Innovation and Commercialization in Essence Drinks: A Case Study

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INNOVATION AND COMMERCIALISATION
Essence Drinks

Contents
INNOVATION AND COMMERCIALISATION.........................................................................2
LO1.................................................................................................................................................2
INTRODUCTION..........................................................................................................................2
IMPORTANCE OF INNOVATION FOR ESSENCE DRINKS...............................................4
COMMERCIALIZATION............................................................................................................... 4
EXPLAINING HOW ORGANIZATIONAL VISION, LEADERSHIP, CULTURE AND TEAMWORK CAN
SHAPE INNOVATION AND COMMERCIALIZATION......................................................................5
VISION......................................................................................................................................5
LEADERSHIP...........................................................................................................................5
CULTURE AND TEAMWORK...............................................................................................6
LO2.................................................................................................................................................6
EXPLAINING THE DIFFERENT TYPES OF INNOVATION................................................................6
4PS OF INNOVATION.............................................................................................................6
PRODUCT................................................................................................................................ 6
PROCESS..................................................................................................................................7
POSITION................................................................................................................................. 7
PARADIGM.............................................................................................................................. 7
EXPLAINING DEVELOPMENTS IN FRUGAL INNOVATION AND PROVIDE
EXAMPLES OF HOW IT IS USED IN AN ORGANIZATIONAL CONTEXT......................7
LO3.................................................................................................................................................9
BUILDING AN INNOVATION BUSINESS CASE FOR AN ORGANISATION,
INCLUDING WAYS TO ACCESS FUNDING........................................................................9
IMPORTANCE OF COMMERCIAL FUNNEL AND NPD PROCESS IN INNOVATION..10
LO4.............................................................................................................................................. 11
TOOLS FOR DEVELOPING, RETAINING, PROTECTING KNOWLEDGE AND
INTELLECTUAL PROPERTY WITHIN ESSENCE GROUP...............................................11
CONCLUSION........................................................................................................................... 12
REFERENCES.................................................................................................................................15

LO1
INTRODUCTION
Innovation in the business enterprise sector is defined in the Oslo manual as “the implementation
of a new or significantly improved product, goods or service, or process. A new marketing
method or a new organizational method in business practice, workplace organization or business
practice ”.According to the Oslo manual, there are four categories of innovation. In modern time
companies are beginning to focus more on innovation. The companies adopting innovation are
has seen tremendous business growth. The aim of the report is to understand the importance of
innovation for an organization. The Essence Drinks was started by the company founder Akshay
Kumar. The company launched one drink in the UK market. The product was very successful. In
the third year due to tough competition in the market, the company has seen a decrease in profits.
The Essence Drinks now want to create a new range of products (Drucker, 2014).
Product Innovation – when a new product or service is introduced and the product is
significantly improved with respect to its characteristics. Product innovation is achieved when
there is an improvement in technology, component and material, software improvement, user-
friendliness etc. Essence Drinks should concentrate on product innovation. The new products
will help the company in achieving the profits for the company (Edquist, 2013).
Process Innovation – A significant improvement in production or delivery method, process
innovation involves a change in technology, technique, or a significant change in software.
Essence Drinks have to devise a new production process.
Marketing Innovation – The implementation of new and innovative marketing methods leads to
marketing innovation. The marketing innovation demands a significant change in product design,
product price, product placement or product packaging. Essence Drinks manager should analyse
the market and decide the product pricing. Managers should use marketing innovation for
promotion of the company products (Drucker, 2014).
Organizational Innovation – The organizational innovation is achieved when there is an
implementation of new organizational business practice, change in the organization structure.
The Essence Drinks has to improve the innovation ability of the company.

Technological Innovation – technological product and process innovation are achieved with the
implementation of technologically improved products. The technological innovation demands a
significant technological improvement in product and process. Essence Drinks has adopted new
technology for production and promotion of its products (Edquist, 2013).
Non Technological innovation – All innovation which is excluded from technological
innovation is called non-technological innovation. Innovation in marketing, organization,
management and design are an example of Non-technological innovation such as marketing,
organisation, management and design.
R & D Based Innovation – The application of research and experiment to develop a product or
service is called R & D based innovation. Essence Drinks have to do R & D based innovation to
come up with a new product. The company has hired a team of research professionals for doing
R& D for the company.
Figure 1: Process of Innovation
Source: cairn

