Innovation - Vending Machine and Shoes - Case Study Example

Executive Summary This is a report on vending machine & shoes. Various types of Innovations are presented in the report with their marketing, social and economic impacts clearly analyzed. Throughout the report, the focus on shoes vending machine innovation is analyzed from its basic level and its challenges and prospects are presented chronologically analyzed thereon. Information on continued promotion of selling shoes through the use of vending machine has also been extensively explored. According to Dillon et al. (1994), the current progressive competition in the world market of this innovative way of making sales is perceived critical to establishment of a strong bargain platform among other competitive firms selling similar products. The report also provides a comprehensive review in vending shoes through the use of vending machines Table of Contents Table of Contents 2 2.0 Footwear vending machines 3 3.0 Characteristics of potential customers/analysis of consumers who use vending machines 3 4.0 External Environmental analysis 4 4.1 Political factors 4 4.2 Economic factors 4 4.3 Social factors 4 4.4 Technological factors 5 4.5 Environmental consideration 5 4.5.1 Product Recycling 5 4.6 Legal factors 5 5.0 SWOT 6 5.1 Strengths 6 5.2 Weaknesses 6 5.3 Opportunities 6 5.4 Threats 6 6.0 Innovation management: 6 7.0 Model for managing innovation: 7 8.0 Challenges Encountered by footwear vending machines 7 9.0 Conclusion 7 10.0 References 8 1.0 Introduction Vending machine has become an innovative way of direct sales of shoes in the modern market. This method of vending is widely recognized in selling disposable shoes which are cheap and easily packed. The use of vending machine has become commonly used in the ever growing market. As information technology grows fast, different products must be availed to the customers in different ways to ensure that the company survives current market turbulence. Thus, vending machines continuously evolves through provisions of strategically designed products. Business growth and expansion is a major objective of many organizations. Even though not all firms endorse growth as their foremost goal owing the responsibilities and challenges that accompany growth, a lot of firms aspire to grow through innovation of new technology. Such growth has been accomplished both externally as well as internally. Marketing strategies play a major and an important role in modern business environments (Capon, 2009). The variables are crucial for business management to combating challenges arising from the market forces, which stem from shifting and unpredictable political, technological, environmental, socio-cultural, legal, financial and economical dynamics (Capon, 2009). Product development is a critical process in modern day marketing management. Modern businesses are finding it fundamental to invest in encouraging development, implementation and monitoring innovations in product and service delivery (Capon, 2009). 2.0 Footwear vending machines Footwear vending machines has been used to vend disposable shoes in the market. However, e-marketing and other forms of advertisement have used to evaluate the features and to make the vending machines user friendly, and also provide appropriate, effective and quality services to the user. Most of the companies have adopted modernized vending machines to their product thus saving the businesses time and money and boosting sales. Moreover, vending machines allows for introducing variety products to sell and allows consistency of the product in the market. Shoes vendors have gone further to use new technology of coming up with machines that dispense a range of shoes and issue receipt upon the transaction. This feature satisfies the needs of both the seller and the purchaser. The machine is made with features that are allows compatibility with the type product it has been designed for. 3.0 Characteristics of potential customers/analysis of consumers who use vending machines Footwear vending machines are designed to satisfy the needs and expectations of modern, busy and enterprising businessperson (Voss & Fynes, 2002). The companies using this innovation moves away from imitating what other companies selling shoes do, to creating differentiation (McCubbrey et al., 2006). That is, services those not only offer basic satisfaction, but also go a mile a head to make the life of the user interesting and productive beyond what a normal product entails. Characteristics of target market are, known by analyzing the demographics. The characteristics of the potential users of Footwear vending machines are for individuals who are technologically literate and they are meant for both male and female. The Footwear vending machines are accessible to the urban and peri-urban areas, and since most of them are high- value and relatively costly product, the target market include high and middle class customers. 4.0 External Environmental analysis PESTEL (Political, Economic, Social, Technological, Environmental and Legal factors) is a type of marketing analysis tool, where one analyzes and monitor the external pressures of the Footwear vending machines. 