Innovation takes many forms
Innovation’s broad classifications are:
Product innovation – often high risk, involving substantial investment in people, time and money,
Product improvement - improving current systems and products, which may only require minimal investment, but can result in substantial profit increase,
Process improvements - improvements in the way we do things. This usually involves no or little risk.
More specific classifications have been devised, including the following ad-hoc list of examples:
Business model innovation
Involves changing the way business is done in terms of capturing value
Marketing innovation
The development of new marketing methods with improvement in product design or packaging, product promotion or pricing.
Organizational innovation
Involves the creation or alteration of business structures, practices, and models, and may therefore include process, marketing and business model innovation.
Process innovation
Involves the implementation of a new or significantly improved production or delivery method.
Product innovation
Involves the introduction of a new good or service that is new or substantially improved. This might include improvements in functional characteristics, technical abilities, ease of use, or any other dimension.
Service innovation
Refers to service product innovation which might be, compared to goods product innovation or process innovation, relatively less involving technological advance but more interactive and information-intensive. This type of innovation can be found both in manufacturing and service .
Supply chain innovation
Where innovations occur in the sourcing of input products from suppliers and the delivery of output products to customers
Substantial innovation
Introducing a different product or service within the same line, such as the movement of a candle company into marketing the electric light globe
Innovation typically involves a degree of risk, as a result of breaking-away from traditional methods of doing things or approaching subjects.
Market failure is typically the biggest risk, especially when launching a new product. The risk can be significantly reduced through gaining an understanding of the marketplace, particularly why the customer would want to buy the new product. A business needs to thoroughly research consumer behaviour and ask “ what is the real benefit in this for the customer? ” and “what would provide real value for money to them? ” (ie the value proposition).
You also need to apply the same thinking to suppliers and middle-men. In the travel industry you need to determine whether wholesalers and travel retailers will perceive that a proposition has value to them. If they don’t see a real benefit, it will be hard to get the product to market.
It’s much cheaper and less painful to undertake this examination early. Abandon an idea as being too risky, rather than discover after its expensive development, launch and promotion that it was something not wanted or not valued by the consumer.
Tourism is an inherently conservative industry. It reacts slowly to market trends and to customer demands, rather than getting ahead of them. Within reason and practicality, the ability of operators to discard their risk aversion is one of the first steps to take in becoming more innovative and, ultimately, more successful.
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