Innovation & Commercialisation Assignment | Essence Drinks

Innovation and
commercialization

INTRODUCTION
Innovation refers to the activity of designing something new and doing something
specific through a particular way. In a business it can be a process of doing something new for
making important in the existing products and services of the company. In an organisation, if the
management department make innovation than this process involves developing a new products
or improving existing technologies, process, designs and marketing to solve problems and
increasing efficiency to reach new customers and increasing profits (Edquist and Zabala‐
Iturriagagoitia, 2015). Whereas commercialization refers to the process of launching new
products and services that are manufacturing by a company at market place. This assignment is
related to Essence Drinks which producing healthy drinks in the market and situated in United
Kingdom. This report will discussed about the innovation and invention, 4p's of innovation and
innovation funnel. Further will discussed about the various tools which can be used by the
company to retain and prevent information and intellectual property.
TASK 1
P1. Explanation of innovation and its comparison with innovation
Innovation refers to an idea or invention into a good and service that creates value for
which customers will pay. It can be the exploitation of new ideas that lead to the creation of a
new products, process or services. The main purpose of innovation is to bring the idea to
productive position whether the product is profitable and simple. In Essence Drinks, it is a
complex process that consists converting ideas on the from of goods and services that
concentrate on creating value. Innovation also helpful for the economic growth of the company.
If an organisation make innovation in its existing products and new products and they liked by
the customers and able to fulfil their desires than it help in increasing profit and productivity of
the firm. The major object of this whole process is to create higher amount of value from
customers by fulfilling their demands and enhance the profit margins of the company. Essence
drinks is a firm which manufacture healthy drinks and presently is producing a healthy “mango
lassi” drink in UK market last 2 years. But now due to change in consumers buying behaviour or
purchasing power, taste & preferences etc. affect the business of this organisation (Greenstein,
2015). So now it is important and required for this company that it make innovation and use new
ideas in its existing products to attract number of consumers and make enhancement in the sales
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and profit of the company. In order to make improvement in the beingness, the management of
the organisation can launch new and different flavours in their existing product which is
beneficial for the firm in different aspects like:
Able to attract number of customers- If the firm adopt innovation and launch various
different flavours products than it help in attracted number of target audiences. Because Essence
Drinks has been selling only a single product mango lassi last 2 years at market place
(Hohenberg and Homburg, 2016). So the output of it is that it decreased the demand and
customer base which affect the sales. If the firm produce different flavours products than it help
in attracting various customers.
Assists in competing in the market- There are number of competitors in the market and
they provide various similar product like Essence Drinks. This also affect the sales and profit of
the company in negative way. If the firm launch new innovative product than it will be helpful
for the business and it also help in gaining competitive advantages. It is beneficial for increasing
the sales and market share of the organisation.
Assists in increasing sales- In Essence Drinks, the management department of the
company can use different promotional tools that can be helpful for the organisation increasing
its sales. For example, the management of the company can design an add which attract the
emotions of the customers with the products. In Essence Drinks, it also beneficial for the firm to
attract them and influencing their buying behaviour which help in increasing sales and enhancing
productivity.
Thus, innovation is an important and essential tool and play an important role in the
business in getting attention of number of customers and enhancing sales. For making change
and improving the current position of the product in the market, innovation is a complex process
(Khademi and et. al., 2015). By producing various different flavours products, Essence Drinks
can also making change in its business which is useful for the organisation because it help in
attracting various target audiences and increasing sales.
Difference between innovation and inventions
Basis of comparison Innovation Invention
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Meaning It consist enabling
development in the existing
product and service.
It involves production of new
product or services in a
business.
Needed skills Marketing, technical and
strategic are some skills which
are required for it.
In it, only scientific skills are
required.
Concept This process consist practical
and execution of new ideas.
This process consist doing
work with existing ideas.
Activities Innovation is spread across the
entire business.
This process consist only
research and development
department.
Consideration It make concentration on the
mixture of different products
and process.
Invention only focus on a
single product and process.
