BTEC HND Business: Innovation and Commercialisation Report

This report delves into the concepts of innovation and commercialisation, differentiating between invention and innovation, and highlighting their significance for organizations. It explores the value of innovation, various innovation forms, and provides recommendations for product innovation, particularly for a company like Essence Drink. The report analyzes the importance of commercial funnels, matching goals with resources, and applying frugal innovation. It presents a summary of a new product idea, its impact on stakeholders, and techniques for testing its effectiveness. Moreover, it outlines the required resources for business innovation and discusses intellectual property rights, offering a comprehensive overview of innovation strategies and implementation.

INNOVATION AND
COMMERCIALISATION

Table of Contents
INTRODUCTION...........................................................................................................................3
Part 1................................................................................................................................................3
Difference between invention and innovation.............................................................................3
Value and importance of innovation to organization..................................................................5
Different form of innovation.......................................................................................................6
Recommendation for essence drink.............................................................................................7
Approaches company can take to process innovative ideas........................................................8
Part 2................................................................................................................................................9
Background of the company and problem...................................................................................9
Importance of using commercial funnel......................................................................................9
Matching goals to resource and capability................................................................................10
Value analysis applying frugal innovation................................................................................10
Summary of new idea and its effect on stakeholders................................................................11
Techniques for testing the effectiveness of new drinks.............................................................11
Resources required for proceeding with innovation case of business.......................................12
Intellectual Property rights........................................................................................................13
CONCLUSION..............................................................................................................................13
REFERENCES..............................................................................................................................14

INTRODUCTION
The innovation is the thought which have to converted into reality. When it is in any
business then innovation can be of their product range, process they follow and business concept.
The commercialization is the process of brining innovative product in the market (Medase and
Barasa, 2019). The main course entails production, marketing, customer support, distribution of
the new product in the particular market place. The essence drink is a brand of UK providing
Drink in the mango lassis flavour. This report will evaluate the difference between invention and
innovation for the business. The importance and the value of innovation to any organization is
being discussed and how they are embedded within any organization leadership as well as its
culture at essence drink. Further more in this form of innovation are determined with the 4ps,
approaches which can implemented by essence with the funnel and frugal innovation are
discussed. The recommendation is being presented to innovate the drink for essence. Moreover,
in the another part background of company and problems in launching new drinks and important
of commercial funnel, the summarized new idea is explained and required resource are being
analysed in this report.
Part 1
Difference between invention and innovation
The invention is being creating the concept of thought physically. The invention is basically
development of ideas to perform something without check whether that will work or not (Yoon
and Han, 2017). The creativity is most of any kind of intervention yet the other aspects are also
important because the only creativity can not able to develop a thought for inventions. The
invention is an occurrence of that idea that is related to any product or can be a process which is
done never before. For example the designing of the products, models of business and working
pro-types. The inventions can also be patent because security is provided to the inventor and also
find whether the invention is real or not.
Whereas the innovation refers to a process which is converting the thought into a
successful commercial exploitation and also encourage further to widely spread its uses, in
the market. When the new product or commodity is being come in market in front of the
people then the innovation is being completed (Powell, 2017). The meaning of word
innovation is also state that transformation of ideas and thoughts into reality. When the

product is being innovated then it adds additional value to that particular products. The
value which is developed due to innovation uses to fulfil the need and also satisfy the
customer as well.
Basis Innovation inventions
Meaning This is occurrence due to
development of idea for an
particular commodity that is totally
new and fresh.
In the invention process the idea is being
implemented for any product for first
time.
Concept The innovate is the main driver to
remain within the business. As the
organization and business who are
doing the innovation are making
their organization unique in the
market and also able to grab the
opportunities (Carr, 2019).
The invention is the unique method or
process in which product is being
developed. The invention can be in
product or service or it can be in
machine that are used to produce
products.
Skill required Innovation required scientific skills,
problem solving skill, creativity and
collaboration skill are must in
making an innovation.
They should test the thoughts and secure
the ideas as well. The uses to intellectual
properties to safer the ideas.
Occurs The innovation happen with the
idea to resolve the issue which is
creating problem in an industry.
When the need felt for a product in
the existing products.
The invention occurs with testing the
ideas and making the invention in its
proper form.
Activities The innovation activities are wider
and cover all the department of the
organization.
The main task and activities related to
innovation are done in research and
development.
Concerned
with
The innovation is for the varieties
of products and services of the
This is concern with an particular
product or process.

