Discussion

1. Cohen (2013) lists 7 sources of marketing innovation.
What are they, and which one(s) do you find

to be most important?
The unexpected: unexpected success and failures shouldn’t be overlooked as an opportunity for
innovation. Just like the glue example that came from breaking the testing beakers, new innovations
can come from unexpected results.
Incongruity: the dissonance between what a product is developed to be and what the customer really
wanted can have a negative effect on a company but it can also inspire innovation if the company is
willing to listen to its customers.
Process Need (necessity): Seeing if there are any gaps in the process – or in the way things happen.
Perfecting the existing process by replacing a weakness or creating something new to add to it.
Industry and market structure: industries and markets are continuously changing, especially in the
technological field. When an industry changes, new problems arise which give opportunity for
innovation.
Demographics: an inevitable continuous change is demographics. Many industries often neglect
demographics and don’t reap the benefits of thinking ahead and exploiting the benefits.
Changes to perception: just like demographics, changes in the way we view life changes as we grow
older.
New knowledge: what we think of when we think of innovation. Innovation based on new knowledge
like new tech or new science.
The most important to me would be demographics and changes in perception. Demographics has set
lead times – we know when gen z will turn 30 – so we can plan innovation if we keep an eye on
certain demographics and track. Segmentation and targeting can help with discovering incongruity or
the unexpected for innovation.
2. What is Patagonia’s philosophy on product design and production? How do they relate to Cohen’s
discussions of Demand-Side and Supply-Side innovation?
Product Design Philosophy: Chouinard makes it a point to convey that quality is the number one goal
when it comes to product design. He does not want quality to be subjective, so Patagonia takes 16
questions into consideration when creating any product. Is it functional? Is it multifunctional? Is it
Durable? Does it fit our customer? Is it as simple as possible? Is the product line simple? Is it an
innovation or invention? Is is a global design? Is it easy to clean? Does it have added value? Is it
authentic? Is it art? Are we just chasing fashion? Have we done our Homework? Is it timely? Does it
cause any unnecessary harm? These questions ensure that each product is made to Patagonia’s
standard of quality.
Production Philosophy: For the best quality product, Patagonia has 6 principles that have put in place.
- Involve the designer a producer so that the producer can fully understand the intent of the product
that was created. A concurrent approach rather than an assembly line approach puts all participants
in the beginning phase.
- Long term relationships with suppliers in order to create a mutal dependency so that they both do
what is good for each other. It may be hard to choose these relationships because you need a quality
supplier and contractor.
- Weigh Quality first because that is the main goal. If something is going to be low cost it may not be
up to the company’s quality standards.
- Go for it but do your homework – testing reduces risk, and knowing about your suppliers when
choosing a new relationship can save a lot of time and money.
- Measure Twice, Cut once – making sure that suppliers and contractors have the necessary supplies
and tools to get the job done to your quality standards costs less than losing customer trust when the
product is in a customer’s hands.
- Borrow ideas from other disciplines and industries – companies shouldn’t resist change, they should
embrace it and look at unlikely sources to analyze what they do well and maybe add to your own
company.
I think Patagonia is mostly functions in the demand side innovation. Demand side innovation is when
the innovator has an objective of the product they are trying to make or the problem they are trying to
solve. As an outdoorsman himself, Chouinard knows what problem he wants to solve with his product
and as a result he understand what the function of it will be. I think that what can make it a supply
side innovation would be when a product they make is multifunctional. Like when Chouinard
mentioned that a climber’s product may end up on a skier. Being able to use that product for functions
for which it wasn’t originally created for makes it a supply side innovation.
3. Discuss pricing innovation in the introductory phase of the lifecycle. What approaches are available
to firms, and which one(s) would be most useful for your organization? Keep in mind that pricing
services is difficult, so think what might work best if you work in a service organization.
A firms primary goal during the introductory phase of the lifecycle is to define the product’s worth through effective
price & value communications. Both early and late adopters of innovative products lack price sensitivity because they
have no reference point to determine what the price should be. So, it is up to the firm to communicate what the There
are 2 value communications approaches discussed in the book that firms can use.
Trial promotions: If the product is frequently purchased, has low production cost, and benefits are obvious after one use,
sampling the product is the cheapest and most effective way. It is not cost effective for durable goods, since companies
would have to wait years before a repeat purchase or for goods that require buyers to learn new skills.
Direct Sales: Best works for innovations that cost a lot. It involves trained sales people to evaluate buyers needs and
educate the buyer on how it will satisfy their needs and aid customer adoption in order to minimize failure. When the
innovations is too complicated, convincing evaluation of buyer needs may leave them too uncertain about the benefits,
and they may not adopt it.
For a service organization, I think a trial promotion would work best. For example, the yoga studio I go to gives new
members a free 1 week trial so that they can experience the classes without having to pay. It doesn’t cost the yoga
studio anything more since they pay the instructor per class. The same thing would be for a service like Spotify premium,
member can get a month free and decide if they want to pay for it after the month. I don’t think it costs Spotify anything
extra, and if it does, its probably very low cost compared to what they can potentially get in profit from the customer
who is trying out the service.

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1. Cohen (2013) lists 7 sources of marketing innovation.

What are they, and which one(s) do you find

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