Innovation and Commercialization in Essence Drinks: Importance, Sources, and Strategies

This project discusses the importance of innovation and commercialization in Essence Drinks, the difference between innovation and invention, and how organizational vision, leadership, culture, and teamwork shape innovation and commercialization. It also covers sources of innovation, ways to foster innovation culture, the 4Ps of innovation, frugal innovation, the commercial funnel, and the new product development process.

Innovation and
Commercialization

TABLE OF CONTENTS
INTRODUCTION ..........................................................................................................................3
MAIN BODY...................................................................................................................................3
Background of company..............................................................................................................3
Comparison of innovation and inventory along with the importance of innovation in business 3
Explanation on how organizational vision, leadership, culture and teamwork shapes innovation
and commercialization.................................................................................................................5
Sources of innovation and different ways to foster and develop innovation culture...................6
The 4Ps of innovation and use of innovative funnel to shape innovative ideas..........................7
Developments in frugal innovation..............................................................................................8
Importance of commercial funnel and developing new product development (NPD)................9
Building of innovation business case along with ways of funding............................................11
Techniques used for testing effectiveness of new product........................................................12
Resources required to proceed with innovation.........................................................................13
Evaluation on different ways to protect intellectual properties.................................................13
Challenges for developing successful innovation and recommendations to overcome.............14
CONCLUSION..............................................................................................................................15
REFERENCES..............................................................................................................................16

INTRODUCTION
Innovation can be defined as development of new products or services by development of
new technologies and processes. Organization which is engaged in innovation can achieve
competitive advantages and can be able to maintain its position in market. It enables organization
to increase market shares and enhances sales volume and profit margin. Essence Drinks is a
beverage company which is engaged in providing healthy mango lassi. Company was selling a
high volume of lassi in last two years. But due to entrance of competitors in market, sales of
company has reduced. Company is planning to apply innovative strategy to increase market
shares and sales volume. The project highlights importance of innovation in organization along
with difference between innovation and inventions. It also deals with organizational vision,
leadership, culture and teamwork which enables innovation and commercialization in company.
The 4Ps are explained and the project also deals with impact of innovation and innovation funnel
on the process of innovation and commercialization. The project also highlights new product
development process along with the ways for raising funds for innovation business case. It also
discusses different tools which can be used to develop, retain and protect knowledge and
intellectual property of company to achieve success.
MAIN BODY
Background of company
Essence Drinks is beverage company which is engaged in providing healthy mango lassi.
The company was incorporated two years before and founder of company is Akshay Kumar.
Company is operating in UK market and has achieved dramatic rise in sales due to innovation
and effective distribution channels. Due to entry of competitors in market, company is facing
significant decrease in sales volume. Company has come up with a solution to implement
innovative strategy by providing new and unique drinks to customers by not moving away from
lassis.
Comparison of innovation and inventory along with the importance of innovation in business
Innovation is the process of converting new ideas into finished products or services to
achieve success. The aim of innovation is to add value to product or services and attract
customers who are willing to pay for those innovative products or services (Damanpour,
Sanchez‐Henriquez and Chiu, 2018). For being innovative, company requires to provide

products and services which are different from its competitors. Essence Drinks is planning to
implement innovative strategy which will enable it to fight with its competitors and increase
sales of products. As company wants to make innovation in its existing product which is mango
lassi, it is planning to launch different fruit flavoured lassi (Erkaev, 2021). The company is
focusing to attract health conscious customers and give them opportunities to select from variety
of products. This will ensure distribution of products according to customers taste and
preferences and maximize customer satisfaction. Innovation is very essential for company in
following way:
 Innovation enables company to achieve competitive advantages which help company to
compete with its competitors and maintain its market position. The ever- changing
market and customer preferences provide opportunities to company to engage in
innovation of new products and services. Company which wants to remain competitive
has to continuously engage themselves in producing new and unique featured products
and services which are different from its competitors.
 The innovative products enable Essence Drinks to attract more customers and to build
strong customer base (Stojkanović, 2022). Different flavoured lassis provides customers
with selection opportunities and to pay for products in accordance to their tastes and
preferences.
 Customer satisfaction ensures retention of existing customers and also attract new
customers. The strong customer base enables company to increase its market shares and
maintain a leading position in beverage industry. Innovation will enable Essence Drinks to enhance the brand value and to develop
goodwill in market which will ultimately attract customers and develop a loyal customer
base. Company with strong customer base will be able to achieve objectives of
implementing innovative strategies within specified time period.
Difference between innovation and invention
Basis Innovation Invention
Definition Innovation can be defined as
process which add value in
existing products or services.
Definition of invention is the
process which creates and
develops new ideas for
products and services that was

