TEchNOLOGy TRaNSFER MODEL - Javna agencija

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9 Product and Service Dissemination Knowledge is when the group within the company which is the decision making unit starts to understand what the innovation is about and how that relates to their needs. Persuasion is when the decision-making unit develops a positive or negative attitude towards this particular innovation. They try to evaluate if the innovation could or could not be useful for their business. Decision is the third step and here the unit may try the product or a smaller version of it. After the trial they decide. Implementation is vital for the adaptation. If something goes wrong here and the start up firm is not able to provide adequate information the buyer may cancel the transaction or just not use the innovation. Confirmation is the last step where the buyer needs to get feedback on whether they are using the innovation correctly. The second element of the diffusion of the innovations process is communication channels and the influence of intermediaries (opinion leaders, change agents, facilitators). For Rogers (2003), communication is “a process in which participants create and share information with one another in order to reach a mutual understanding” (p. 5). This communication occurs through channels between sources. Rogers states that “a source is an individual or an institution that originates a message. A channel is the means by which a message gets from the source to the receiver” (p. 204). According to Rogers diffusion is a specific kind of communication and includes these communication elements: an innovation, two individuals or other units of adoption, and a communication channel. On the other hand, “diffusion is a very social process that involves interpersonal communication relationships” (Rogers, 2003, p. 19). Thus, interpersonal channels are more powerful to create or change strong attitudes held by an individual. But there are also some characteristics of the (potential) adopters determining the process of adoption: • Previous practice • Perceived, Felt needs/ problems • Innovation adoption • Demographic variables • Personality variables • Communication behavior • Norms of social system • Process integration / involvement 9.6.1 Key factors of dissemination: planning and creating a benefit One of the most important insights when marketing products and services is the necessity of presenting uniqueness, of offering an additional benefit, and of sustaining this additional benefit. This additional benefit is often called USP (Unique Selling Proposition), Competitive Advantage, or Value Proposition. It comprises a product of an organization’s assets and capabilities that together make up its so-called core competencies. A strategically optimally positioned innovation so developed, will transform into a competitive advantage if 4 factors are met: • Sustainability – The maintenance of this advantage over a period of time. It is difficult to copy this advantage • Visibility / Recognizability – Out of the perspective of the customer the key issues of benefits and advantages are visible • Relevance – importance of the innovation’s unique aspects in the customers’ perception • Uniqueness – Is the product, the service, the idea really unique? Uniqueness could be a really new item or a bundle of existing ideas which are unique in their combination In general there are two different ways to gain a competitive advantage: differentiation or cost. Figure 5: Two ways to competitive advantage 145
KNOWLEDGE FOR BUSINESS IN BORDER REGIONS Differentiation could be established by creating a competitive advantage in quality, image, price, innovation, design, efficiency or experience. On the other hand following a cost leadership orientation may create a competitive advantage. Both methods need special marketing to communicate the created advantage. Figure 6: The leverages of competitive advantages (Best, 2008) After deciding which USP the company wishes to emphasize on the market, one must choose the respective means and instruments to implement this strategy. The Marketing Mix concept is essential in identifying the fundamental tools on the path to uniqueness. The original 4 Ps: product, place, promotion and price, evolved step by step into an 8 P concept, particularly focused on services (Lovelock & Wirtz, 2007): • Product – product variety, quality, design, features, brand name, packaging, sizes, services, returns • Place – multi-channel, time, channels, coverage, assortments, locations, inventory, transport • Promotion – education, sales promotion, advertising, sales force, public relations, direct marketing, online marketing, events • Price – list price, discounts, allowances, payment period, credit terms, skimming vs. penetration strategy • Process – means of delivering product elements • People – front-line staff with direct impact on perceptions • Physical evidence – the appearance of the place where the service is delivered • Productivity and quality – cost management and quality issues defined by the customer, efficiency and effectiveness) 9.6.2 Targeting, segmentation and positioning In its first phase, choosing the value, the strategist »proceeds to segment the market, select the appropriate market target, and develop the offer’s value positioning. The formula - segmentation, targeting, positioning (STP) - is the essence of strategic marketing.« (Kotler, 1994). Market segmentation is an adaptive strategy by choosing distinctive and relevant categories to segment a given market in some manageable clusters or segments, which the organization can target through the development of specific marketing mixes that adapt to particular market needs. The first stage of market analysis consists of segment identification: the segment variables are identified with appropriate segmentation techniques. The organization has the option of segmenting the market using different sets of criteria including personal characteristics of the consumer, transactional data, benefits sought, and behavioral measures of the consumer, individual profit per consumer. Segmentation results then serve to find out which segments to compete in and to focus on (targeting). It then has to decide how it wants to position itself on the market against its competitors in terms of products, marketing program, distribution channels, etc. 146
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