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Table of Contents
1. Introduction .......................................................................................................................................... 2 2. Theoretical Framework ............................................................................................................................. 3 2.1 The innovation ........................................................................................................................................ 3 2.2 2.3 Innovation characteristics that encourage rejection ........................................................................ 3 Complex Decision Making ................................................................................................................. 4

1. Need Arousal:........................................................................................................................................ 4 2. Consumer Information Processing........................................................................................................ 4 3. Brand Evaluation: .................................................................................................................................. 4 4. Purchase Cycle: ..................................................................................................................................... 5 5. Post Purchase Dissonance/ satisfaction: .............................................................................................. 5 2.4 2.5 3. Segmentation and Targeting............................................................................................................. 5 Consumers Adoption of Innovativeness ........................................................................................... 7 Analysis of Smartphones innovative Evolution .................................................................................... 8 3.1 3.2 Smartphone Market Demand ....................................................................................................... 8 Competition in Smart phones Market .............................................................................................. 8

Apple: ........................................................................................................................................................ 9 Nokia: ........................................................................................................................................................ 9 Samsung: ................................................................................................................................................. 10 HTC: ......................................................................................................................................................... 11 RIM: ......................................................................................................................................................... 11 3.4 Future Market trends ........................................................................................................................... 12 3.4 5. Innovation and Performance Analysis of Smart Phones................................................................. 13 Conclusion ........................................................................................................................................... 14

1.

Introduction

Innovation is described in the Business Dictionary as a product or service which will be paid for by people. According to the aforementioned dictionary, to be termed as innovation, a concept or idea have the ability to be replicated at an economical cost and also must satisfy certain need. This report discussed the innovation and product development in smart phones category around the globe. The theoretical implications of innovation, adoption and diffusion, and consumer decision making processes are part of the critical literature review. The market trends, demands, consumers innovativeness, and innovation critics of smart phones comprised the latter part of the report. Smartphones are a sub-class of phones within the mobile phones class. Within the category of smartphones there exists no exact definition, although in this thesis smartphones will be identified as handheld devices capable of cellular voice and data abilities that are run on any one of these existing operating systems: Symbian OS, Windows, Android, Windows Phone 7, BlackBerry, Palm OS (Access), webOS, or Mobile Linux; these operating systems are tailored to operate within Smartphones. The middleware and user interface support are the key attributes of the operating system, third party applications can now be installed due to this tailored function of a mobile computing element (ABI Reseach, 2011). In comparison to non-smartphones, the phrase Smartphone is widely used to classify a device with more advanced computing and connectivity capabilities (pcmag.com). The components of smartphones do not define them, which often involve a more powerful microprocessor, portable media player, a web browser, a large memory, or by features that maybe optional, such as a wireless charger, GPS, Wi-Fi etc. Instead, are classified due to their customizable and highly functional experiences, combined with their ability to produce an employment of a mobile phone combined with a personal digital assistant. The main functions of smartphones consist of data,

cellular voice and PIM (personal information management) functions such as calendars, tasks, contact managers, e-mail, notes. These must work in collaboration along with the other features of the phone. The featured phone category is similar to that of the Smartphone. The featured phone, just like the Smartphone will combine the application of a mobile phone with that of a personal digital

2. Theoretical Framework 2.1 The innovation

Innovation is a wide concept, Incremental innovation and radical innovation can be distinguished and also product innovation and process innovation. Incremental innovation refers to

improvement of a service, process or product while by radical innovation it is meant that a breakthrough is made with respect to the innovation before. According to Malerba (2008), the second kind of innovation is more likely to provide a sustainable advantage through creation of new market segments and needs. One of the main elements which facilitate adoption by the means of acceptance and diffusion is the nature of innovation. Innovations five attributes are accordingly identified by Rogers (2003) which, if met, allow diffusion to foster: Compatibility, triability, simplicity, relative advantage and observability.

2.2

Innovation characteristics that encourage rejection

Diffusion of an innovation can be rejected or delayed due to downside of any of the five mentioned factors. Two categories have been devised to summarize the obstacles which paralyze the want for adopting an innovation: Psychological Barriers and Functional Barriers (Ram and Sheth, 1989). There is more likelihood of functional barriers to arise when the perceived change by consumer on either not adopting or adopting an innovation is important. Value Barriers,

Usage Barriers happen when an innovation is not compatible with existing habits of the consumers; this category involves innovations which require changes in routine of customers. Value barriers occurs when the innovation lacks advantages over its supersede products or substitutes. Risk Barriers represent the consumers uncertainty, with respect to each innovation, of possible side effects.