organization.
Value and importance of innovation to organization
The innovation is very vital for every organization to sustain and enhance the profit in the market
because the competition is being very high and to compete the innovation is necessary. In the
current dynamic market place it becomes more important to understand the importance of
innovation for the business (Yu, Duan and Fan, 2020). The values and importance of innovation
within the organization are as under:
Competitive advantage: the current market is being more uncertain so for availing competitive
advantage it is necessary to innovate timely. As there are different competitors in the market who
are also operating in the same field so with the help of innovation in the existing product range
companies can get competitive advantages in the market.
Loyal customers: every organization is need of customers who are loyal with the brand and
remain with the brand for long, and they are keep on adding more customer in the list. When the
organization will keep adding something new to its existing products and also launch the new
products then customers will stay with the organization for long-term, and they will be loyal with
the brand as well (Coccia, 2018). It is very crucial for the brand to understand the importance of
innovation which will help to enhance the profit of the organization.
Unique selling proposition: as it is become more common that every successful organization
must have a unique selling proposition in them. Which is one of their intellectual property and
also provide inspiration to the organization within market. The USP is a kind of innovation for
the company because this is the change which is completely different from all the products in the
market.
Enhance the brand value: the brand value can be enhanced in the market with the effective use
of innovation in the brand. As there are number of organization who are targeting particular
segment in the market in innovative style. This practise assist the brand to enhance in the market.
The culture and leadership style of essence drinks are also supporting in the innovation as
the culture of Essence drink is innovation culture, so they are promoting the innovation within
the organization and outside as well (Sheehan, Garavan. and Morley, 2020). Culture is very

positive towards the innovation and its creativity. Essence is continuously motivating employees
who are having creative ideas and thoughts. They are regularly trying to modify their product of
lassis in the market to improve their social value by lunching new products.
Essence drinks leaders are more engaged in their work and having a safer space to
innovate. The innovative leaders are having their vision to develop their future, they are not
concern for short term goal rather than this they are more concern for long term goals. As they
are performing their activities with maximum potential so with this they uses to develop an trust
and faith in the employees under them. When employees who are having faith in their creative
leader then they are also being more creative and their thining ability also improves with this
practise.
Different form of innovation
The innovation is done in different type and with different techniques, yet the most important
type of innovation are characterized into four type which are as follows:
Incremental innovation: this is one of the common and mostly used innovation form. In this
type of innovation the organization make use of existing tools and techniques and enhance the
value to the buyers (Leal-Rodríguez, Albort-Morant and Martelo-Landroguez, 2017). This
innovation is not for entering into new market, this is done within the existing market place. In
this innovation a small or minor change is being made to add value to its exiting customers.
Disruptive innovation: in this innovation type the organization make use of new and innovative
technologies which is doing to use in the existing market. As this an stealthy type of innovation
because new technology in the existing market will assist to help the organization for better
growth. Technology is being more expensive yet the feature in this are less as well as difficult to
use.
Architectural innovation: in this the technology and skills are taken to the new market to attract
new customer as the market get previous. Basically in this type of innovation the risk is lower
because the existing technology is used (Rantala and et. al., 2018).
Radical innovation: in this what aspect are think by the individual while considering any
innovation. In this type of innovation the new technology in being used in new industry to attract
the customers in different manner.

