Innovation and Commercialisation Strategies for Essence Drinks Company

This report examines the concepts of innovation and commercialization, emphasizing their importance for organizational growth. It uses the case study of Essence Drinks, a beverage company facing declining sales of its mango lassi, to illustrate these concepts. The report explores the differences ...Read More

Innovation and
Commercialisation

Table of Contents
INTRODUCTION................................................................................................................................3
LO1.......................................................................................................................................................3
P1 The concept of Innovation and its importance to the organization in comparison with
invention..........................................................................................................................................3
P2 The impact of organisational vision, leadership, culture and teamwork in shaping Innovation
and commercialisation.....................................................................................................................5
LO 2......................................................................................................................................................6
P3 The 4Ps of innovation and the use of innovation funnel to examine and shape innovative
ideas.................................................................................................................................................6
P 4 Explaining development in the Frugal innovation.....................................................................7
LO 3......................................................................................................................................................8
P5 The importance of commercial funnel and application of New Product Development
processing for Commercialisation of Innovation. ...........................................................................8
P6 Innovation business case for Essence Drinks Company along sources to access of funds .....10
LO 4....................................................................................................................................................11
P7 Tools used by the organisation in order to protect its intellectual property and Knowledge....11
CONCLUSION...................................................................................................................................11
REFERENCES...................................................................................................................................12

INTRODUCTION
Innovation is a systematic process of discovering and coming up with new ideas and
strategies in order to make a new product or modify the existing one, so that it can lead towards the
growth and success of organization. Invention is the process of coming up with new ideas as well as
executing and implementing those ideas by conducting a systematic flow of activities relating to the
invention of the product and initiating the innovation process for the company. The report is based
on the case study of “Essence Drinks” company, which is a beverage company famous for its
product called “mango lassi”. The company has decline in their sales and thus it comes up with the
innovation process to acquire back in the market. The report will highlight on the innovation procss
of “Essence Drinks” company. It will also focus on the difference between innovation and invention
components. Further the report highlights on the different types of innovation and the process of
commercialising an innovation. The report will also mention the ideas and techniques used to
protect the rights of the company in innovating a product.
LO1
P1 The concept of Innovation and its importance to the organization in comparison with invention.
Innovating
Innovation can be defined as transforming unique and different ideas into practices. It results
in providing more effective and qualitative services to to customers.
Invention:
The term invention can be defined as a process of launching some new product or services

or any idea in the market that yet has not be served ever before. Intention refers to generation of
new ideas in context of new engineering or scientific methodologies or techniques.
Difference between innovation and invention:

Basis Innovation Invention
Definition Innovation is a process of discovering new
ideas related to products which further
impacts positively on the growth and
success of the organization. Innovation is
concerned with different activities that
supports its process, that includes market
research, identification of customer needs
as well as creative thinking of the
company(Prajogo, 2016).
Invention is defined as the
entire process of generating
ideas and techniques in order
to develop a new product in
such a way as it has never been
developed before.
Required skills Professional managerial and technical
skills are required in innovation process.
Scientific skills are the core
requirement of the invention
process.
Limitation of
activities
Innovation is a never ending and ongoing
process and is not limited to any extent. It
spreads all over the organization.
Invention is limited up to the
research and development
activities of business and
mainly dependent on it.
Concern Innovation process is mainly concerned
with combination of products, services and
other different process of business.
Invention whereas is
concerned with only one
product.
Importance of innovation in case of “Essence Drinks” company-
Innovation means to discover a new idea and invention is concerned with the generation
of ideas as well as executing them in the development and invention of a new product. Essence
Drinks had come up with the innovative product of “Mango lassi” initially and been able to
acquire its success in the market by gaining maximum sales revenue from it in the past.
Currently there is decline in the sales of the “Mango lassi” and the company is again coming up
with a product innovation in the market. The new product that Essence Drink will launch in the
market is a “Chocolate lassi” which will be chocolate flavoured lassi. The main reason behind
this product launch to increase the sales revenue of the company and acquire the same position as
before in the market. There is a rise in today's trend regarding the healthy food consumption by
people, so this will pay a way for the “Chocolate lassi” to acquire maximum market share
through increasing its customer base and sales revenue for the company(Saebi and Foss, 2015).
The importance of the innovation process can be further explained as follows-
 Innovation process will enable Essence Drinks to achieve its primary objective of
increasing the sales revenue.
 Innovation process leads to the competitive advantage to the firm from its rivalries and
competitors.
 Innovation process will retain the existing customers of Essence Drinks company and
also create the new customers and enhance enlargement of customer base for the
company.
 Innovation being a never ending process that continuously contributes to the growth of
the organization as nothing remains constant in the current trend if market as well as
customers, the needs, preferences and tastes of customer changes withinh a span of time

and hence the innovation helps to fulfil this requirement and enables the survival of the
firm in long run period.