not created or developed
before.
Concept Concept of innovation is about
practical implementation of
new ideas.
Inventions are the theoretical
working of original ideas.
Skills required The skills required in
innovation are creative,
analytical, marketing,
technical and strategic skills.
Invention requires scientific
skills.
Range of activities Innovation is a wide concept
and activities related to
innovation is processed in
entire organization.
Activities are limited to
research and development
department of organization.
Focus Innovation focuses on
creativity and new ideas for
existing products or services.
Invention focuses development
of single product or process.
Explanation on how organizational vision, leadership, culture and teamwork shapes innovation
and commercialization
The success of organization depends on vision, culture and leadership of organization.
The successful implementation of any strategy in organization can be achieved by corporation of
employees who are aware of changing strategy. Essence Drinks is required to set vision and
objectives for implementation of innovative strategy and must ensure that it is being
communicated with employees of the company (Abdi and et.al., 2018). The adaptation of new
strategy by employees can be ensured by giving them training which would help them to know
the importance of new strategy and enable them to put their all efforts. Organizational vision
gives a clear idea of future aims of organization and helps company to walk towards the
achievement of set goals. Essence Drinks has the vision to become competitive in market and to
increase its revenue. This vision can be accomplished by introduction of new and unique
products in market with aim to attract health conscious customers to build strong customer base.

Every employee of company is innovative in their work and it is responsibility of leaders to
motivative them.
Leaders of company assist employees with proper guidance and resources that are used
for innovation of products. Employees are made aware of set standards so that they can work
accordingly to achieve goals and objectives (Purwanto and et.al., 2021). Implementation of
effective leadership styles in company helps in encouraging employees for innovativeness in
organization. Motivated and encouraged employees put all their efforts in innovation of new
products which will enable company to remain competitive in market. Team work and
coordination among employees also help company to accomplish its goals. Leaders must
encourage their employees to share their ideas with other which would help them to improve
their innovative skills and help company to produce innovative products. Team building helps
employees to learn new skills which would result into enhancement in productivity and
performance of employees (Artusi and Bellini, 2022). The organization culture must be the one
which would encourage employees to take initiative in every activity of organization. Effective
and efficient work culture in company ensures employee satisfaction and reduces employee
turnover. Satisfied employees become committed for company and provides their best outcomes.
The positive impact of work culture leads to improvement in performance of employees and
enhances innovative skills. All the factors are essential for company to develop an innovative
and commercialized culture.
Sources of innovation and different ways to foster and develop innovation culture
Sources of innovation
 Unexpected- Innovations can be unexpected which has developed new products and
services.
 Incongruities- Innovation can happen while resolving any problems in existing products
or services.
 Necessity- Necessity can also be one of the source of innovation which is used to fulfil
the needs of people.
 Market structure- Market structure and changes in market can also give rise to
innovation.

 Demographics- Changing lifestyle of people require development of new ideas and
products leading to innovations.
 Changing perceptive- Change in perceptive of people is also one of the source of
innovation. New Knowledge- Advancement in technology and new knowledge can give birth to
innovations.
Different ways to foster and develop innovation culture
 Encouragement for ideas- Company is required to encourage its employees to share
their creative ideas with others to develop an innovative culture within the organization
(Demircioglu, Audretsch and Slaper, 2019). Company must communicate with
employees regarding the type of innovation it is expecting from employees and manner
of sharing their ideas.
 Provide feedback- Continuous feedback for the ideas shared may encourage employees
to provide more ideas and also enables employees to know the areas for improvement in
their ideas.
 Rewards- Company must motivate employees by providing them rewards and incentives
for sharing good ideas which would encourage them improve their creative skills.
 Showcase innovative ideas- Company must showcase the innovative ideas given by
employees which would enable other employees to set a standard for innovative ideas.
The 4Ps of innovation and use of innovative funnel to shape innovative ideas
Marketing strategies must be implemented by company to identify core requirements of
company and to effectively implementation of innovative strategies. The 4Ps of innovation are
product, place, promotion and price.
Product
Product innovation refers to the production of new and unique featured products which
would enable company to attract its customers. Company is required to analyse and evaluate
customers and their needs before producing any innovative products (Ubaid and et.al., 2019).
The sale volume of products depends on choice and preference of customers. Product innovation
gives customers opportunity to select products according to their own taste and preferences. The
product which Essence Drinks is planning to introduce is lassi with different fruit flavours.