4.1 Political factors In production footwear vending machines, it has been imperative to comply with existing political guidelines and regulations and opinions of politicians. Vending machines products have gained significant reputation and majority of the users are governmental organizations. Inclined political good will of these products is derived to numerous activities associated with vending machines i.e. involvement in stadiums and in and environmental concerns. In developing economies like India, political influences have not participated in Footwear vending machines but it is projected that like in the developed nations political pressures will directly affect the market which directly involves innovation. This is important because mass market follow fashion trends set by their opinion leaders, and politicians’ falls under this category. Among other political pressures that relate to the product is the government attitude towards product innovation and business development in general (Voss & Fynes, 2002). Production of the product will comply with tax, labor, and ecological laws. 4.2 Economic factors This entails taking into consideration economic factors that are going to influence not only the production and marketing using vendor machines but also their distribution, delivery and usage among the expected clientele. This includes focusing on the economic development of the region where the target market is, the current interest, inflation, foreign exchange, and employment rates (Voss & Fynes, 2002). Foreign exchange rates influence the expenditure for importing and exporting products, this will affect the products’ global distribution and marketing. 4.3 Social factors In introduction of shoes vending machines, analysis of socio-cultural factors is necessary. This entails taking into consideration the social elements such as health awareness of the labor force and the surrounding community, the target market’s population growth rates, importance given to safety issues and the attitudes of the target market (Timmons, et al., 2004). Meeting consumer satisfaction means producing quality services; to a great extent shoes vending machines are customized to dispense specified products. This has only been possible to US and developed economies market due to technological competence. 4.4 Technological factors Since footwear vending machines are technological product, it is essential to evaluate the technological changes and automation issues in order to produce services that would not only satisfy the customer present technological needs, but also will still remain technically viable and feasible in the future. Technological factors if not paid attention to, the product will lack the appeal and not sell since the factors does influence quality of a product, costs and are considered as source for product innovation (John, 2006). 4.5 Environmental consideration Consideration of environmental issues surrounding the development, production and use of the product or service The initial step to analyzing success of eco-innovation and environmental polices is to understand the determinants of the international dissemination of non-environmental innovation. Focusing of diffusion of those innovations that have turned to be globally effective, one can observe that majority of such innovations became globally successful after becoming successful in one country. The leading country stay ahead in penetration of the market for sometime supplying many firms with long-term user feedback, a factor that allows them to regularly improve the innovation and consider environmental factors that might come up with continuous innovations. For vending machines, it is important to ensure the production, marketing, distribution; usage and disposal are in line with environmental conservation policies and guidelines, there has been a great problem in product disposal which has made Non Governmental Bodies and the Ministry of Environments to come out claiming there should be new laws to cub environment unfriendly activities like disposal of inorganic matter(McCubbrey et al., 2006).This is because the markets are currently environmental aware, and therefore they will shy away from products that are not eco-friendly. However, the companies that use vending machines have come up with measures to conserve environment (McCubbrey et al., 2006). 4.5.1 Product Recycling 4.6 Legal factors The demand and costs of vending machines are also influenced by legal factors. Therefore, it is important to consider the labor and consumer laws in place, quality standardization guidelines and safety and health policies, to make the product a success. Legal factors will influence the workforce, the production processes and systems compliance to the mentioned laws (Ucbasaran, Wright & West, 2008). There are legal procedures that need to be met in order to satisfy the marketing policies of any economy. In these countries footwear vending machines has been smooth since the footwear vending machines are fully used by most of the citizenry. 5.0 SWOT SWOT analysis entails analyzing the strengths, weaknesses, opportunities and threats to the product (Chapman, 2006). 5.1 Strengths - Footwear vending machines are eco-friendly since they are minimizing that packaging process and since the firms selling disposable footwear have instruction on recycling of especially the disposable footwear. Most of the vendor machines are made by using green technology. That is, they are produced using renewable, recycled and energy saving raw materials. -For their charging, footwear vending machines products do not rely on power energy alone, but it has been, made to charge using alternative energy such as solar energy. They can dispense a lot of disposable shoes in strategic points hence a person in need of these shoes can get them at one convenient time. 5.2 Weaknesses - Using footwear vending machines is relatively expensive -Lack of a well structured network of sales and distribution of footwear vending machines market. 5.3 Opportunities -Innovation has come up with vending machines that are manufactured with cheap material at low costs, and still maintain the quality of the service to customer, which will be convenient to both the customer and the shoes seller. - They are mobile and can be place at strategic positions in town. 5.4 Threats The main threat to footwear vending machines are the hawkers and other door to door sales persons who deliver their shoes door to door. There is a major threat also from the thief who vandalizes these machines. 