Thus, it is purely justified that the process of innovation always contributes towards the success
of the organization in present and future time period and ensure its survival in the market.
P2 The impact of organisational vision, leadership, culture and teamwork in shaping Innovation
and commercialisation.
The purpose of innovation is to find out new ideas and the invention is concerned with
actualising that ideas through a systematic process of conducting different ideas to convert the
idea into real outcome. As far concerned with the business objective the main goal of these
processes of innovation and invention is to commercialise or sell the innovated product in the
market to the customers. Commercialisation is a post process after innovation that include
different activities such as marketing, advertisements and other promotional activities that attract
the customers in buying the product(Ortiz-Villajos and Sotoca, 2018).
In order to make the product available in market there are different products that imparts
the process of innovation and commercialisation. They are as follows-
Vision- Vision of the Essence Drinks company is to currently increase the sales revenue of the
company. This will enable the company to frame different marketing strategies to increase the
sales of “Chocolate lassi”. Further the vision enables the focus on customer satisfaction in order
to initiate an effective marketing process of the company. This will result in the successful
product launch and hence ensure the success of innovation and commercialisation process of
Essence Drinks company.
Leadership is organizing and directing the employees of the company considering the company
goals and objectives and also fulfilling these objectives resulting in the company's growth and
development. Leadership includes different styles such as Autocratic, democratic and Laissez
Faire leadership. Company decides the best suitability of these types and adopts a particular style
that could support and contribute towards its innovation process. Essence Drinks company
should adopt Laissez Faire leadership in its management. This leadership style involves
participation of employees in company's decision making. Innovation is concerned with
discovery of new ideas and thus the employee's participation makes the process of innovation
more flexible as it includes their contribution of ideas to the company or can say by considering
the depth of the organization that could result in pros and cons of a particular idea and
accordingly contribute in the innovation process. This leadership style will also initiate the use of
several marketing techniques and ways to promote “Chocolate lassi” in market for its successful
launch. Thus, Leadership style adoption plays an important role to shape innovation and
commercialisation process of the company(Mahmoud and et.al., 2016).
.
Team is a component that involves contribution of group of individuals in performance of a
specific task according to the plan, achieve targets being assigned by the organization and solve
different problems of the organisation in crisis situation and performing various activities of the
organization. In order to perform the various tasks and activities of the innovation and product
launch process, Essence Drinks company has to assign different teams for the completion of
these tasks for the commercialisation of “Chocolate lassi” such as marketing, promotion,
advertising and all other tasks related to the commercialisation of product. The individual efforts
of the team members consisting of coordination among them to perform these tasks in efficient

manner will bring out the success of innovation and commercialisation process of the company
and accordingly ensure the importance of Teamwork as an effective tool in shaping the
Innovation process.
LO 2
P3 The 4Ps of innovation and the use of innovation funnel to examine and shape innovative
ideas.
The 4Ps of innovation also known as innovation mix are the components that are
importantly considered by the organization while initiating an innovation process. The 4Ps of
innovation are as follows-
Press- Press is a relationship between the human beings and their environment. It ensures
that the customers shall be provided healthy products and which are not hazardous to the
environment. “Chocolate Lassi” is a health oriented drink which is best for the customers in all
demographics and thus fulfil the requirements of press mix(Shiu, 2017).
Product- Product is the main component that is being offered to the customer after its
modification and invention. Innovation and commercialisation process is mainly dependent on
the type of product the company invents. Essence Drink, the company should be aware of the
product it has innovated and launched in market to know the outcome of its innovation process
and know the value that is added by the product to the organization.
Process- Process of innovation is concerned with the manufacturing and distribution
process of the product. Manufacturing process includes the technology to be used in the
manufacturing of a product and is concerned with the process of production and operation.
Distribution process comprises how the product will be available in market and in what stores
and shops the product will be available. Essence Drinks must consider the best process of
manufacturing as well as distribution in order to attain the objectives of its innovation process.
People- People includes the target group of individuals and customers to whom the new
product will affect. In simple terms people are the ones to whom the product will be sold by
influencing them through different marketing strategies. Essence Drinks must set up the different
target groups of people so as to forecast their demands and needs related to the product and
frame strategies to fulfil these needs and requirements(Herrera, 2016).
Innovation funnel- Innovation funnel consists of different steps that describes the innovative
ideas into a systematic manner. These steps of funnel lead to the effective implication of
innovation and commercialisation and its success for the company. First step of the funnel
includes collecting information and conducting research by the company to forecast the various
needs and demands of the customers as well as identifying a tool to accomplish these needs.
Second step includes the screening process which involves evaluation of different ideas related to
the innovation process and select the best idea for implementation and continue the process.
Third and the final step involves the final execution of selected idea into the process for making
the product and bring it into action. Essence Drinks can adopt the innovation funnel which will
enable them to collect various information regarding the demands of the customers as well as
their core needs and requirements. Further it will make the company the best idea of solution that
could fulfil these customers demands and select the most appropriate option for the execution.