2.3

Complex Decision Making

Depending on the products nature, social factors and consumer factors, two possible buying behaviors are there which are Low Involvement Buying Behavior and Complex Buying Behavior. Consumer is highly involved with the product in Complex Buying Behavior and important differences are perceived by the consumer between brands. According to Kotler and Gary (2006), the products importance is not considered in Low Involvement Buying Behavior and they do not identify with it. Provided the considered nature of innovation (high-tech), the one that fits most is Complex Decision Making. A complex Decision making model proposed comprises of five phases: Brand Evaluation, Post Purchase Evaluation, Need Arousal, Consumer Information Processing and Purchase (Assael, 2004).

1. Need Arousal: The start is always with the consumer recognizing a particular need which
needs to be fulfilled. The consumer is given motivation in such a situation to act towards achievement of this goal.

2. Consumer Information Processing: According to Matsuno (1997), In Complex

Decision Making consumer is involves consistently with the product and information is received passively by the consumer while they actively start looking for additional one.

3. Brand Evaluation: Throughout and after the phase of information gathering and
processing, the consumers compares how well the various brands might satisfy their needs.

4. Purchase Cycle: Immediate purchase is not likely to be the result of consumers Decision
Making, the options like selection of model, shops or websites, and complete information of tentative purchase are some instrumental actions, can delay the actual purchases.

5. Post Purchase Dissonance/ satisfaction: The dissonance/ satisfaction resulted after

purchase of innovative product is based on the actual or perceived performance of the product. The acceptance of an innovative product largely depends on this stage t create a stronger word of mouth (WOM) for further marketing success.

2.4

Segmentation and Targeting

In Smartphone category, segmentation and targeting are important to affect the decision making process of suitable group of consumers and business segments. Segmentation is performed on the bases of these factors: 2.4.1 Demographic: The distribution on the basis of factors like sex, income, race age, occupation, and family size constitutes the basic characteristics of market segments. Kotler (2012) stated that these characteristic differ on individual consumers and demonstrates the preference of certain brand in specific price category that suits the demographic variables. For smart phones, age, occupation, and income classes are most important variable to divide the target markets. Mostly, young and middle class professionals are main targets of this product. 2.4.2 Psychographics: The personality and life style factors are also important in consumers decision making process. The reason of election of a particular brand, venue, and style of products is explained by the personality factors. Kotler (2012) emphasize that the external conditions and internal inclinations of consumers determine their life style and choice of products. In smart phones category, busy and urban life style is more important with professional inclinations of target consumers. The cyber mode of living with multi-purpose utilization of

electronic gadgets is major life style factors of these target groups. Marketers use the contemporary and extremely socially intertwined life style of youth and young professionals in their advertising campaigns for smart phones. VALS model (Keller 2012) determines classes of personality, in which innovators and experiencers (high innovation, high resources) are the most important target group for smart phones.

2.4.3 Behavioural: These factors determine the enduring traits and purchasing behaviors of an individual consumer. The purchase frequency, usage rates, time of purchase are some important determinants of behaviour (Shiffmann and Kanuk, 2012). In smartphones category, the

innovation speed is high with tough completion among major players; therefore, the usage rates and purchase frequency are variable with low time product life cycle. Though, Lastovika and Joachimsthaler, (1988) argued that personality traits and purchase behaviour have very weak relationship, but in case of trendy products like smartphones, purchase behaviour is strongly linked with the personality inclinations.

2.5

Consumers Adoption of Innovativeness

Adoption time is an important parameter for each of the five categories of adoption to facilitate marketers in product diffusion comparisons to the product life cycle stages, also apply marketing strategies suited to different classes of adopters. The segments are however not built upon the characteristics of adoption time. Innovators are the most important group of smart phones users who play a major role in adoption and diffusion of these new varieties, The high-level income group of innovators with extreme social mobility and professional education are the initiators of this category due to their high risk attitude (Rogers 2003; Kavak and Demirsoy, 2007).. The opinion leadership of this group is also very high that facilitates the encouragement of the other groups of consumers. Hirschman (1980) discussed another group in the class of innate innovativeness who process information at high rates and act creatively in purchase decisions. These consumers belong to high income groups but with low level of opinion leadership. The third important group is experiences who learn with experience only and this ability help them to acquire better products in a particular category but they adopt it after very long time and new innovation is already or about to take place.

assistant.