Place
Company can introduce its new and unique products in new market which would enable
them to explore new customers and expand its business.
Promotion
Success of product depends on the promotional activities done by the company.
Company is required to use innovative promotional ideas to attract customers towards its
products (Guo and et.al., 2019). Promotional activities enables company to make its targeted
customers aware of its products.
Pricing
Company can use pricing strategy to remain competitive in market. Pricing refers to the
value of products that are provided in market. An effective pricing strategy also enables
company to attract customers and develop strong customer base.
Funnel innovation
The aim of Essence Drinks is to provide innovative products which would enable it to
compete with its competitors and increase its revenue. The products to be provided in market
must be in accordance to customers taste and preferences. Funnel process is developed to
achieve value through some essential process. Funnel innovation has three steps: investigation,
development and shipping of products. Essence Drinks can use these steps to develop and
transport its innovative products to targeted customers.
Developments in frugal innovation
Frugal innovation is the process which is used to reduce complexity and cost of
production in an organization. It is a technique of innovation which involves discovery of new
business models, modification in value chain and its processes and redesigning of products
which can minimize the problems faced by customers (Dabić and et.al., 2022). This technique
can be applied to any type of businesses as it generally removes non- effective features in the
products. The key principles of frugal innovation are:
 Engage and perform repeatedly
 Boost ability to think and understand quickly
 Cocreate sustainable solutions
 Shaping of behaviour

 Create value
 Collaboration with innovative partners
The companies operating in emerging markets are facing challenges: low purchasing power and
numerous institutional voids. Institutional voids are poor infrastructure, limited health care units,
pollution, etc. Frugal innovation is all about delivering more value at low cost. The frugal
innovation focuses on adopting a mindset of simplicity and low cost without compromising
quality. It is about minimizing unnecessary wastage and cost on production of goods.
Development of innovative product at reasonable price is not enough to earn more profits. In an
emerging market high profit can be earned by securing high volume and this can be achieved by
changing business model (Albert, 2019). The product and business system innovation is to be
done simultaneously to achieve higher profits. Frugal innovation is not just about designing
cheaper version for existing products but it is about new mindset to understand real needs of
consumers and finding ways to turn voids into opportunities. Example of frugal innovation is
Samsung company which manufactures smart phones for customers. The key competitive
advantage for company is speed. Company grab the opportunities that are provided in market
and lead the industry. It has aligned its strategy, structure, process, people and rewards to deliver
speed and cost advantages. It creates an optimal balance between exploration which includes
risk, experiments and flexibility; and exploitation which includes efficiency, implementation and
execution.
Importance of commercial funnel and developing new product development (NPD)
Importance of commercial funnel
Commercial funnel is also known as sales funnel which includes a process of generating
more leads and engaging more customers in organization. It is a process of generating ideas and
turning ideas into products or services which are to be introduced in market. The success of new
product is due to function of effective passage through commercial funnel (Illescas-Manzano
and et.al., 2021). Commercial funnel is a framework which improves innovation funnel which
can incorporate marketing into development process. There are certain steps which must be
considered by company before representing list of clients and customers as it is very necessary
for growth of company.