Finally, it could help the company to apply these ideas and remedies for conducting the
innovation process and contribute in achieving the objectives of the business by success of the
innovation process.
Innovation funnel in the essence drink innovation
The innovation funnel can be used while innovating the essence drink and implementing
range of ideas in the most appropriate way. As per this funnel, first of all the innovated idea of
chocolate drink must be identified and defined in the properly. By using this funnel, the proper
way of innovating essence drink could be determined effectively. It helps the business in having
a critical thinking about the new idea, its impact on the business' sales, company's profitability,
etc. in this regard, using the innovation funnel, the essence drink would be implemented in the
most effective way.
P 4 Explaining development in the Frugal innovation
Frugal innovation
Frugal innovation can be termed as a concept of bringing innovation in the business by
using the minimum amount of cost and resources. Adoption of this technique results in
enhancing the ability of a company of being cost efficient while bringing any innovation in the
business.
There are some principles that are needed to be followed by a firm while adopting Frugal
innovation methodology. Its core principles are as under:
 Engaging and iteration: A company should make an in depth research about needs of

customers and their behaviour towards the company (Rosca, Arnold and Bendul, 2017).
Further. It should also analyse and observe that how an innovated product can enhance
the positive behaviour of customers towards the firm.
 Flexing the assets: A business can adopt new techniques and tools for the purpose of
innovating the existing products. This adoption can bring flex in the assets of the
company. Further, it would also help the managers in flexing the production, services
assets and enhancing the level of customer satisfaction.
 Creation of sustainable solution: The firm needs to develop sustainable solution for its
own business. It would result in developing solutions for both the company's business
and its working environment.
 Keeping the solution simple: Company should not develop any complexity in the
solution, as it may cause in development of complication in the problem.
 Best use of resources: The company must efficiently use its resources. It would help the
firm in gaining maximum return from the minimum resources.
 Be passionate: The company needs to stick to its ideas and passionate about its goals and
objectives behind the innovation ideas. It would result in enhancing the performance of
the company.
Example: In the year 2012, Kingfisher developed a new goal of net positive (Frugal innovation:
Six principles and a case study from the new book, 2017). Through this goal, it decided to return
all the natural resources that was extracted by it while doing its production. The company
decided to adopt Frugal innovation method, through which it developed various ideas like
making minimum usage of natural resources, without compromising with its quality of product.
In this order, company developed various ideas like making continuous communication
with employees about required changes to enhance their commitments, designing new closed up
challenges, etc. It resulted in providing sustainable changes in the company and enhancing its
ability to achieve its goals.
Essence Drinks company can use this innovation methodology in the following way:
 The company can develop new techniques of production. This would help it in innovating
its production process.
 Use of the latest production technique may result in reducing the process of production
and cost of production as well.
 With the help of it, Essence Drinks company would be able to reduce the price of its
products in the market. It would help in attracting maximum amount of customers
towards it.
 Further, the company can also innovate its ideas of advertising its products as to gain the
attraction of its customers, capture maximum amount of customers and regain its market
positioning as well(Gassmann and et.al., 2016).
LO 3
P5 The importance of commercial funnel and application of New Product Development
processing for Commercialisation of Innovation.