P2. Define how organisational vision, leadership, culture and teamwork can shape innovation
and commercialization
In an organisation, the vision of the business offer and provide a perception about
business objectives. These aims and goals help in motivating employees who are working within
the firm effectively. So that they can accomplish their responsibilities in context of business of
the firm on time (Lopez-Valeiras, Gomez-Conde and Naranjo-Gil, 2015). In Essence drinks, the
management department of the company has a clear vision to provide healthy drinks in the
market according to the customers needs and demand and which is helpful and useful for
attracting number of customers and increasing sales and profits of the company. In Essence
Drinks, the manger of the company should make concentration on searching the ways by which
they can analyse the challenges at market place and determine the culture of the business. It is
beneficial for them because it help them in understanding the customers and their needs. By
making focus on the team work and enhancing these kind of skills they can motivating the
employees for working in a group and these characteristics can be mentioned below:
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Organizational vision: It involves setting an clear image of the business aims and
objectives in the minds of their customers who are working for them in the workplace. The
vision of the Essence Drinks is “To sell healthy drinks in the market” in order to increase their
sales and capture more market share by using their innovative formula and distributive capacity.
The business is launching new variants in their current product line such as salted, orange and
strawberry (Dincer, 2017). Which is done in order to meet the market demand of flavoured
healthy drinks . It will also helps in boosting the min aim of the business which is to sell healthy
drinks in the market.
Leadership: Leaders are responsible to play different roles in the business organisation
such as assisting in the vision establishment process. They also tends to pass the valuable
information among the different members of the so that the vision can realize. In Essence Drinks,
the process of leadership is complex and and it involves various factors such as coordinating
activities of employees and also handling and resolving conflicts that exist among different
members of the working organisation. So in order to facilitate positive leadership the process
will involve regular support and feedback that will be provide to the employees along with
providing counselling to the members of the organisation so that members can work in an
effective and efficient manner in the various processes of essence drink business (Chun, Chung
and Bang, 2015).
Culture: The culture of the business comprises of rules, policies and procedure that are
being currently adopted in the workplace. The business of Essence Drinks should focus on
establishing a culture which do not discriminate and also flourish positive work culture among
the different members as they there provide with equal opportunities to perform in the business.
By encouraging positive environment in the work place the business will be able to foster team
working that will result in formulation of creative idea that will be developed by while teams
working together.
Teamwork: In Essence Drinks, it is one of the important factor in the working
environment which involves encouraging members of the business to work together in an
systematic manner in order to achieve organisation aims and objectives. For enabling creative
ideas in the working environment the member of the business can be grouped together and by
grouping different members that business can develop new and creative ideas that can be further
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facilitated in the developing innovative ideas along with it also facilitate invention of new
products in the business process (Polzin, von Flotow and Klerkx, 2016).
In order to facilitate innovation in the organisation the innovative consultant can focus
on creating an environment that involves adoption of different methods such as brainstorming
that will enable development of innovative and creative ideas. It will include the efforts of the
staff members that they tends to put in gaining knowledge about the customer demands and it
also involves them working in teams to achieve the overall organisation gaols and objectives.
They can also take advises from employees in relation with changes in the workplace situation
that will assists innovative consultant in gaining higher level of information and therefore, it will
help in development of new and creative ideas.
P3.4Ps of innovation and explain the use of the innovation funnel .
4p's of innovation ca be elaborated below-
I llustration 1: 4PS- EXPLORING THE INNOVATION SPACE
(Source: 4PS- EXPLORING THE INNOVATION SPACE, 2015.
Product- The product of the organisation involves the products that are being offered
by the organisation to their customers in the marketplace. In Essence drinks, In order to attract a
larger number of individuals the business offers innovative products in their current product
offerings. As the customers also tends to be more attracted if they are being offered new product
with involves new features. Also innovation is important in order to asses the changing needs of
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the market and customers as well. By launching new variants in the current product offering the
Essence drinks tends to attract higher number of customers (Amponsah, and Adams, 2017).
Process- The process include various activities that are related with creation of product
along with it's delivery that involves making the product available to custom for purchase. In
Essence drinks, the organisation needs to actively plan the launch of new product variants as the
new product will require new processes or changes in current process that results in product
creation. Along with it the organisation needs to plan the promotion process of their new offering
variants that will involve organisation using different platform such as social media in order to
promote their new product offerings (Kergroach, Meissner and Vonortas, 2018).
Position- It comprise with setting a specific position of the business offerings in the
minds of customers. The people of the United Kingdom are more attracted towards consumption
of healthy products. In Essence drinks, in order to attract such health conscious people the
business will highlight the new variants features such as it is healthy drink. This will help them
to attract larger audience. Along with attracting people it will also assists in fulfilling the demand
of the customer which will further help the business in securing a more strong position into the
minds of their customers (Tsai, 2015).