 Attracting new customers by investing needs of customers and paying attention to their
feedbacks. Company can offer innovative products through analysing these things and
will be able to attract more customers in the future.
 Converts refer to turning unknown visitors into loyal customers by offering them with
attractive schemes which will attract them towards company's products.
 The company needs to closely identify activities of its targeted customers to know
whether customers are desiring to continue relationship with company or not. Company
is required to maintain close relationship with customers who are willing to continue as
loyal customers.
 Company is required to maximize customer satisfaction level by providing its customers
with products in accordance to their tastes and preferences.
Commercial funnel will enable Essence Drinks generate ideas and convert the same into
innovative product which will help it to enhance sales volume. Commercial funnel will be
responsible for making customers aware of new products in market and attracting them to
purchase new products. This commercial funnel can be carried out by company through social
media promotion which will enable it to raise funds and resources for new product development.
New product development process
NPD is a process which is used to identify methods that will be essential for production
of new products or rendering of new services (Cooper, 2019). Company develops this process
when there is requirement of increasing sales volume and market shares. There are certain steps
followed in new product development process:
 To introduce a new product in market it is essential to generate new and creative ideas in
accordance to demand and preference of customers.
 Company is required to add specification in their product i.e. product differentiation can
be added in this step.
 Company is required to analyse the market before launching new product i.e. analysing
market demands and price setting on the basis of customer satisfaction.
 After market analysis product is being designed and developed in a certain manner which
can enable attraction of customer.
 Last step of process is commercialization i.e. exhibition of product in market.

Essence Drinks is planning to introduce new products in market which is similar to its
existing product i.e. mango lassi. New product development process is carried out by company to
launch new product in market to increase sales and fight with its competitors. Currently,
company is selling mango lassi which is made of milk yogurt. Company will innovate its current
product and use innovative processes to grab opportunities in market. The innovation can be two
ways: firstly, company is going to add more flavours in lassi like strawberry, guava and kiwi.
Secondly, company will also use coconut milk and coconut yogurt as base in place of milk
yogurt. This will add new texture in lassi and the fruit flavoured lassi can attract health conscious
customers.
Building of innovation business case along with ways of funding
To achieve aim of innovative strategy, company is required to list some requirements for
innovation which is known as innovation business case. This enables company to measure its
performance and deliver its future tasks and plans. Innovative business case involves discussion
of concepts, evaluating problems, reducing distractions and attracting commitments from one
working on innovations (Mendoza,, Gallego-Schmid and Azapagic, 2019). Proper steps are to be
followed in building innovation business case:
 First step is development of products or services which is to be offered in market along
with other essential modifications required.
 After the development of products pricing strategy is made by keeping customer
satisfaction as base to know how mush revenue and profit will be earned by company. Once product is developed and price is set, next step is to promote product in market
using different promotional activities. This is important to make customers aware of
products and also to attract them to purchase the products.
Projected expenses of new product development
Expenses Amount (in £)
Market analysis expenses 900
Material expenses 3000
Administration expenses 800
Marketing and packing expenses 2500

Employee salary 5000
Miscellaneous expenses 1000
Total 13200
Sources for funding
The company can raise funds for new product from different sources:
 The founder or owner of company can introduce more capital in business for
development of new product.
 Company can look for angel investors who are ready to invest in new business ideas of
company.
 Crowdfunding- Company can raise funds from public by providing information about
business ideas, products and profit margin.
 Company can also raise funds by taking loan from banks and other financial institutions.
Techniques used for testing effectiveness of new product
An innovation is considered successful if it accomplishes the objectives of implementing
it. Every organization before launching new products in market undergo testing of products. The
testing is done to ensure effectiveness of product to achieve objectives. It is very important to
know whether product is capable for adding value to customers. In the emerging and competitive
market it is very essential for organization to ensure effectiveness of products and whether it will
maximize customer satisfaction level or not. Essence Drinks can adopt division of process as
testing technique to test new products. The testing technique is divided into three stages: input
stage, process stage and output stage.
The production of product starts with procurement of raw materials which will be used in
producing products. Input stage testing ensures quality of raw materials which are to be used for
producing lassi. The raw materials to be used are fruits, yogurt, sugar and other ingredients to
add taste (Villena Gonzales, Mobashsher and Abbosh, 2019). Better quality of raw materials
produces better products which can help company to compete with its competitors. The second
stage of testing is process stage where raw materials are processed to produce end products.