From this analysis of all the four type of innovation Essence drink should make use of
incremental innovation, because the company need to innovate its drink of lassis. They are not
updating their production technologies and also targeting the existing customer so this is the best
way for them.
The 4Ps of innovation which assist in processing of innovation with the Essence Drinks
organization:
Paradigm: In this P the management of the organization formulate what should be the change
that is incorporated and manner which is used to implement the change. Another things in this is
how this change will be beneficial to generate better profit in the organization. Essence Drink is
planning to launch another variant in the lassi drink which will attract more customer and able to
enhance the profit.
Product: in this P the Essence will be contracting on the process of differentiate itself from other
in the market. The thought of Essence drink is comparatively more innovative because the
customer are already liking the product of lassi and when they will introduce an new variant in
this product than it is more beneficial for the organization.
Process: earlier the product of essence are only available at the stores yet in the inundation they
will as going to improve the availability of stock in the store and the e-commerce is also
introduced by the brand (Zernova, 2021).
Position: the organization is operating over the segment which are having adequate amount to
income and able to invest on food and beverages.
Recommendation for essence drink
Essence drink is going to inopvate its product range and this is a effective way to
compete in the market. When they are developing their product range they should use some
stages which are being more beneficial and effective for them in modification of their product
are: Idea generation: primary the need of customers most be identified with the market and
customers analysis to develop more effective product which can easy to attract the
customers. The essence should know the market in which the innovative product range
will be distributed (Heaslip, Kovács and Haavisto, 2018). So for this Essene should

critically analyse the demand a supply of product in the related market in the primary
stage. Concept definition: in this stage the Essence will determine their product design and
quality and the benefits of using the product so that customers can able to know the
quality of the innovative product. Market analysis: when the product is being fully decided then organization must analysis
the market condition and the trend which is currently in the existing market. Product development: the product is being developed as per the requirement of the
customer in the existing market. As the customer get doored from the lassi drinks so the
essence drink is launching more variant in the lassi so that customers get attracted
towards the brand. Then the product is being produced in the organization (Hughes And
et. al., 2018).
 Commercialization: when the product of Essence drink are being manufactured then with
the effective marketing campaigns and other promotional activities the product is lunched
in the market. They can make use of pricing penetration method to attract more customer
from the market.
Approaches company can take to process innovative ideas
Essence drinks has been suffering a loss in revenue on its existing product and has thought of
launching a new drink which can again increase the revenue. The approach company should be
following are:
a) Research and development: Company can go for research regarding new product. It can
brainstorm on ideas which can create value for the public and its customer segment as
well as work within the budgets. A study has to be undertaken of customer needs and
tastes and examples can be taken of companies who have done such a product launch
before. This will help in formulating a strategy which can help the company in product
development (Prokop and Stejskal, 2017).
b) Product development: After doing the research, company has to focus on acquiring of
ingredients which can make a difference from drinks in market. Trend has been seen that
people prefer to go for health-conscious drinks. Thus, company can take a cue from that

and make the drink more organic in nature. Sample can be tested initially by a group of
customers and feedback taken.
c) Innovation funnel: This is a commercial funnel which goes step wise from creation of
awareness about the product by advertising means, gauging the interest being developed
about the product, evaluation phase where customer gets close to buying the product,
decision where finally customer is convinced, purchase decision where customer buys the
product and revaluation where feedback is given and repurchase when customer buys the
product again. Company can follow this approach initially by advertising, studying the
customer reaction online before product launch, keeping offers to try out the new product
and taking feedback for incorporation in the product improvement (Oeij and Dhondt,
2017).
d) Frugal innovation: This means innovation done keeping in mind the middle class needs
of the customer, i.e. providing desired value in less or minimum costs. Earlier also,
companies have done this innovation for e.g. Tetrapacks being made available of Frooti
for instant consumption, Tata launching the car Nano suiting middle class needs, Aakash
tablets at minimal costs for students etc. Essence drinks can make a product on similar
lines and can innovate in packaging and delivery systems.
e) Distribution system: Company can tie up with retail grocery malls to keep the new drink
in beverages section which can promote the product and increase sales, at vending
machines it can be made available, other distribution systems which are convenient from
budget point of view can be used. Company can go for an online sale through digital
mediums.
Part 2
Background of the company and problem
Essence drinks is a company started three years ago and it entered the market with an innovative
product of healthy mango lassi. The product has an Indian touch and uses unique formula as per
traditional touch. The company had worked out a good distribution system which was working
fine. In the third year, the company started facing problems in sales as they started declining
because of competition prevailing in the market. This was unforeseen as the company was
receiving success but now has to take steps to address the situation.