Commercial funnel is the process in which the company make the product available to the
customers by influencing their buying decisions and actions. Commercial funnel is also called as
sales funnel(Visnjic and et.al., 2016). The importance of commercial funnel can be explained by
the following components -
 Sort and Rank sales leads- Commercial or sales funnel will enable Essence Drinks
company in creating an organized process for evaluating, ranking, sorting and prioritizing
the sales leads. This means it will enable the company to set the priority among its
customers and let them sort regarding the delivery of products as well as the target of
sales of the company.
 Focus on the right sales Leads- Sales funnel will enable Essence Drinks to purely focus
on the correct targets and accordingly allocate the dedicated time for the right consumers.
It will also enable Essence Drinks company to communicate and interact with their
customers in order to follow up their commitments for their purchase of the product and
also their required modifications in the product as well as their response towards new
product.
 Helps to project reasonable goals and obtain them from internal and external sales
team- Since commercial funnel is the process of conducting the sales related activities in
a systematic manner, it will enable Essence Drinks company to have an overview
administration of its sales activities. This will turn help the company to set up different
short term sales target and goals that can be met by the sales team and accordingly
conduct the systematic processing of the sales activities.
 Systematic monitoring and accountability- The definition of commercial funnel states
the systematic management of sales activities in an organization. Thus, it will help
Essence Drinks company to have the uniformity in its sales activities and accounting
process as well as provide the complete record of sales so that company can monitor the
changes arrived and the strategies to be framed related to it(Datta and et.al., 2015)
New product development process for Essence Drinks Company-
New product development is a process of developing a new product in the market. NPD
include following steps that are been initiated by Essence Drinks Company-
1. Idea generation- The company has come up with an idea of inventing a chocolate
flavoured lassi in its categories of lassi products.
2. Idea Evaluation- The idea to invent a new flavoured lassi will be implemented by
inventing “Chocolate lassi” which will contain the flavour of chocolate in it.
3. Concept Definition- This stage will be determination of product and packaging design of
“Chocolate lassi” and what all specifications to be written on the package.
4. Strategic Analysis- This stage will include framing and setting up of the total cost of the
product considering various direct and indirect costs as well as including profit margin.
5. Product Development- Here the development of product according to the requirements
of the customers will take place. It will include the certain changes and modifications in
the product as per the need of the customer.
6. Market Testing- This stage will include the complete market study as well as conducting
research so as to identify the target groups of customers to whom “Chocolate lassi” will

be sold.
7. Commercialisation- It is one of the important step in the product development as it will
include finalising the pricing strategy as according to the market demands and what
strategies to be adopted by the company for selling “Chocolate lassi” at higher volume.
8. Product Launch- This is the final stage of NPD where the product will be launched in
the market through implementation and application of different strategies discussed
above.
Illustration 1: chocolate lassi
(Source: Gayathri Pai's Food Bytes:
Chilled Chocolate Lassi, 2018)
Illustration 2: Nutritional table
(Source: SELF Nutrition Data |
Food Facts, Information, 2019)

Price and packaging
The price of the chocolate lassi has been set to € 40. the reason behind setting the lower
price is to attract maximum customers towards the innovated product and achieve the business'
goals and objective.
Further, the packaging of the lassi has been designed in an organic form. Further, the lassi
would be provided in a 6 layers packaging. It would help in maintaining chocolate lassi
appropriate to be used for a long time.
P6 Innovation business case for Essence Drinks Company along sources to access of funds
Innovation business case for Essence Drinks-
Executive summary-
Essence Drinks is a food and beverages company based in UK mostly known for its
“Mango Lassi” product. Due to decline in its sales volume for the “Mango lassi” the company
had come up with innovation and launch of its new product.
Requirement-
The company will require automated machine for the manufacturing of its new product at
faster rate as well as different distribution channels for the product to be made available in the
market.
Solution-
“Chocolate lassi” is the new product being launched by Essence Drinks company as n
outcome of its innovation process. Further the company will opt from different financial sources
to enhance the use of advance technology and to use the automated machines for the production
as well as for promotional activities.
Need of Innovation- The primary need of innovation and inventing new product is to increase
the sales volume of Essence Drinks which is currently declined in the market.
Market Research- The company will target the youth and children in UK economy as the
Illustration 3: Chocolate lassi
ingredients
(Source: CHOCOLATE LASSI,
2018)

reason for using the chocolate flavour in lassi is to attract the children and youth.
Investment Required-
Particulars Amount (£)
Machinery and Direct Cost 10000
Market Research Expenses 2000
Technology and labour cost 5000
Advertising and promotional costs 8000
Total 25000
Benefits expected-
 To increase 15% of the sales revenue of “Chocolate Lassi” over the period of every 3
months till the end of 2019.
 To increase 40% of overall sales of the company at the end of 2020.
The following are the different sources of funds which Essence Drinks can access-
 Own Capital- The company may invests its own savings out of the profits and the liquid
assets.
 Family and Friends- The Directors as well as owners of the company can borrow funds
from their families and relatives over the low rate of interest or by providing the equity in
the business.
 Bank Loans- The company can avail bank loan on its total value of assets and
profitability in balance sheet.
 Other sources- Essence drinks company can use other sources to avail finance such as
issue of equity or preference shares, venture capitalist investment and many more(Zhou,
2015).
LO 4
P7 Tools used by the organisation in order to protect its intellectual property and Knowledge.
Essence Drinks can use four types of tools to protect its intellectual property namely: patent
right, trademarks, trade secrets, copy rights.
Patent-However, a patent provide property rights on an innovation, permitting the patent holder
to exclude others from making, promoting, or the usage of the discovery. Moreover, inventions
permit organization to be successful due to the fact they expand new or better tactics or products