IMPORTANCE OF INNOVATION FOR ESSENCE DRINKS
Innovation is necessary for Business Growth – Innovation is important for business growth.
Businesses investing in innovation are able to scale their business very fast. They are also able to
hire more people. The innovative businesses also have more customers as compared to business
which is not involved in innovation. A company small company can achieve big results if it can
invent a unique product. Essence Drinks has invented a new range of products that will help the
organization in achieving Business Growth (Autio et al., 2014).
Less competition in the market – Often innovation leads to the production of a unique product
or service. The product is not available to other companies. The companies which adopt
innovation are able to provide something unique to the customers. If there is less competition in
the market then the company can gain huge profits. By offering new and unique products in the
market the company can have less competition.
Meet customer demand - The customers demand changes constantly. To meet the changing
demand of the customers, companies need to adopt innovation. The companies cannot create
new products which are able to satisfy the customer's demand and needs. To meet the customer
demand the company has to come up with a variety of products. The company can offer drinks in
various flavours (Autio et al., 2014).
Attract best employees – People believing in innovation want to work for innovative
companies. The organizations which adopt innovation are able to attract the best talent available.
Adopting a culture of innovation Essence Drinks can attract people who are interested in
innovation. These types of people generally work in companies that provide full freedom and
enough funding for carrying out innovative experiments.
COMMERCIALIZATION
Commercialization is the process of transformation of ideas, knowledge into wealth is called
commercialization. Commercialization is a part of innovation. It is associated with market and
profit motive. Commercialization includes the process of production, marketing and adoption of
the product by the customers. Commercializing the research and development can give
innovative products that have the ability to change human life. Every company involved in
innovation want to commercialize the company products. There are many benefits of

commercialization. Commercialization has societal benefits, the innovation of products help
society in many ways. People get a solution to their problems. Commercialization help in
achieving economic growth, companies can sell their products and services and gain profits.
Another benefit of commercialization is the generation of employment. A lot of people are
required for inventing a product new product. For carrying out an invention organization can do
partnership. Both the organization can use the talent of both companies. Innovation gives a
chance for doing entrepreneurship. Products can be sold and profits can be generated. Essence
Drinks marketing managers can help in commercialization of the company's product.
EXPLAINING HOW ORGANIZATIONAL VISION, LEADERSHIP, CULTURE AND
TEAMWORK CAN SHAPE INNOVATION AND COMMERCIALIZATION
In today’s technological world companies are adopting innovation and commercialization for
achieving the business objective. Companies are coming up with a unique product and services.
For doing innovation companies have to adopt a culture of innovation. The company managers
must have a vision for company growth. Without vision, the company cannot innovate. Essence
Drinks leaders have always believed in innovation culture (Morris, 2011).
VISION
The company vision is to launch a new range of products in the market. The company also do
not want to lose the companies its first product. The company want to expand its business in the
UK market. To create new products the company need to invest in technology and research. The
adoption of innovation is the only path through which the company can achieve the dream of
becoming the top company. The company vision is to generate growth in the present market. The
company also want to expand globally. The company has desires of launching a new range of
products (Urbancova, 2013).
LEADERSHIP
The leadership at an organization can motivate the employees to achieve the organizational
targets. The Essence Drinks managers always help their employees to work in a collaborative
environment. The company is currently in search of brilliant talent who can use innovative
technology to make new products for the company. The company seeks to hire ambitious
managers who have the ability to take the organization to the next level. The company want to

hire talented employees who can think of new and innovative ideas for launching and promotion
of the company's new products (Morris, 2011).
CULTURE AND TEAMWORK
The Essence Drink has adopted a culture that makes employees feel motivated. The organization
has well-trained employees. The employees provide the best customer service to the customers.
The employees generally work in teams. Working in teams help the employees achieve targets
and goals. The team leads are responsible for guiding the teams. The firm believes that
employees need to be trained. The company provide training and development opportunities for
its employees (Urbancova, 2013).
LO2
EXPLAINING THE DIFFERENT TYPES OF INNOVATION
4PS OF INNOVATION
The organizations are depended on innovation for their business growth. The impact of
innovation can be seen on the organization. Adopting innovation can result in producing new and
innovative products for the company. The four P’s of Innovation are product, process, position
and paradigm.
PRODUCT
Product is the main elements of an organization. The growth of company business totally
depends on the quality of its product. For gaining more customers the company should invest in
innovative techniques and technology. Due to tough competition in the market, companies
should adopt innovation. If the companies want to survive in the market then they have to offer
unique products to the customers. Essence Drinks saw huge success with its first product. The
company was able to attract customers because the company was offering a unique product. But
now the market has become competitive. With only one product in the market, the company is
facing huge competition. The company is planning to launch a range of products that can attract
more customers. For coming up with a new and unique range of products the company is
planning to hire a research team. The company also have to make an investment in new
technology and tools (Keeley et al., 2013).

