L&I 05 11/03/2024

Market Pull Innovation

Approaches to Innovation Management
Source of knowledge
 Technology
 Needs
o It is basically our ability to know something about the customers, most
likely something that the people want to be satisfied.
 Language
o How physical objects communicate to the person using them.

When the innovation process starts from technology  technology push innovation
 We already have a technology, and we use that to solve a need
There is a gap in the market and we want solve it, in this case the starting point is the
market  market pull approach.
The third way is about the ability to understand that certain product attributes can
convey if experienced in a particular contest  design push
Four Innovation Strategies
These 3 (+1) strategies can be clustered on two
dimensions: technology of the solution
provided, so exploiting technologies to carry out
radical or incremental innovation, and
meaning, which can be innovated leveraging
on the language spoken by the product or
service.
We the market pull we can just have an
incremental change.
Innovation of meaning is not an alternative to
innovation in technology and functionalities; they could be combined, so in this case
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we talk about technological epiphanies, which are products or services with an

improvement both in meaning and technology, such in Nintendo Wii, where there
was a new radical technology (the motion control) and a new meaning in console
games (no more something for geeks in a virtual environment, but something to
create a positive social environment that could be exploited also by non-gamers, like
families)
Examples: Wii, Apple iPhone, Google Nest, Apple Ipad…
Creating Value in a B2B setting: A New Application of a Technology to Business
Requirements?

With a market pull approach, we are starting with the final users to try to understand
how we can satisfy their needs.
Approaches to innovation management

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Market-pull approach
 Synonymous to a User-centered approach to innovation
o Focused on analysing the current sociocultural context
o Focused on understanding what the consumer wants from the
products/services he/she purchases
 Our market is people. We therefore need to know what they want.
But asking them directly rarely works, because they often
have no idea what they want until they see and experience
it. That means we need to get information about them indirectly,
particularly information about what they value. Rather than focus

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on products as such, we need to look at the wider context in which

people use them.
Market pull innovation is when innovation is gathered through the analysis of
users’ current needs.
If we listen carefully to users, we have a very big space for innovation, so we should
not engage the users at the end when the product is developed, but the sooner they
are engaged the better it is, in order to get their feedback.
Therefore, the sooner we do the prototype, the sooner we are given the feedback.
An example of this approach is given by Amos Winter’s wheelchair, developed by
improving the prototype, which was given to users to receive their feedback.
So, market pull innovations are innovations that typically involve the way in
which the product is
commercialized in terms of organization, distribution and/or advertising.
Therefore, we should put
attention on product presentation, distribution channel innovations, incremental
product performance innovations and sales process innovations.

IDEO is specialized in innovation process: here we can see the example of the creation
of IDEO’s shopping
cart thanks to a market-pull approach.
It is better to see experienced users, not simple users, even if it is risky
because we risk reducing the
diverging idea generation at least in the first phases, so this is quite the opposite
compared to innovation
of meaning.
Particularly, we have a modular approach where elements are tested to understand
with trial and errors if
they are worthy or not. Therefore, we need to generate a lot of ideas, which will
be filtered and then we
will focus only on the most promising ones, which are selected by allowing the
designer to put himself in
the environment, in order to understand better the need of the consumer and take the
right decision on
the best ideas to implement.
Even if, the whole shopping cart didn’t succeed, several ideas that IDEO’s team had
were implemented in
the market. So, this process generated some good ideas that could be
exploited for something else, even
if the product was not successful.
One of the main legacies of IDEO is that we have not only to set the best strategies
and pick the one we like
more, but we have also to pursue the selected strategy in the correct way. So, we
must consider the
innovation process as a funnel with inputs that produce potential ideas, which
must be filtered, in order
to screen and select the best ideas with respect to goals, targets and
budget. Then, we have to tunnelling,
so we should speed-up the development of some ideas tryi
Definition of Human-Centered Design?
 Human-centered design is a creative approach to problem solving. It’s a process
that starts with the people you’re designing for and ends with new solutions

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that are tailor made to suit their needs. Human-centered design is all about
building a deep empathy with the people you’re designing for:
o generating tons of ideas
o building a bunch of prototypes
o sharing what you’ve made with the people you’re designing for
o eventually putting your innovative new solution out in the world.

