional steps.
When it comes to an alternative sector of production, such as crafts, the methodology assumes even more peculiar characteristics, being able to be built and deconstructed at each moment, representing a very singular way of proceeding in the development of products.
Even though, it is possible to draw the stages of the process:
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Applying the concepts to your context
1. Think about other businesses in crafts and semi-industrial activities sectors that you know, based in your community, country or even in other countries.
What kind of product innovation did you find in those examples?
Which barriers have they faced introducing those product innovations?
2. Now think about your business.
What kind of product innovations have you introduced in the past?
What were the stages you went through in the development and introduction of those product innovations? Were those the same that were described previously?
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