3.
3.1

Analysis of Smartphones innovative Evolution

Smartphone Market Demand

Although in 2010 the smart phones only made 23.3 percent of the total mobile phones shipped, it is expected to increase to 45.3 percent by 2015 as the number currently grows of all the handsets shipped. Furthermore, the total number grew to around 289.000.000 as the shipment saw an increase of 63.5 percent from 2009 till 2010. This increase was due to the demand for more data services, increased understanding of the smart phone value proposition and decreasing prices (AdMob, 2010). Ad Mob (2010) also asserted that high user involvement of smart phones is undeniable. The consumers visits on the websites of smart phones producers also increased in every year with the increase in usage rates. AdMob Metrics (2010) added that these websites visits increase show the popularity if these devices in middle income groups. On average, an increase of 40% visits per year is recorded since 2009 and visitors spend about 80 to 90 minutes per day using online applications from these sites. Another aspect of smart phones is their status of a friend to their consumers. Some important attributes are information storage, social networks, personal connections, and entertainment venues ( Ourmobileplanet.com). The drivers of purchase are strong diffusion of smart phones in laptops, replacement of personal computers, and high resolution mobile communication. The battery life and effective performance are two additional parameters of the choices for these devices.

3.2

Competition in Smart phones Market

Initially, the market was limited to few giant mobile producers like Apple and Nokia, but with increase in mass consumption and geographical markets of Asia and Africa, competition has become intense in smart phones category. Raythatthan et al (2009) expressed that smart phones are high-end communication devices offer high profit margins and allow even small but

technically sound companies to achieve large sales volumes and economies of scale. The major global Original Equipment Manufacturers (OEMs) of smartphone industry are Apple, Nokia, Samsung, HTC, RIM, and Motorola The discussion on their product offers are as follows:

Apple:
Apple is the original creator and global leader in smart phone market. The iPhone series has reached to iPhone 5S with exceptional design and applications collection. Apple has generated only 4% revenue in shipments of mobile phones and 17,5% generated in Smartphone in 2010 (Ad Mob 2010). The exception qualities of iPhone series is Apple own operating system iOS, millions of applications, and iTunes network with built-in iPod features.

Nokia:
The leading giant in mobile phone industry, Nokia, has also offered three series in smart phones category. These segments include N-series, the highest price and most advanced technology for consumers markets; E-series, designed for enterprise customers with factor design and integration of corporate email, offered direct competition to RIM in business market.

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Samsung:
Samsung, the Korean, electronics giant, has come up with knock down competition with Apple iPhone compatible Galaxy S series. The Samsung own operating system bada, low price, exceptional features, and large size are some visible characteristics of this emerging leader of smart phones category.

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HTC:
HTC is Taiwanese OEM of smart phones with specialization in this category become a top global producer and supplier. The HTC models are working on Google android and Windows OS but leading the market in enterprise solutions with low price and competitive features.

RIM:
RIMs famous brand Blackberry smart phone market is business consumers and enterprise solutions. Company has to increase the marketing efforts to its business consumers due to the switching towards Apple iPhone series. Young market segments are future target market of this brand to expand the market coverage and sales volumes.

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3.4 Future Market trends

The recent market trends in smart phones market is dominated by Android operating systems. These phones are not simple mobile devices and use as a complete solution of e-commerce transactions, multimedia communication, and personal organizer. The strong connection of consumers with these devices as compared to laptops and personal computers, the purchase drivers and marketing strategies are largely dependent of expanding smart phones as replacement of laptops. The selection and usage of smart phones are determined by the latest t trends in market and advertising themes used by OEMs. Raythattha et al. (2009) asserted that the possibility of shakeout in recent years depends on four vital market trends including hardware and software transformational advancements, highly tough competition, standardization, and cheaper models from industry leaders like that of Samsung success story. Therefore, the future market of smart phones is expected to be flooded with PC compatible, highly advanced, and

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economical brands for all income groups with customized solutions to needs of specific target market.

3.4

Innovation and Performance Analysis of Smart Phones

If the iPhone family is analysed, the lithium based screen of size vary from 3.5 inch to 5 inch in iPhone 5S, with a resolution range of 1136 by 640 and 326 pixels in a square inch. iPhone has evolved from a simple featured innovator in smart Phone industry to a leading players after six years with a latest front-to-back manufacturing representation, revised after iPhone 3GS. Therefore, it can be said that since iPhone introduction by Apple in 2007, theses devises have shown an iterative improvement in the history of mobile phones. The application based surrounding and touch screen revolution of these models have changed the definition o traditional mobile phones by transforming them from manual operating electronic gadgets to ultra modern form of infotainment. Every generation of smartphones have been an enhanced version of the previous one in every manufacturer category ranges from Nokia N-series, iPhone five versions, and Samsung Galaxy series. On the other hand, the competitors of iPhone series, HTC has introduced gorgeous casing and multiple camera settings and strong processors, Samsung has introduced Galaxy S-series with eye motion sensitive video processing in compatible prices, and Nokia Lumia is famous for its wireless charging and ultra sensitive screen for efficient touch screen functions.