Phases of the Human-Centered Design?

It is a process made by inspiration, ideation and implementation. All of the things
said until now fall into the concept of design thinking, which is an umbrella concept
that contains user-centredness, prototyping, gathering users’ feedback and so on.
There are different ways to accomplish design thinking, such as creative problem
solving or innovation of meaning.
1. Inspiration Phase: you’ll learn directly from the people you’re designing for as
you immerse yourself in their lives and come to deeply understand their needs.

2. Ideation Phase: you’ll make sense of what you learned, identify opportunities for
design, and prototype possible solutions. It is never easy and it is usually an
iteration.

3. Implementation phase: you’ll bring your solution to life, and eventually, to

market. And you’ll know that your solution will be a success because you’ve
kept the very people you’re looking to serve at the heart of the process.

Case study: Ikea Family Competition

IKEA Foundation launched in 2015 the Soft Toys Drawing Competition. IKEA invited
children to the global competition. 20 dream soft toys drawings by kids have been
selected in each country around the world with IKEA stores. A panel of children’s
product development specialists selected10 winners will based on the uniqueness and
commercial potential. Real toys have been created and launched as limited collection
in Autumn 2015 in the IKEA stores worldwide.
Why Human Centered Design
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“70% to 80% of new product development that fails does so not for lack of advanced
technology, but because of a failure to understand users’ needs.”
An equal amount of effort should be put not only in developing and designing the right
innovation strategy,
but also in designing the innovation process to engage users as soon as
possible. At this regard, we can seethat all the consultancy firms are acquiring design
agencies for their capabilities of considering users and
developing users-oriented innovation processes
Customer vs User

Market-Pull Innovation or Innovation of Meaning?

 LIVSN is a growing company based in North America that produces high quality
apparels based on organic materials and functional shapes.
 They are firmly committed to reducing the impact of the apparel industry on the
planet and recognize that there is a group of consumers waiting for this
transition. This approach led the funder to strongly believe that this sustainable
change begins with a joint effort between the company and its customers.
 LIVSN's R&D department is at the forefront of the textile industry, applying
various techniques to obtain the strongest, lightest and most durable fabrics,
adaptable to any climatic condition. They work to make the customer
responsible by buying less and choosing durable and timeless products.
 They innovate the development of new products by actively studying customer
behavior and learning their needs by establishing a fruitful conversation with
“green” customers, following their motto: "The best way to make quality
products is to listen to our customers", continuously collaborating also in testing
fabric functionalities to collect valuable feedback.
 LIVSN designs only those pieces that can meet customer needs, producing
better and less. To achieve a sustainable transition, they also encourage
customers to repair the final product instead of buying a new one, stating:
"Replace throwaway items with well-designed pieces to eliminate clutter and
make room to live. Keep what matters.
APPROACHES TO INNOVATION MANAGEMENT
Value vs Performance: Kano’s Model

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The Kano’s model is showing us the importance of different performances to join

customers’ needs: Firms should understand which features
are the most interesting and which they should invest in
(which are the delighting features that I must innovate in
order to be competitive on the market?). The Kano’s model
is representing the trade-off between two performances: A
company whose trying to compete in the market should
understand the right point on the trade-off between
performance 1 and 2. The level of competition remains the
same, but the company can improve one value (and
diminish the other) to follow customers’ needs.
 Must have are those attributes that have to be
present so the product has the sense to stay in the
market.
 The delighters are those attributes that are not necessarily but are present
to add value
 Linear attributes: attributed that affect a customer’s enjoyment of the
service, negatively or positively

Understanding user needs

We start from reality to map what the experience is, most of the time is better to
concentrate on a specific niche of people.