Importance of using commercial funnel
The importance of commercial funnel refers to the buying process through which companies lead
customers to the process of buying the products.
The company follows a process of seven phases to sell the product through funnel approach as
follows:
A) Awareness phase: The prospects get to know about the awareness of solution.
B) Interest phase: Interest is created or demonstrated in product-by-product research (Kahn,
2018).
C) Evaluation phase: The prospect examines the solutions of competitors when inching
towards buying decision which is final.
D) Decision phase: The decision is reached finally and thus the negotiation starts.
E) Purchase phase: The goods or services are purchased in this phase.
F) Revaluation phase: It’s the phase where contracts need to be renewed. The customer gets
familiar with the product and as the contract draws to a close, the customer enters the
revaluation phase where they decide whether to renew the contract.
G) Repurchase phase: The customer does a repurchase of product or service.
Matching goals to resource and capability
The company has the resources to make a healthy drink according to the tastes of the customers
and has done and got success earlier. Company has a goal to succeed with the new product while
retaining its old product. The company has to generate capability of doing market research and
find out the tastes and habits prevalent in customers, develop product on a new scale and
accordingly, it has to follow the commercial funnel path to make the new drink a success (Godin
and Vinck, 2017). Before launch of the new drink, company has to do research sufficiently to
know the prevalent tastes of the consumer. It is a common knowledge that cola has been famous
in people especially youth. Therefore, company has to make something different which is right
on the health note as well as taste. A mixture of soda and fruit juice may be thought of as it will
cater to the taste as well as be healthy too. This will help in differentiating own product from
others. Regarding pricing, company can mark it at the same rate of cola thus creating a substitute

for customers. Customers may prefer to choose a tasty and healthy drink instead of cola. Further,
innovation can be done with flavours of seasonal fruits which can make it more popular.
Advertising can be done with a catchy phrase that the ‘New generation drink has arrived’, which
can create a buzz.
Costs which will be involved
Particulars Amount (GBP)
Research 8000
New product ingredients 3000
New Equipment 5000
Advertising 4000
Total 20000
Company can simultaneously retain its old drink with some product innovation by adding
some healthy vitamins and minerals in the drink to bring in customers. Assessment of risk can be
done in a way that being a new product, it may or may not click but if the product is well
researched with customer demand in needs, it will find its segment for sure.
Value analysis applying frugal innovation
Frugal innovation is the innovation designed by the market factors of customer needs particularly
in the traditional middle-class segment. The middle-class segment has invoked many big
corporates to follow frugal innovation to generate sales of products. For instance, Tata Nano is
an example of frugal innovation (Kahn, 2018). Frugal innovation can also be said to cut down on
excess pricing and deliver what the customer actually needs. Essence drinks can use this method
to develop a drink which is low priced as well as suit the customer needs.
Summary of new idea and its effect on stakeholders
The business having new idea of introducing a new product is an innovative step and has to be
analysed. Company is thinking of launching a new drink which does not have competition as of
now in the market. The idea if well-researched can bring up revenues as it will not have
competition from others and there are not many healthy substitutes for the drink as company has
found out. This can work for the company along with having a positive effect on the
stakeholders. Company’s stakeholders as of now are the owner, employees, suppliers and

customers. People will be excited about the new idea and would be motivated after the decline in
old product being observed. Through promotional activities of awareness spreading in
customers, many people would like to try out the new product thus boosting sales.
Techniques for testing the effectiveness of new drinks
The ways in which company can test the effectiveness of new drinks is:
a) Company can introduce a sample for testing the product, it can be tried out on customers
who are regular and feedback can be taken from them.
b) If it is in positive, then the further production and promotion can be done and if some
changes are suggested in feedback, then it can be incorporated in the final launch (Godin
and Vinck, 2017).
c) Company can run test ads by taking the business online and see the viewers reactions on
the launch of the new drink.
d) If the feedback is in positive, then company can be assured to carry on with the product
and promotion.
e) Also, talking of effectiveness of drinks’ production, the costs going in production have to
be calculated and profits to be matched if they are able to contain the costs.
f) Feedback of friends and family: Taking close feedback of family and friends before the
launch of product is also a good idea for testing the effectiveness of the product.
g) They will be able to tell exactly about the product being good or not or what changes are
required.
Resources required for proceeding with innovation case of business
Funding for market research
The market research can be funded through:
Seed funding: In this method, the owner of the business invests capital and the kith and kin of the
owner also contribute in the funding to do the market research. Essential drinks can use this
method to get funding for market research.