This article discusses one approach to innovation involving changing the way a product is delivered to customers. Building on the work of Kim and Mauborgne in the book Blue Ocean Strategy, Jackson acknowledges the appeal new product concepts with limited competition in “Blue ocean” competitive environments. The challenge for most consumer goods is coming up with entirely new products that have strong customer appeal, because most consumers have a familiarity and loyalty to products they already use. One solution to this is channel innovation. This involves finding new ways to deliver products that consumers already use and love.
The author uses case studies of successful consumer products channel innovations in the areas of baked goods, juice drinks, pizza, salad and fresh produce.
The key lessons from the case studies are in three areas: understanding consumer frustrations with how existing products are delivered; understanding the value of the channel innovation through comparison with alternative substitute products or services; and embracing new technology that can make new delivery channels work.
The key message of this article is that innovating new products is good but executives need to recognize and take advantage of consumer loyalty towards products they are already familiar with. Channel innovation provides a valuable lens to develop and evaluate new products ideas that have a much higher chance of consumer acceptance than entirely new to the world innovations.
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