PROCESS
Process innovation is referred to as the innovation of a unique process for developing products
much cheaper and efficient. The innovation in the process can help the organization in achieving
cost-effective production of its new range of products. In case of Essence Drinks process is
referred to the company unique and innovative production process. The company should adopt
unique processes for the promotion of the products. The company can use the new latest and
innovative transportation and distribution process.
POSITION
The position innovation is concerned with the promotional activities that are used by the
company for establishing its presence in the market. After new products are developed by the
company, the marketing managers will have the responsibility of adopting innovative techniques
for product promotion. The company can use the latest social media platforms such as Instagram
and Facebook for promotion of new products. The company also plans to hire a creative team
that will see all the promotional activities of the organization. The company should advertise its
products on television, websites etc. The marketing team have to adopt the latest promotional
tools for carrying out the promotion of company product (Keeley et al., 2013).
PARADIGM
The innovation adopted for achieving the company targets is referred to as the paradigm
innovation. The paradigm innovation can help in achieving the company business targets.
Activities such as investment in new technology and hiring new research and development team
can help the organization in gaining a competitive edge in the market.
EXPLAINING DEVELOPMENTS IN FRUGAL INNOVATION AND PROVIDE
EXAMPLES OF HOW IT IS USED IN AN ORGANIZATIONAL CONTEXT
Frugal Innovation is the process of applying techniques to reduce the cost of a product or service.
By using frugal innovation the product pricing is lowered so that more customers can afford the
product. The process involves the removal of non-essential features so that the product becomes
more affordable. By applying frugal innovation Essence Drinks can acquire more customers. By
using frugal innovation the company adopt innovative ideas and utilize the resources in a new
way. By frugal innovation, companies can cut short their resource requirements (Bhatti, 2012).

Companies can operate in a condition such as lack of resources. The adoption of frugal
innovation helps the company in lowering the cost of production. Through frugal innovation
Essence Drink can provide the company achieves customer’s affordability. Frugal innovation can
be adopted by Essence Drinks. The company can use social media for communication with
customers. The social presence will give promotion chances to the company. Nowadays most of
the people are using social media. Companies should use social media for promotion. Social
media can also be used for the customer’s service. Customers should be allowed to use social
media platforms for online ordering. Essence Drinks can use frugal innovation by affordability
analysis, awareness about the customer, and finally creating a new value chain (Bhatti, 2012).
Essence Drinks should analyse the market and study the competitors pricing, the company has to
price the products so that the customers are able to afford the product. The company should also
be able to gain higher profit margins. Essence Drinks have to know the customer demands.
Correct knowledge about the customer’s interest will help the company in launching products
that are liked by the customers.
Figure: Frugal Innovation
Source: cairn

LO3
BUILDING AN INNOVATION BUSINESS CASE FOR AN ORGANISATION,
INCLUDING WAYS TO ACCESS FUNDING
Essence Drinks is Beverage Company operating in the UK. The company was very successful
when the company was launched. The company was having only one product but it was a very
popular product. Due to popularity the company was making good profits. After some years the
company was not able to carry the initial growth. The company’s product was copied and many
competitors emerged in the market. Due to the lack of innovation and commercialization
activities at the company, no new products were launched. For gaining the previous growth rate
the company need to invest in innovation. Essence Drinks has to hire more people for carrying
out innovative research and development (Schaltegger et al., 2012). The managers of the Essence
Drinks should concentrate on building employees towards adopting innovation. A good manager
can motivate the employees for working in an innovative work environment. Innovation
activities at Essence Drinks can attract great talents. Innovative people like to work with
innovation-oriented companies. Essence Drinks managers should motivate interaction between
the employees.The Essence Drinks managers should introduce training and development
opportunities to the employees. The main target of Essence Drinks is to hire an innovation team.
The company also require new equipment and tools. Essence Drinks also need to do innovation
in product development, distribution, promotion, and acquisition of new customers in new
markets. For carrying out innovation activities the company require funding. The company
should look for investors. These investors will help the company by providing initial funding.
For competing in the market the company has to adopt innovative promotional practices. The
company has to focus on equipment innovation (Schaltegger et al., 2012). New equipment's with
the latest technology can help the company in gaining a technological advancement. Essence
Drinks can utilize the latest technology such as using an e-commerce website for selling the
products. The company should adopt modern customer’s service tools such as using voice
technology. Customers should have the facility of ordering the Drinks from their phone. The
company should invest in modern software. The introduction of software and technology can
increase the rate of production. The company should promote its products on the latest platforms