Paradigm- In the entire process of launching new variants in the market by the
organisation. The organisation needs to focus on enabling a positive environment. Along with
addressing the importance of changes to their employees and also highlighting the advantages of
introduction of change so that the employees can be involved in the process and they tends to
participate at a higher rate. In Essence drinks, it will also help in creating an association between
the employees and change process which will help the employees to work more efficiently and
effectively in the business process.
Innovation funnel
The innovation funnel involves various steps that enable development of products. The
main focus of the funnel is to create and develop different ideas that can be further converted
into products and services which can satisfy the customers needs in an effective manner. In the
beginning phase of the process the process involves collecting ideas and then digging few ideas
out of the collected ideas in the later part. These ideas further assists in concept development
process. Essence drinks needs innovator funnel in order to capture and implement new and
creative ideas and steps involved in the funnel can be elaborated below-
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Investigation: The beginning step includes collection of information that is done in
order to gain knowledge of the market. Further, the process involves collection of various ideas
that are developed on the basis of pre collected market information that will assists organisation
in acquisition of ideas. In order to collect information the Essence drink can use different sources
such as external and internal. It will further involve collection of information from different
factors such as employees and institutional researches. Therefore, the process includes analysing
the market information so that different market opportunities can be drawn out of market that
will help the business to launch new product or range of products. In order to facilitates this the
innovative consultant should posses the ability that is required to convert ideas into realities
(Vaghjiani and et. al., 2017).
Development: The initial stage involved collection of information by organisation with
using different sources. After this the collected data is being screened the process involves
comparing the selected data in relation with the business goals and objective so that relevancy of
the data can be seen. That will also involves risk and return assessment along organisation goals.
In Essence drinks, under this stage the business tends to test different ideas in the target market
so that they can measure their effectiveness in the real market situations. The business will also
take steps in order to facilitates resource allocation in order to allocate the required amount of
resources and that can be used in capturing market opportunities by the business in an effective
manner.
Shipping products:Under this methods the selection of appropriate ideas is being done
the ideas should be fulfil organisations goals and objectives. In Essence drinks, it also include
launching new ideas that is done in order to meet the customers needs and wants. Along with it
also helps in testing the organisation products in the actual marketplace before it is being
launched on a large extend in the market. Which helps in reducing the level of risk that is
involved in the launch of new products in the market settings (Maritz and Donovan, 2015).
P4.Developments in frugal innovation and how it is used in an organisational context.
The process of frugal innovation includes decreasing the cost complexity which is
associated with a product. In Essence drinks, the concept of the frugal innovation assists
organisation in dealing or responding with certain issues such as limited resources which can be
in terms of material, financial or institutional it helps the organisation in effectively using these
constraints while enabling the process of creation new ideas or searching solution for the issues.
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Thus, the process helps organisation in development of products and services along with making
the same available to the customer across different market segments. It also includes elimination
of features that are not adding value to the product in the production process. Which is done with
a motive of reducing the overall cost that is related with the non value adding feature involved in
the production of the product. Frugal innovation practices are associated with the rising market.
Which is because of simple reason that the innovative procedure focus on producing output that
is aimed at fulfilling the special needs and wants of customers (Kedron and Bagchi-Sen, 2017).
The frugal innovation involves producing products that are affordable by the customers
off very section of the society which is done in order to tap larger section of customers. In
Essence drinks, in order to produce affordable products the business will eliminate the use of
plastic cup in the delivery process and will replace it with eco friendly cups so that the overall
cost of production and delivery cost of the product can be reduced.
Essence drink is serving the customers of the UK market where the customers are more
attract towards healthy eating and the competitor are providing the same by providing healthy
flavoured drinks to earn more market share. In order to compete with such competition and
increase the sale of their product they will add new variants and flavourers in their current
product offerings. Along with it they will provide the variants in the market at an affordable rates
so that they can sell their products to large number of audience. This will help them to increase
their customer base as they are producing drinks at affordable prices which will boost their sales
and also will increase their market share (Abdul Razak and Murray, 2017). Thus, with the
change in trend the preferences of customers an organisation needs to cater the existing need of
customers. For instance, initially Essence drink used to add lot of sugar in their drinks which
people used to prefer. Further, with the passage of time company realised that the taste of their
drink is desirable but people are become more fitness freak. So in order to maintain the sales of
company they bough up frugal innovation in their product like they replaced the artificially
created sugar with glucose and add more protein ingredient into it. Therefore, such innovation
can help the business to flourish their sales.