Scope: Start from the reality

Here we are in the phase of ideation.
For years we started from the reality but now different approaches are emerging,
we are trying to influence the reality that is now.
Where can we identify INNOVATION AREA?
From the REALITY. Start from the observable present.
 understanding user needs
 Understanding their interactions with products and services,

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 translating these elements in characteristics for new PRODUCTS and

SERVICES.
 Design the process and strategic thinking to generate new user behaviours.
Which users
 Several kinds of user categories
 For each segment:
o Representative users (e.g. core drivers)
o New potential users (e.g. less wealthy users)
o Precursory users (e.g. teenagers)
o Non-users (non-drivers)
o Fringe users (one-handed drivers)
o Advanced (extreme) users (modifiers)
o Unadvanced users (short mileage: lower requirements: disruptive)

Understanding needs
The idea is that we are organizing the needs. The latent needs are those that
emerge from our interpretation of what we observe. Observable needs: just observing
your behaviour I can understand what you need.
The difference between do and make is that there is a more creative part in the make
verb, when we look at what people do is something passive.
According to understand what people say we can just ask them, for example doing
interviews.
What people make is an active involvement of the people in the creation of the
products.

the more we move on the right the more the information is trustworthy and we have
an increased effort with the active role of the users.

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What people say

Source of information
 Secondary sources
 Product Feedback
 Competitors
 Our own experience (pre-empt)
Methodology
 Survey
 Interviews
 Focus group
 Questionnaire and interviews
If don’t develop a good protocol it could be difficult to keep the focus on what we want
to know in the interviews.
 Personal | Email | Telephone interviews
 Choice is based on the type of information and the allocated budget
 Questionnaire design is fundamental to minimize biased information
o Start with defining the sections of the questionnaire in order to:
 Make rational trade-offs between the length and necessity of
various sections
 Ensure all necessary information is collected.
 Eliminate redundancy in the questionnaire.
 Construct a smooth flow of responses throughout the
questionnaire.
 Check ordering requirements.
o Develop the questionnaire to maximize response rate and minimize
information bias
o Pre-test the questionnaire with a sample group of experts
o Conduct a pre-analysis to identify if the data gathering and data
analysis can be conducted as defined in the design of the
questionnaire.
o Issue the questionnaire to the chosen sample

 Focus Group
• Focus groups are fundamentally different from quantitative survey/questionnaire
methods in their purposes, procedures and results
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 Despite this technique constitutes a notable improvement in comparison to the

interviews, it introduces three strong limitations:
o The choice of the representative sample is very critical
o The target customers must be well defined and known
o The observations happen in a controlled context that differs from the
daily context of the single consumer
WHAT PEOPLE DO
 ethnography
 The origins of ethnography
o Rooted in the fields of anthropology and sociology
o Based on naturalistic or participant observation or study of the native
aspects of a culture
 Characteristics of an ethnographic research
o The orientation of the ethnographer is to passively and subjectively
observe a given context
 The researcher must become part of the research situation
o Objectives ... not hypotheses
 Even though an ethnographic researcher needs only a general
question as a starting point for an ethnographic study, he/she must
be well-versed and documented in the art and science of
ethnographic observation
o No statistics
o Highly descriptive and qualitative data
 Interviews, artifacts, contextual descriptions and the triangulation
of data
o No desire to be generalizable.
 The strength of an ethnographic research is to be specific and
detailed

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With ethnography you are a passive observer of what is happening.

What People Do: From Ethnography to Netnography
“Netnography,” or ethnography on the Internet, is a new qualitative research
methodology that adapts ethnographic research techniques to study the cultures and
communities that are emerging through computer-mediated communication.
The limitations of the Web
The web is not:
 Representative
o Because there are different kind of users in the online in comparison to
the offline.
 Complete
 Robust
What people do: Rapid ethnography
“Designers need answers in hours, not months. This means they must adapt
observational and other methods often developed in an academic context to be
practical for them. The trade-off is to gain speed but lose precision” D. Norman.
WHAT PEOPLE MAKE (taking in consideration also what people dream and test)
 Lead user analysis
Today, customers aren’t just voicing their needs to companies that are willing to
listen; they’re inventing and often building what they want.
 Lead Users:
o Face needs that will be commonplace in a marketplace - but face them
before the bulk of the marketplace encounters them.
o Have a strong economic motive to innovate, since they expect to benefit
significantly by obtaining a solution to their needs
o Have capability to innovate
o Lead users are not the same as early adopters— lead users are facing
needs for products and services that do not exist on the market

Two traits:
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 Have needs that foreshadow general demand in the marketplace

 Expect to obtain high benefit from a solution to their needs (Such users are
more likely to innovate- “Necessity is the mother of invention!”)

Open source: user toolkit

Principal features
 Open-source software
o You provided some resources to the users, in this case you learn by
looking what the people do with your software
 Overlapping between user needs analysis and concept generation
 Customer = Designer
Limits
 Customers have to be skilled
 Data gathering (feedback) can be articulated
What people make: Beta testing
 Main characteristics
o Direct involvement of the customers in the project cycles
o Preliminary testing: working prototype in the context of use
o Early Feedback from the customers
 Limits
o Customers have to be skilled
o Data gathering (feedback) can be articulated

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This is a brief recap of the main aspects of each method:

 Questionnaire and Interviews: we should design a proper questionnaire that
is not introducing biases in the information collected, where people have also to
understand the question.
 Focus Group: the choice of representatives is critical, so they do not only have
to be expert in the field, but they have also to interact in a confident way one to
each other.
 Ethnographic Research: by looking at what users do, we learn how to design
a better shopping cart, for example, so what IDEO did was to appreciate those
needs that are observable but not explicit. This method is not so efficient, since
it is quite costly in time and resources, but it is very effective to understand
observable needs. The ethnographer is not a passive observatory of a
given context, but he is embedded in it and acts as a real user.
 Lead Users Analysis: this method is used when the needs are tacit or
latent. When we deal with this kind of needs stickiness is very high, so it is
quite complex to extract information from the user.
Therefore, we have to engage a specific kind of user: the lead users, who
have an expert knowledge of the needs they have. Lead users have an
incentive, not necessarily economic, because they will have a benefit from the
usage of the product. When the user need is very sticky, companies have to find
out the right user with whom interact and work together. They are not the same
of early adopters, who are the first that face needs in a specific market, while
lead users face needs that already don’t exist in the market.
 Beta Testing: development of a product involving customers in the innovation
process to gain feedback by engaging them far away before the launching of
the product, but involving them within the process. So, we develop an MVP
that we test in order to gather feedback.
 User Toolkits: we allow the user to accomplish innovation on its own, so
instead of providing a
solution to the user, we provide tools to them in order to design innovation on
their own, such as Nike that provides a platform where consumers could design
the product on their own.

Co-developing innovations
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So, we can see that with beta testing and, even more, with lead users and user
toolkits, we have a codevelopment of innovation:

Recognizing different types of needs - example

 Federico is a consultant hired by a company which develops kitchen appliances.
 His task is to come up with ideas for a new appliance.
o To do so, he asks potential users if it is possible to spend time with them
in the kitchen.
o During the time in the kitchen, Federico behaves like a guest, having
small talks with the user about various topics.
o In the meantime, he pays attention to the use of the existing appliances,
utensils, and ingredients, as well as any improvisations or workarounds
employed by users. For example, he notices that participants frequently
struggle with limited space and must prioritize certain kitchen appliances
over others due to these space constraints.
o In some cases, he sees the users storing the appliances just after using
them in order to have some workable space.
o In other cases, they process food manually, even if they had an
appliance, just because they don’t know how to make some space for
them.
 Based on this, Federico recommends the company to develop a compact and
versatile kitchen appliance which can perform multiple tasks. Fun fact, Mario,
one of the participants to the study, was actually complaining about his small
kitchen.
Reframing from Needs to Insights to Requirements
 Needs
o Are human physical and emotional necessities
o Capture the goals and the motivations
o Are opportunities, not solutions
 Insights (the ability to look beyond the evidence)
o are the reasons that led to that need
 Why do you think this user really has this need?
 Why is this need surprising or interesting?
o are your reinterpretation of data, observations, user wishes and
statements of needs
o define and frame the solution space
 Requirements
o are the evolution of insights into defined features
o are the functional attributes that enable the team to convert ideas into
design features.

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With reframing we are approaching the problem from a different perspective, I know
the people complaining about the elevator being to small but the problem could not be
the speed but the waiting time. So we are now addressing the problem from another
point of view.
Key Takeaways
 Market-pull: Approach to Innovation Management that is characterized by the
critical role of the customers
 User-centricity: building a deep empathy with the people you’re designing for
 Understanding the users’ needs: tools that support the understanding of
(1) what people say, (2) what people do, (3) what people make
 Reframing: Users’ needs should not be taken as they are. They should be
critically reinterpreted and transformed into insights and requirements for
design.

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