such as Instagram, Facebook. By analysing the current situation of the company it can be
concluded that the company has to adopt innovation culture. By doing innovation the company
will have new and quality products.
IMPORTANCE OF COMMERCIAL FUNNEL AND NPD PROCESS IN
INNOVATION
The commercial funnel is known as the purchase funnel. The purchase funnel is the process of
understanding how customers are able to discover the company products. The purchase funnel
involves steps like awareness, interest, consideration, preference and purchase. Essence Drinks is
a UK based company specializing in selling health drinks. Initially in the first two-year Essence
Drinks was very profitable with its first product. But with time the company lost it's business and
profits. The company is facing tough competition. In recent years the company has adopted a lot
of innovation and commercialization practices (Dierks, 2017). With the concept of NPD (New
Product Development), there are a lot of new products are coming to the market. The
development of new products gives the company a chance to sell unique products in the market.
These products provide profits to the company. By using NPD Essence Drinks can generate
profits and can hire more people. NPD helps in generating employment opportunity. NPD helps
in generating new ideas. The Essence Drinks can also use NPD techniques. After NPD the
company has to focus on marketing and promotion. The company should adopt modern
communication tools (Dierks, 2017). The company can use Facebook and other social media
apps for giving customer service to customers. The company should hire people who can do
testing of the products. Essence Drinks should do a thorough check of the quality of products.
The company has to launch a new quality of products. For making a place in the market Essence
Drinks has to produce new drinks. The new products should provide more options to the
customers. Essence Drinks should focus on producing different flavoured Drinks. The product
quality should be best. The company can introduce products which are of high quality and
healthy. Essence Drinks has adopted innovative techniques and has introduced some unique
energy drinks. While doing research and development the company has to face many issues such
as lack of innovators. The company has to do a lot of investment in tools and technology. There
are various issues with launching a new product on the market. Commercial funnel includes
factors like awareness. When new products are launched in the market then the marketing team

of Essence Drinks have to make sure that the customers are aware of the company products.
Without awareness of new products, the company will not be able to attract new customers.
Customers will not be interested in buying the products. When customers are aware of the
product then they show interest in the product. When launching products the company has to
analyse the market pricing of the product. If the product pricing is high then the customers may
not buy the products. The company should keep pricing such that more customers are able to
afford the product. The company can adopt innovative techniques for production, transportation
and promotion of products. The company Essence Drinks will like to reduce the price of the
products, for achieving low-cost product pricing, the company has adopted measures by which
the company is able to remove unnecessary features. By doing this the company is able to reduce
the production cost while maximizing the profits.
In conclusion, the process of commercial funnel and NPD are important for launching new
products in the market. NPD help in the production of better quality products. To achieve
success in the market Essence Drinks has to adopt NPD. Innovation in promotional and
distribution is also important for the Essence Drinks. For better communication and promotion of
its products, the company has adopted modern communication tools. The NPD process helps in
achieving funding for the organization.
LO4
TOOLS FOR DEVELOPING, RETAINING, PROTECTING KNOWLEDGE AND
INTELLECTUAL PROPERTY WITHIN ESSENCE GROUP
It is very important for an organization to develop, retain, and protect knowledge and intellectual
property. Essence group has realised that their first product was very successful in the market but
they made the mistake of not registering the product with UK intellectual property office. If the
company has registered the product then no one would be able to copy the product and Essence
Group would be making a lot of profit from a single product. By adopting innovation Essence
Group has developed a new product called “Instant Energy” basically it is an energy drink. The
product has gained popularity in the UK market (Bently and Sherman, 2014). To protect the
company product from copying of the product by a competitor the company should use the
following techniques.