Company can change its processing techniques in accordance to advancement in technology
which can enable effective outcomes. The third stage of testing is output stage where customers
are provided with samples to know feed backs and areas of improvement. Feedbacks and
suggestions from customers will enable company to ensure effectiveness of new products.
Resources required to proceed with innovation
For any organization to implement innovation it is necessary to procure resources which
are required for innovation of products or services. The resources that are required by Essence
Drinks are: human resource, technology, raw materials, time and money. Funds are very
essential for company to implement new product development process. Funds can be arranged by
company through various sources like owner can introduce some capital in company, funds can
be raised through angel investors or crowdfunding and company can also borrow funds from
banks (Resources for innovations, 2021). Company is required to analyse the amount that is
required and approach different investors and banks to invest money in its new project. Human
resource requirement can be fulfilled by recruiting and selecting employees who can be trained
so that they can work effectively. Company can use new technologies for production, packing
and delivering of products. Company can use digital platforms for marketing and selling of its
products. The company has to look for suppliers who can give good quality of raw materials at
low cost. This will ensure low cost of production and company will be able to increase its profit
margin.
Evaluation on different ways to protect intellectual properties
It is essential for organization to protect its ideas and techniques to be copied by others.
There are different ways through which organization can protect intellectual property.
Patents
Patents are used to protect new inventions, designs or any kind of improvements in
company. Inventions enable company to achieve competitive advantages as they develop new or
better process, products or services (Neves and et.al., 2021). There are three types of patents:
utility, design and plant. The disadvantage of patent is it is time- consuming procedure and
according to rules company is required to disclose some information in public and cost of
patenting is also high.

Trademarks
Trademarks are used to protect certain symbols, designs, pattern or image that is used by
business. These are used to differentiate the products form that of competitors. Brand logo of a
company is trademark for company (Zhangand et.al., 2018). The advantage of trademark is that
it enables organization to create goodwill and brand value and it also enables organization to
differentiate its products.
Trade secrets
Trade secrets are formulas, process or other business information that are used to produce
products which are kept secretly by organizations to achieve competitive advantages. Unlike
other intellectual properties, trade secrets can't be protected by registering it. These can be
protected by organization by not disclosing the same with others.
Copyrights
Copyrights are used to protect original work of authors such as music, literature,
sculptures, etc. (Gürkaynak and et.al., 2018). The owners of copyright can claim for the damages
and losses which has incurred due to usage of their works by others. The disadvantage of
copyright is that only expression of ideas are protected not idea itself.
Challenges for developing successful innovation and recommendations to overcome
Lack of empower and motivation in innovation team
The employees of organization are not motivated to share their ideas and views which
result into reduction of creative skills in employees. Managers have concern that innovation can
divert mind of employees from day to day activities, so they don't encourage employees to share
creative and innovative ideas.
Overcome
Company must boost innovative culture in organization which will motivate employees
to think creative and share their ideas with others (Challenges for developing successful
innovation, 2022). This will give rise to innovative ideas for producing new products and
rendering new services.
Resistance to change

People often say no to new changes that are going to take place around them. Employees
may resist changes and innovation which may impact current process and plans. Resistance may
be due to fear when learning process is difficult.
Overcome
Employees need to be provided effective training regarding the changes that are going to
take place. They must be made aware of benefits of such changes and innovations for company
and employees.
CONCLUSION
Innovation and commercialization is essential for organization to gain sustainable growth
and development. The increase in competition has made it important for organization to
continuously engage in innovations. Essence Drinks is planning to implement innovative
strategies which will enable it to remain competitive and to increase its sales volume. The project
has explained the difference between innovation and inventions along with the importance of
innovation in organization. There was evaluation on 4Ps of innovation and contribution of
organizational vision, leadership, culture and teamwork in shaping innovative culture.
Importance of commercial funnel and application of new product development process in
organization were also highlighted in project. Project also included innovative business case
along with different sources of funding. There were recommendations on challenges faced by
organization while developing successful innovations. It also evaluated different tools to develop
and protect intellectual property and knowledge in organization.

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Online
Challenges for developing successful innovation, 2022. [Online]. Available through:
<https://www.viima.com/blog/common-challenges-in-innovation-management>
Resources for innovations, 2021. [Online]. Available through: <https://philmckinney.com/the-
law-of-resources-what-does-innovation-need-to-thrive/>