Analysis of Frugal Innovation and Product Development

The provided document is an analysis of frugal innovation and product development. It includes various research papers and articles that explore the concept of frugal innovation, its relationship with product development, and its impact on emerging economies. The document covers topics such as open innovation, reverse innovation, and the role of labor unions in promoting innovation. It also discusses the importance of intellectual property rights and education in the context of innovation. The analysis is based on a collection of research papers, articles, and case studies that provide insights into the dynamics of frugal innovation and product development.

Innovation and
Commercialisation

Table of Contents
INTRODUCTION...........................................................................................................................3
TASK 1 ...........................................................................................................................................3
Difference between in invention and innovation....................................................................3
TASK 2............................................................................................................................................5
Four P's of innovation.............................................................................................................5
TASK 3............................................................................................................................................8
New product development......................................................................................................8
TASK 4..........................................................................................................................................10
Different tools that can be used by the firm to develop, retain and protect knowledge and
intellectual property..............................................................................................................10
CONCLUSION..............................................................................................................................12
REFERENCES .............................................................................................................................14

INTRODUCTION
The term innovation refer to convert an idea or thought into a finished product that is
purchased by consumer. An innovation is effective in terms of cost and and satisfy the need and
demand of customer. Imagination and information are basis to create innovation. It also include
to improve some changes in existing product. Opportunity that are present in market are
predicted by companies. These opportunity are changed by companies into innovation to earn
more income by satisfy and fulfil need of customer. By creating an innovation an entrepreneur
develop a new product as well as a new market for the company by taking risk(Ahrendts 2013).
So the company enter into a new market and increase sale of products and profit for their
company. Burberry is a fashion house which deal in various products that include fragrance,
cosmetic etc. Thomas Burberry is the founder of Burberry group plc which establish Burberry in
the year 1856. In present era Burberry is the British luxury fashion house and its headquarter
situated in England. In this report Burberry is launching a new product which is a organic
cream.
TASK 1
Difference between in invention and innovation.
An invention is a process that start from engineering and end with the product that
consumed by customer. Invention is a new process to create a new object or thing. To create an
invention an inventor invest time, money and machine that combine together and result in
success or failure of a project(Al‐Mutawa 2013).
Innovation is the change or a development process in an existing product or invention. The
innovation is a part of creativity. An innovator think outside the box and then put his imagination
into practical things.
Invention Innovation
Invention is the process to develop a product
that has not exist previously.
Innovation refer to make amended on a product
which is already present in market.
To create an invention, the inventor required
scientific skill. First step of invention is
Innovation is adding value to a product. For
innovating a product skill required by

engineering. So inventor expand skill of
engineering till the development of a new
product.
innovator are strategic and marketing skill.
An invention came in the market when a new
idea enter in the mind of scientist or
entrepreneur.
Innovation occur when there is a need to
improve a product. In these an entrepreneur
develop more value in a product for the
customer.
In an invention research and development
team play a major role to create a new product.
For innovating a product it is the result of
performance of all department that are working
inside the organisation.
Context of Burberry for a new product.
In today era, Burberry is leading the fashion industry by establishing themselves as a
luxury fashion house in the world. As company always focus to expand there market reach in
term of customer. So the company decided to launch a new product in its cosmetic sector that is
organic cream. There are some benefits which is useful for company that help Burberry to
increase their market share by launching organic cream is as follow:
 Today customer are more focused towards their skin and environment of earth. So
customer consume those products which are skin and environment friendly. By launch
of organic cream Burberry also increased their goodwill(Bhatti and Ventresca 2013).
As creating perception in mind of consumer that company is manufacturing clean
products.
 A big problem in the beauty products that they are manufacture by mixture of chemical.
So these chemical damage the skin of consumer. There is no control of government on
manufacturing of beauty products. Burberry is able to promote it organic cream that it
include only natural ingredients.
 Skin is the largest organ of a human body. It act as a absorbent material whether it is
healthy or unhealthy. Most of the companies did not even check their beauty products.
Burberry assist their organic cream to be safe and compatible for the skin of consumer.

In order to context Burberry is dealing its business from a century. Company stand them
in fashion industry as luxury house. This past experience of Burberry help them to create a loyal
base of their customer. Burberry overcome from various loop holes with the help of research and
develop team. Burberry focuses on maintain their honesty and energy for manufacture their
products. Similarly Burberry also focus to develop their business. So the company fight with
their competitors and cover more area as compare to other company(Blyton and Jenkins 2012).
Research and development team of Burberry analyse that customer are more focusing towards
natural products. So it is a opportunity for them to enter in a market that will grow in further
years. Company try to target customer quick. In dynamic environment of business company
which move first and take risk has chance to develop more customer for their business.
Burberry has a vision to understand the needs of upper market. Company has a large fan
base of high class society. So as per customer demand company is also providing and matching
with the needs of their customer. The demand and need for organic cream is to capture upper
and middle market of the company. So the organic cream is launch with the price penetration
strategy by the Burberry. This strategy work beneficial for them as in these company launch their
product at a low price and then slowly they cover more market with a slow increase in the price.
Burberry is the first company which focus more on the ethical way to run their business. In these
they are able to connect with the society. To promote organic cream in the society. Burberry use
the CSR method. As corporate social responsibility help them to promote their cream by way of
environment friendly business(Chun and et. al., 2015). Company use this expansion strategy of
doing business as a growth strategy. It is beneficial for company as there are more chances to
develop a business and to capture more market.
TASK 2
Four P's of innovation.
There are four different types of P's that help an Innovator to develop a innovative
product. This innovation mix work as a tool that help a business to improve the product of their
business. Burberry use innovation mix to increase more value in their product. These P's are
mention as follow:
1. Paradigm- This P of innovation help company to make a way or path to understand that
how a business work. What strategy is more beneficial for them. The term innovation

help a business to do change in a product. But it is not necessary that all changes done by
company is always produce positive result. Fashion and cosmetic is a growing industry
in the market. Burberry launching a new product which is a organic cream. As burberry
use different strategy for a new product. Like they launch their new product on a global
market with a online platform(Cowen and Shenton 2017).
2. Product- In these case company analyse that how they improve their product or service.
Management find different ways by which they are able to appeal their customer in a
better way. The best alternative for a company is that they develop a unique feature in
their product. So company earn more profit by selling there USP advantage. Burberry
focus that consumer is more focused towards health. So it is a new alternative for
company to deal with consumer by offering them natural products.
3. Process- The word process include all the steps that are taken by company to produce
their product. In these company analyse step and evaluate this step with result. After
evaluation company try to come up with solution that help them to reduce their cost in
producing a product. Burberry apply these step in which they overcome with cost. Like
what expenses company has to bear to manufacture the new product. For Burberry it
relate with cost that company now use natural products for manufacturing cream. It
increases expense for company as natural raw material are always high in demand.
4. Position- This refer that how company produce their product, what is the communication
method for them to connect with their consumer. Customer perception about company
and their products. Strategy to decide their price of product. As price is a critical factor
for a company because profitability of a firm depend on the price factor. Customer
perception about Burberry product is that they are high in range. So company see this
factor and use it as a tool like to decide their price according to all customer(Filieri
2013).
Frugal innovation.- The frugal innovation refer to the process of reducing cost of goods at
the time of production. In process of frugal innovation company reduce the unessential feature of
their product. The frugal innovation not help a company only to reduce their cost but it also help
them to increase the durability of their products(Govindarajan and Euchner 2012). This
durability help Burberry to increase its market. As by low cost Burberry is able to sell its

organic cream in developing country also. With the implement of frugal engineering cost to
manufacture a product will be low and the volume of products will increase. So Burberry
maintain their profit with increase in the sale of their cream. In the case of Burberry innovation
of product is useful because company has a target market of upper class only. So the launching
of a new product help a company to target a new market. As launch of a new product is price
sensitive. In this case Burberry analyse market and then they decide price. It help them to control
price as per their profits. Because customer will attract toward their cream if they find inferior
quality in Burberry product at a low price. Company is already dealing in cosmetic products. So
management is already aware about the need and demand of the customer. This experience help
Burberry to understand the need of customer. By these company easily position their organic
cream in the market for a particular target market. Some reason which show success for
launching a new product is as follow:
 Burberry made their brand architecture as a strong foundation. In these case Burberry
show a successful structure to make their brand goodwill in all markets. So in this case
Burberry focus their strength on cosmetic business. This result that company achieve a
huge success in the 2000 decade(Hossain 2013).
 Company try to engage with their customer by the method of communication. From past
time company is dealing its products in stores. While competitors move toward digital

media. So Burberry focus on the digital platform which help company to communicate
with their customer easily.
 Burberry convert their business from a brand into a variety of luxury goods. Heavy
investment was done by company to develop a right infrastructure for their business. The
launch of organic cream is also work as new opportunity for Burberry.
TASK 3
New product development
In order to stay in a global business with in a mature market. Companies has to develop
new product by which they carefully launch a new product. As thousand of product launched in
the market but some how only few products will reach at success position. Some steps to develop
a new product is as follow:
1. Idea generation- First step to develop a new product is to find the idea. To start a
business there is a big list of idea that are generated from different source. Burberry
develop idea to launch a new product are a result of research and development
process(Kani and Motohashi 2012). The thought to launch organic cream come from as
company analysis that there is a need which fulfil demand of customer. Specifically in a
niche market.
2. Idea screening- The second step is the idea screening. The term idea screening refer that
to choose those idea which are a good alternative for company. Burberry use idea
screening as a step because in these case. So the launch of organic cream does not
become a expensive step for company in future.
3. Concept development- The best alternative choose by company is attractive. The concept
development is to transform the idea into a practical situation. These concept are
presented to consumer either in symbolically and written form. Like Burberry check their
organic cream is beneficial for new company.
4. Marketing strategy development- In this step company choose the strategy by which they
launch their product in new market. It include the specific target market, pricing strategy
and place to launch their product. For organic cream Burberry is launching it in all of its
exist store as well as on online platform(Khan 2016).

5. Business analysis- After deciding concept and marketing strategy for the new product.
The next step is to cover analyse what are their sales, cost and profit for their new cream.
For these case Burberry analysis that their organic cream also fulfil the goals of the
company.
6. Product development- In this step many concept are check by the company. At last in this
is stage company make whole plan for their product. In include test and system in which
physical product ensure that their idea worked as per plan at last it come under the list of
budget.
7. Test marketing- For this concept it is a test of product. Like in case of Burberry
management launch their cream as a sample or in a specific area. By these they check
review about their new product(Mohnen and Hall 2013).
8. Commercialisation- After the feedback and review about new product it is the last stage
in new product development process. Burberry will launch their organic cream in all
market. So consumer buy it from easily and comment about review of product.
Business plan for a new product:
To achieve the target for a new product. It is essential for a company to create a plan and
then follow step. So company earn profits from their new product also. For Burberry launch of
the organic cream is to discuss in detail. Like what resources are needed by the company from
manufacture to reach of its end customer. So organic cream is a easily approach by customers.
Like if management plan to launch it online then it is through website, application etc.
Source of funding
For the development of the product Burberry need large amount of funds for its business.
There are so many source by which company raise ample amount of fund which help Burberry
from manufacture process to marketing of its new product. Banks and financial institution are
major tool to collect funds. Along with these venture and angel capitalist also help company to
raise sufficient amount of funds.
Budget for a organic cream
Budget is the major tool for a company as a successful budget help Burberry to control its
expenses. It also help company to control its operations according to the budget.
Budget Amount in $
Manpower $ 30,000

Machines
Raw material
Conveyance
Marketing
$ 80,000
$ 40,000
$ 20,000
$ 35,000
Total $ 205,000
After marketing the new product. Company take step to create a offer by which it attract more
and more customer. Concept of organic cream come by observing, monitoring about need and
demand of customer. For case of organic cream the team of Burberry use survey technique of
questback(Peng and Heim, 2014). This help company to bridge the gap between customer and
company. Questback is a detailed research which include depth information about product and
customer feedback. So it help Burberry to do changes according to customer review. To launch a
new product company require a lot of funds. So a projected case is very essential for a company.
As a successful plan help a company to raise funds from different sources. Like from bank loan,
finance companies and with the support of venture capitalist company easily launch their
product.
TASK 4
Different tools that can be used by the firm to develop, retain and protect knowledge and
intellectual property
Intellectual property and its use or importance
Intellectual property refers to creations of mind like investors, literary and artistic works,
symbol, designs,name and images that can be used in commerce. It can be a category of property
which consist intangible creations of the human intellect. It is one of the necessary and essential
part when a company because it help in aiding them in managing and monitoring business entity
apart from its competitors. It refers to the protection of designs of mind which contains both a
moral and a commercial value(Peng and et. al., 2017). Intellectual property is divided in to two
major components in which on e is industrial proper rights such as trademarks, patents and
others. Another is copyright which help people to earn recognition of financial benefits from

what they invent or create. There are number of tools that can be considered by the owner of
Burberry during the time of preservation of intellectual property. The major intellectual tools that
work in the developed countries specifically as Burberry's if the British company. So intellectual
tools in context of UK market which are as follow:
Trade Marks- It is a recognisable sign, phrase and symbol that can be used the firms that
produce or denotes a specific product or service and legally differentiates it from all the other
goods and services. It provides to exclusively identify a product or service with a particular
company. Basically trademark is a sign and symbol which is used by the organisation to set a
images of the firm's products and services in the mind of customers. In Barbery, it can be a logo
or brand that can be used by the management department of the firm in organisation's name and
tag lines.
Trade Mark is beneficial for Burbery when it manufacture and launch its new product
Organic cream because it help in attracting more customers and provide protection for both
businesses and consumers. It is necessary or essential fro a company so that the firm's valuable
assets could not be promoted or used by others. If the company use trademark then it can get
protection towards unauthorised use of goods and services that are produce by it(Sanberg and et.
al., 2014). It help an organisation by increasing customer base because if the firm offer goods an
services according to the needs and demands of consumers than they set the images of the
company in form of logo, symbol, tag line and others. When they repurchase goods and services
then they again come to that firm.
Copy Right- It refers to the form of intellectual property protection which provided by the
laws of the United Sates. It can be a collection of rights that automatically vest to someone who
generates an original work of authorship. It is a legal right which is provided to individual,
organisations and business entity if they doing or create any original work. It is beneficial for
firms because it provide freedom to the creator in determining or deciding that what happens
with its products and services. In context of Barbery, the company produce a new product
Organic cream and if the firm can used copyright to its products then they can make full control
on its it and protect them to misuse through their rivals. It is important because it provide
exclusive rights to those persons, people and others who are copyright holders(Tiwari and
Herstatt 2014).

Patent- It refers to a form of intellectual property that offer the right to owner to exclude
others from making, using, selling and importing an invention for a limited period of time. It is a
legal protection lead by the authority of the state towards a specific invention. It is registered
under Patent Cooperation Treaty (PCT) When a person, organisation and other owning a patent
then it gives the right to stop others from making, using or selling their invention without their
permission. In Burbery, it is important for the organisation because it provide and offer an
opportunity to prevent others like competitors from selling, copying products and service
according to its. For example, Burbery producing new product Organic Cream because no other
firm in this sector manufacture this product. If the firm use this tool of intellectual property the
the firm can gain various competitive advantages in comparison to its rivals which produce same
product.
Nature of innovation
Innovation is the application of new ideas by which an organisation making innovation in
its products, process and other organisational activities and operations. Now these days there are
number of competitors of a particular firm which produce specific products and the rivals create
competition by developing similar products and services. In Burbery, there are several
competitors of this firm and they also manufacture products like it and create competition of this
firm(Toivanen and Väänänen 2016). So by making innovation in its products the firm can mark
uniqueness and development in its goods and services.
Ways through challenges can be overcome
When a company make innovation in its products and services then there are number of
challenges that can be faced by the firm related to manufacture, development and others. There
are some obstacles by which a company can overcome challenges to develop successful
innovations. They are as following:
 If the company want to make innovation in its goods and services then it must
processing ideas quickly and efficiently so that they can implement great ideas to
develop a new product(West and et. al., 2014).
 To overcome challenges, the firm should establish an efficient internal structure.
 The organisation should manage intellectual proper issues and other legal risks so that it
can overcome the challenges and develop the successful innovation.

CONCLUSION
From the above information, it can be concluded that innovation and commercialization
are essential and necessary tools and techniques which is useful to get competitive advantages by
making innovation in exiting products and new as well. Innovation and 4Ps of innovation are
defined in the assignment and the application of use of innovation funnel is described. New
product development is also described in the report in context of processing for
commercialization of innovation. Different tools that are required fro the protection of
intellectual property are explained.

REFERENCES
Book and journal
Ahrendts, A., 2013. Burberry's CEO on turning an aging British icon into a global luxury brand.
Harvard Business Review. 91(1). pp.39-42.
Al‐Mutawa, F.S., 2013. Consumer‐generated representations: Muslim women recreating western
luxury fashion brand meaning through consumption. Psychology & Marketing. 30(3)
pp.236-246.
Bhatti, Y.A. and Ventresca, M., 2013. How can ‘frugal innovation’be conceptualized. Available
at SSRN 2203552.
Blyton, P. and Jenkins, J., 2012. Life after Burberry: shifting experiences of work and non-work
life following redundancy. Work, Employment and Society. 26(1) pp.26-41.
Chun, D and et. al., 2015. Labor union effects on innovation and commercialization productivity:
An integrated propensity score matching and two-stage data envelopment analysis.
Sustainability. 7(5). pp.5120-5138.
Cowen, M. and Shenton, R., 2017. The invention of development. In Development ethics (pp. 3-
21). Routledge.
Filieri, R., 2013. Consumer co-creation and new product development: a case study in the food
industry. Marketing Intelligence & Planning. 31(1). pp.40-53.
Govindarajan, V. and Euchner, J., 2012. Reverse innovation. Research-Technology
Management. 55(6). pp.13-17.
Hossain, M., 2013. Adopting open innovation to stimulate frugal innovation and reverse
innovation. Available at SSRN 2197782.
Kani, M. and Motohashi, K., 2012. Understanding the technology market for patents: New
insights from a licensing survey of Japanese firms. Research Policy. 41(1). pp.226-235.
Khan, R., 2016. How frugal innovation promotes social sustainability. Sustainability. 8(10),
p.1034.
Mohnen, P. and Hall, B.H., 2013. Innovation and productivity: An update. Eurasian Business
Review. 3(1), pp.47-65.
Peng, D.X., Heim, G.R. and Mallick, D.N., 2014. Collaborative product development: The effect
of project complexity on the use of information technology tools and new product
development practices. Production and Operations Management. 23(8). pp.1421-1438.
Peng and et. al., 2017. History and the debate over intellectual property. Management and
Organization Review. 13(1). pp.15-38.
Sanberg and et. al., 2014. Changing the academic culture: Valuing patents and
commercialization toward tenure and career advancement. Proceedings of the National
Academy of Sciences.111(18) pp.6542-6547.
Tiwari, R., Kalogerakis, K. and Herstatt, C., 2014. Frugal innovation and analogies: some
propositions for product development in emerging economies.
Toivanen, O. and Väänänen, L., 2016. Education and invention. Review of Economics and
Statistics. 98(2). pp.382-396.
West, J and et. al., 2014. Open innovation: The next decade.
Williams, H.L., 2013. Intellectual property rights and innovation: Evidence from the human
genome. Journal of Political Economy. 121(1), pp.1-27.