6.0 Innovation management: Structuring a sustainable proficiency for innovation needs a firm to harness employees’ creativity. Those companies that involve a big work force have a very high innovation result compared to those with small workforce. Though firms often do not put much effort on innovation talent in their establishment, they restrict innovation to selected departments in the firm. As much as the number of employees matter a lot, their diversity matters as well. Many companies view innovation as the major domain of R&D alone, or marketing and R&D. however, in shoe vending machines and other supply chain innovation is key to companies output. 7.0 Model for managing innovation: The introduction of vending machine designs has been a factor for understanding the reason early adoption in one place has brought about success in sales in the targeted region. John (2006) describes an innovation design as a configuration or a specification of an innovation idea. Various innovations of shoe vending machines fulfill the same function but differ in modes and specifications. A dominant design is defined as a design that has been adopted by the majority of vendors and has won allegiance in the market place. An innovation that is dominant is the one that has been adopted by most users. A company that responds to the idiosyncratic demands achieves temporal innovation success in the market but is later forced to switch to the pioneer design something that forces it to loose its pioneer advantages. 8.0 Challenges Encountered by footwear vending machines These include such things as the disposable income available to the individuals. It also refers to things like the inflation levels and the rates of interest. It could also refer to the level of taxes and the price fluctuations. As far as consumption is concerned, economic factors are the greatest influence to the consumption patterns (McCubbrey et. al. 2006). They affect demand as well as supply of the goods available to the consumer. McCubbrey et. al. (2006) the consumer’s tastes and preferences change based on the income level. According to McCubbrey et. al. (2006), a raise in the income level causes the consumption pattern of an individual to change. It is therefore important that the marketer should follow the income patterns of his market. This will help him to develop the goods that will influence him towards achievement of his goals (McCubbrey et al. 2006). The high income people tend to go for the high priced goods (Solomon 2002, p 89). A marketer can come up with marketing programs that incorporate the niche market. He can do this by creating advertisements that catch people’s attention as well as the design and the pricing system (Ucbasaran, Wright & West, 2008). 9.0 Conclusion Footwear vending machines are products in the information technology industry, which currently, has elicited so much interest, as new technological solutions are developed everyday. According to Armstrong and Kotler (2006), vending machines have become fundamental to the mass market as it has been able to challenge other methods of vending, has allowed producers and suppliers access to markets and has eased products vending. The innovation in this industry is presently keen to deal with issues of diminished participation costs, taking advantage of the gaps in the market to come up with an easy mode of transacting, addressing specific consumer needs and addressing changes in customer relations (Armstrong & Kotler, 2006). Therefore, for the shoe vending machine to succeed in the competitive and innovative industry, the features in the machines, must address specific needs of a modern businessperson who is always on the move, and needs to accomplish a lot within a short period of time and with least costs. Many traders and designer have welcomed the innovation of shoe dispensing vendor machines. In most case this machines have been place new clubs, stadiums and joints where mainly the youth will buy dispensable shoes for a specific occasion like for a dance. A vending machine in this case has proofed to be hassle free and convenient. 10.0 References Armstrong, G., Kotler, P. (2006). Marketing: an Introduction. Upper Saddle River, N.J. Prentice Hall. Baltzan, P., Philips, A., & Haag, S. (2010). Business driven technology: New York: McGraw Barringer, B., & Ireland, R. (2006).Entrepreneurship: Successfully launching new ventures. New Jersey: Prentice Hall. Boone, L.E. & Kurtz, D.L (2010).Contemporary Business. London: John Wiley and Sons. Burstein. (2008). Cost control, Journal of cost management, (6)2, 47-52.Business Journal, 26(38), 9. Capon, C. (2009).Understanding the Business Environment. London: Financial Times Prentice Hall. Chapman, R.J. (2006). Simple tools and techniques of enterprise risk management. Sidney: John Wiley and Sons. James J. C. (2003). Entrepreneurial mind: Journal of Business Venturing, 67(5), 19 John, L. M. (2006). High tech starts up, revised and updated: The complete handbook for creating successful new high tech companies. New York: McGraw Hills McCubbrey, D, Donovan, R, Haag, S, Cummings, M., &Pinsonneault, A., (2006).Management information systems for the information age (3 edn). New York: McGraw Hill Companies. Ucbasaran, D., Wright, M., & West head, P. (2008). A longitudinal study of habitual entrepreneurs (starters and acquires). Business Venture, 6 (3), 6-7. Voss, C., &Fynes, B. (2002). The moderating effect of buyer-supplier relationships on quality Practices and performance. International Journal of Operations & Production Management, 22( 6), 6-10. West Sussex, UK: Wiley Blackwell. World Development Report (2010). Knowledge for Development. Retrieved 29 December, 2010, Read More