P5.The importance of the commercial funnel and the application of new product development
processing for commercialisation of innovation
Commercial funnel is also known as purchase funnel. As it represent the consumer
journey which involves purchasing a particular product or services. Therefore it also represent
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the role of revenue funnel. The funnel depict several ideas that are associated with the beginning
stage. In the beginning stage involves high number of customer association and it tends to gets
decreased in the purchasing stage. It also involve identification of creating awareness among
customers about the product and identification of problems. For which they further tend to find
solution.
The funnel tends to include various steps after this so that interest can be created in the
minds of customers fro the new product of the business. Which will assists the organisation in
increasing the number of customer engagements. The Essence drink is only serving one type of
health drink in the market which is mango lassi in the market they were able to sell their product
at high rate in the first two years because of their innovative product offering but the sale of their
product reduced in the next year. So, In order to deal with the decline in sales they are offering
new variants such as slated, orange and strawberry in their current product offering. By enabling
commercial funnel the business focusses on generating interest among the customers for their
new variants which is done so that customers consider their product in their purchasing processes
(Daellenbach, Davenport and Ruckstuhl, 2017).
The Essence drink will have to encounter certain risk and challenges in the new product
development process of their innovative products. The NPD process is an complex process
which involves certain elements such as generation and screening of ideas. For generating the
idea business will use source such as internal and external sources. The next step of the process
involves concept testing that determine the relevancy of generated ideas which are generated in
the initial stage in comparison with the business goals and objectives. After this step then comes
the step of business analysis and product development that is done by analysing the factors such
as profits and cost that will b e required in the development to new product ideas. On the other
hand the product development step involves developing the product in physical sense in order to
ensure that the selected idea can be converted actual physical format. The last step in NPD
process is testing the new product by Essence drink in the actual market settings in order to test
the idea efficiency. After this the business will go with commercialisation the product by
launching the product in the market and offering the same to the customers (Ardito, 2018).
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P.6 Build an Innovation Business Case for Essence Drinks, including ways to access funding.
Business case is prepared for the innovative product which include total expenses that
company has to bear and revenue company can ear. So it gives rough estimation regarding profit
to the business.
Executive summary: It include internal as well as external factors that is used to
prepare executive summary of innovative product that is flavoured healthy drinks. Essence
Drinks is going to manufacture its new product flavoured healthy drinks.
Mission statement: The mission of company is to offer healthy drinks to the consumer
that has high protein value. This will be helpful for the growth of the firm in term of increasing
profit, product6ivity and customer base etc.
Resources: All the resources whether it is financial resources or capital of company
must be significantly utilised for the preparation of flavoured drink. There are various resources
like fund, equipments and others which are required to the management of Essence drinks to
make new product and innovation in its existing products.
Market analysis: Essence drink with the helps of its research team can analyse the
changing need and demand of customer for the innovative product. In this company, the
management of the company required to do this analysis to identifying the needs and demands of
target audiences so that they can fulfil their demands.
Cost and benefit analysis: This analysis is used to estimate the amount of cost and
benefit generated by company by establishing its business successfully. With the help of this
analysis, the management of Essence drinks can monitor and have information about the fund
that how much it can be consume by innovation process.
Sources of fund: There are various sources from where company can raise their fund
such as bank loan, family, friends and so on. Thus, essence drink has raised the credit from
financial institution that mean bank.
Estimated total expenditure of company
Type of expenses Cost
Management expenses £300
Manufacturing expenses £200
Marketing expenses £200
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Labour expenses £400
Raw material expenses £500
Total £1600
Estimated total revenue generated by company
Product name Product price Product quantity Revenue generated from product
Orange Lassi £ 2 100 £200
Pineapple Lassi £ 2.50 200 £250
Plain Lassi £ 3 150 £450
Litchi Lassi £3 250 £750
Mango Lassi £ 3 150 £450
Total revenue £2100
Estimated total profit = Estimated total revenue – Estimated total expenditure
= £2100 - £1600
= £ 500
The market economy of the UK comprises of customers that are more attracted towards
flavoured and healthy drinks. The Essence drinks is been in the market for a period of two years
and are selling a single product which is mango lassi. They enjoyed high level of sales which
was because of their innovative product and distributive capacity in the first two years but in the
third year their sale decrease. After analysing the market they realised that people are more
attracted towards other competitors offerings as they are providing different flavours in the
healthy drink segment to the customers. Which have helped them to increase their customer base.