Yet, in the functions like, internet browsing, communicating, photos snapping, and games playing, all these competitive models nearly functioning the same. The fancy fillers of software and hardware in thee closely similar models are only to impress the target consumers and use as positioning strategy in target markets.

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The future expectations of present smart phone technology will certainly be better performance in camera functioning. Stronger screen, more real life compatibility, artificial intelligence, and longer lived batteries. The future smartphones innovations need to be of evolutionary stages to get transformational phases of discovery. The experts are forecasting that the future smartphones will be interacting with surroundings ion much better ways through modified applications and will make consumers cap[able of performing various functions and operating electronic gadgets through these devices. Data transfer and information retrieval will be at much higher speed and the memory capacity will be extended to Tera bytes (TB).

Another area of smartphones interaction in future are controlling mechanical devices and built in meters like accelerometer, gyroscope, barometer, and others. For example, Samsung Galaxy S4 has introduced pressure, humidity, and temperature indicators to get more accustomed to the physical environment. The inclusion of sensors to measure air quality, light intensity, pollution detector, will help consumers to select a safe environment for their family and self. The role of smartphones as remote controls of television and other electronic devices can also provide more applications to the consumers. Furthermore, the extensions of smartphones applications tp medical devices like glucose-meter, blood synthesizers, and other commonly used medical devices will be worthwhile innovation in hardware and software of these devices.

5.

Conclusion

In conclusion, in the future Smartphone environment and recent innovations, these devices have proved to be a new revolution in the tradition functioning of common mobile phones. The applications of these devices vary from data collection and analysis to the applications in entertainment and life style elements are truly most important. The constant addition of

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components, features, and advancement in software make these devices more interactive with the environment. The Wi-Fi, Bluetooth, and NFC protocols of communication enabled these devices to communicate more effectively with other computing devices. The players like Apple, Nokia, Samsung, Motorola, RIM, and HTC have offered constant innovation in their successive models but act quite similar in main features with some frill differences. The innovation in camera operations, interaction with devices, and use in main streams of medical and climate awareness will be more worthwhile in future advancements of smartphones.

Therefore, it is concluded that consumers are mostly using Smartphone as a social tool in the actual applications to communicate and utilize millions of applications available online. The business world and common users both have advantages of this remarkable product and needed these phones to be more adaptable to their physical environments and provide th capability to control the changes in external environment. It is recommended that companies should go beyond increasing the screen size and pixels of camera shots because this device can actually control and monitor the external environment of consumers.

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Critical Reflective essay

In this reflection, the most amazing fact I want to admit is how wonderful and amazing this module has proved through thought provoking and stimulating course work. Having studied this module, I have gained the necessary knowledge and skills in the areas of innovation and product development. The informal and formal assessment of module learning through out this period has reinforced the learned concepts. In making and designing the assignments and essays of this module, I have drawn my threads of knowledge, new theories and applications of innovation, structuring and formation of systematic data. In the beginning of this module, the concept of innovation in business and marketing were barely known to me besides attending many management courses before. The traditional marketing planning and designing knowledge were my basic resources at the start of this course. For the first time, I have studied the in depth concepts of routine and transformational innovation in designing products and services. The communication and designing tools used in these processes along with the established theories and procedures like product life cycle, diffusion and evolution of innovation, innovative marketing strategies and many others were part of this stimulating learning experience.

In particular, I have faced communications issues in my previous courses and normally resulted in failures in producing a structured and productive course assignments and communicate with people in effective manner. Whereas, I have at all times benefit from appealing continuous professional development, have found this module experience as selfdirected study and reintroduction to advanced technical aspects of marketing in challenging and rapidly changing environments (Shuttleworth 2008). This few months experience has motivated me in the areas of professional organizations strategies, managerial implications, and continued transformation to meet the challenges of market demand. As an undergraduate student, my major area of interest is

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marketing practices and planning to derive consumers satisfaction and created new needs and demands. However, the first of the two key areas of this module are marketing designing, in which the marketer is anticipated to do extremely well to enforce the vision of company policies/ Services/ and products to the common consumers. Through the studies marketing practices by organizations like Uni-Lever, Procter & Gamble, