The meaning of commercialisation funnels and their importance to organisations
The commercialisation funnel describes the process of generating ideas, turning the ideas into tangible products, services, or processes that are introduced into the market. It examines production, distribution, marketing, sales, and customer support. The success of any new product in the market is a function of effective passage through the commercialisation funnel. The process should involve idea capturing, connecting the ideas to competence and resources, converting ideas, verification of functionality/prototypes, and implementation which includes marketing and post sales.
Innovation funnel describes the process through which products/services/processes are moved from the ideation stage through to the development of tangible products and/or feasible processes with which organisations become more efficient and there are better value provided to the stakeholders. However, the commercialisation funnel is a developmental framework which improves on the innovation funnel to incorporate marketing into the developmental process.
The process involved in the development of new products
To stay successful in the face of maturing products, companies have to obtain new ones by a carefully executed new product development process. However, it is of crucial importance to understand consumers, markets, and competitors in order to develop products that deliver superior value to customers. In other words, there is no way around a systematic, customer-driven new product development process for finding and growing new products. Therefore, we will go into the eight major steps in the new product development process.
Number 1 of New Product Development Process: Idea Generation
a) Internal idea sources: the company finds new ideas internally. That means R&D, but also contributions from employees.
b) External idea sources: the company finds new ideas externally. This refers to all kinds of external sources, e.g. distributors and suppliers, but also competitors. The most important external source are customers, because the new product development process should focus on creating customer value.
Number 2 of New Product Development Process: Idea Screening
Number 3 of New Product Development Process: Concept development and Testing
• Concept 1: an affordably priced mid-size car designed as a second family car to be used around town for visiting friends and doing shopping.
• Concept 2: a mid-priced sporty compact car appealing to young singles and couples.
• Concept 3: a high-end midsize utility vehicle appealing to those who like the space SUVs provide but also want an economical car.
Number 4 of New Product Development Process: Marketing Strategy Development
The marketing strategy statement consists of three parts and should be formulated carefully:
1. A description of the target market, the planned value proposition, and the sales, market share and profit goals for the first few years
2. An outline of the product’s planned price, distribution and marketing budget for the first year
3. A planned long-term sale, profit goals and the marketing mix strategy.
Number 5 of New Product Development Process: Business Analysis
Number 6 of New Product Development Process: Product Development
Number 7 of New Product Development Process: Test Marketing
Number 8 of New Product Development Process: Commercialisation
Some factors that should be considered before the product is commercialized:
1. Introduction timing: For instance, if the economy is down, it might be wise to wait until the following year to launch the product. However, if competitors are ready to introduce their own products, the company should push to introduce the new product sooner.
2. Introduction place: Where to launch the new product? Should it be launched in a single location, a region, the national market, or the international market? Normally, companies don’t have the confidence, capital and capacity to launch new products into full national or international distribution from the start. Instead, they usually develop a planned market rollout over time.