In order to regain their position in the market and to cater the market needs the business will be
introducing different flavour in their product offering such as salted orange and strawberry into
their current offering. As this will help them to attract larger audience that tends to posses
different taste preferences along with attracting those customers who prefer to have healthy
drinks as the current trend depict customers attracting to healthy drinks on large extent.
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In the process of introduction of the new product in the market in order to cater to the
market needs of flavoured healthy drinks. For the product launch the business will require to
invest money in the production process in order to produce new variants. There are different
ways by which the organization can fulfil their capital requirement needs. The business will
acquire fund from two source firstly they will acquire loan from the bank and and the remaining
investment requirement will be fulfilled by self investment by owner that can also involve taking
money from friends and family. In order to promote their new product offering the business swill
use social media platform such as Facebook and Instagram as they require less investment in
comparison with other platforms of promotion (Çengel, 2017).
P7.Different tools that organisations can use to develop, retain and protect knowledge and
intellectual property.
In order to protect and go along with their intellectual property an corporate body is
required to establishes themselves in the legal context. In order to set alignment with the
protective knowledge the Essence drink is required to use following tools -
 Trademark: In essence drink trademark is the source recognition that helps the customers
in identifying the brand. It assists customers in identification of companies product in the
Industry among the competitors products. Trademark can be applied in the form of
words, words, symbol or images
Strengths Weaknesses
If a company has a trademark ownership, it
will have exclusive right to use it nationwide
and for all the products that are listed in the
registration.
Trademark owners will have pay fee for the
registration and renewal and the fee depends on
the number of classes of products.
 Copyrights : It can be expressed as legal rights of owner of the intellectual property. It is
kind of protection that is being provide by law in order to facilitate the ownership to the
work that is created by people. Essence drink can copyright their recipes that are created
by them.
Strengths Weaknesses
It provide protection to the owner of the It is costly to file copyright protection of any
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intellectual property over their works. It
provide the right of authorization to the owner.
intellectual property. The protection granted by
the copyright may not be comprehensive and
sometime it is limited.
 Patents: It involves excluding other people from the right involved with suing, cresting
the stuff and selling, Patents by the owner of the business. It is usually made for a period
of twenty years. Essence drink can use different patent such as design patent, plant patent
and utility patent.
Strengths Weaknesses
Patents provide superior rights when wilful
infringement does generates. It help in provide
protection to owner's products from the
competitors products.
In Exchange for the monopoly protection, the
government requires the inventor disclose the
extra nature of the inventions described in the
patents.
The company can protect their data in different ways such as by collecting the data in fair
manner for collection of data there is mention saving time period for the personal data needs to
be established by organisation. The data which is collected ensure that the business is using it in
order to meet legal transaction of the Essence drink company. They can also enable training for
employees so that they can work and collect data in effective manner (Ahn, Minshall and
Mortara, 2015).
CONCLUSION
From the above report it have been concluded that both innovation and commercialisation
plays an key role in the organisation. The report have analysed the importance of innovation in
the business along with differentiating it with invention. The report also analyse the organisation
vision, culture and team work that assists in shaping the innovation and commercialisation. The
report also explains the 4p's of innovation that assists an organisation in shaping their ideas.
Along with new product development process which is used in processing of innovation and
commercialization. Under the report Essence drink is selling one drink type and in order to cater
the market needs they intend to add new favour in the current product offering. In this regard, an
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innovative case for the company have been discussed. The last part of the report deals with the
tolls that can be used by business in order to protect their intellectual right.
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What was the project supposed to accomplish
The project was supposed to accomplish to increase its customer base by offering products
according to them.
Did the project succeed in its aims/how do you know? Specifically, please outline any
evaluation and assessment undertaken?
Yes, the project is successfully attempt its aims and objective because the innovative products
are healthy and liked by the customers.
What things do you think worked well and why? Evaluate all aspects of the project from
a range of perspectives.
The firm manufacture its innovative product in different flavours so that they can target
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