that provide competitive benefit at the market. Further, There are three types of patent right
which can be used by the company like utility, design, plant.
Trade mark- Further, a trade mark is an expression, symbol, or design that differentiates the
supply of merchandise or services of one enterprise from its competitors. Thus, on the way to
qualify for patent safety, the mark must be exceptional.
Trade secret- Moreover, trade secret is a formulation, process, tool, or other information that
corporations keep confidential to provide them a business gain over their competition. Examples
of exchange secrets and techniques encompass of Soda formulation, customer lists, Survey
outcomes and algorithms etc.
Copyrights - Last but not least, Copyrights are used to defend real works of owner, such as
written material, song, dramatic tasks, mimickery and choreographic works, sculptured, graphic
designs, and photo works, sound recordings, artistic works, architectural structure, and software
program etc (Clauss, 2017).
.
CONCLUSION
From the above report it is studied regarding the importance of innovation in the business
activities and its vital role in the growth of the business. The report also studies the different
factors and components that leads to the success of innovation and commercialisation process of
the business. Lastly the report concludes with the tools that can be adopted by the organization to
protect its intellectual property and knowledge of innovation process from other parties.

REFERENCES
Books and journals
Clauss, T., 2017. Measuring business model innovation: conceptualization, scale development,
and proof of performance. R&D Management.47(3). pp.385-403.
Datta, A and et.al., 2015. Understanding commercialization of technological innovation:
taking stock and moving forward. R&d Management.45(3). pp.215-249.
Gassmann, O and et.al., 2016. Innovation Strategy: From new Products to Business Model
Innovation. In Business Innovation: Das St. Galler Modell (pp. 81-104). Springer
Gabler, Wiesbaden.
Herrera, M.E.B., 2016. Innovation for impact: Business innovation for inclusive growth.
Journal of Business Research.69(5). pp.1725-1730.
Mahmoud, M.A and et.al., 2016. Market orientation, learning orientation and business
performance: The mediating role of innovation. International Journal of Bank
Marketing.34(5). pp.623-648.
Ortiz-Villajos, J.M. and Sotoca, S., 2018. Innovation and business survival: A long-term
approach. Research Policy.47(8). pp.1418-1436.
Prajogo, D.I., 2016. The strategic fit between innovation strategies and business environment
in delivering business performance. International Journal of Production Economics.
171. pp.241-249.
Saebi, T. and Foss, N.J., 2015. Business models for open innovation: Matching heterogeneous
open innovation strategies with business model dimensions. European Management
Journal. 33(3). pp.201-213.
Shiu, E., 2017. Good Practice of Creativity and Innovation Management in Business. In
Handbook Of The Management Of Creativity And Innovation: Theory And Practice (pp.
175-189).
Visnjic, I and et.al., 2016. Only the brave: Product innovation, service business model
innovation, and their impact on performance. Journal of Product Innovation
Management.33(1). pp.36-52.
Zhou, J., 2015. The Oxford handbook of creativity, innovation, and entrepreneurship. Oxford
University Press.

Rosca, E., Arnold, M. and Bendul, J. C., 2017. Business models for sustainable innovation–an
empirical analysis of frugal products and services. Journal of Cleaner Production. 162.
pp.S133-S145.
Online-
Innovation Funnel template. [ONLINE] Available
through:<https://slidemodel.com/templates/innovation-funnel-diagram-template-
powerpoint/>
Gayathri Pai's Food Bytes: Chilled Chocolate Lassi. 2018. [ONLINE] Available through:
<http://gayathrifoodbytes.blogspot.com/2015/05/chilled-chocolate-lassi.html>
CHOCOLATE LASSI. 2018. [ONLINE] Available through:
<https://myhappykitchens.blogspot.com/2016/04/chocolate-lassi.html>
SELF Nutrition Data | Food Facts, Information. 2019. [ONLINE] Available through:
<https://nutritiondata.self.com/>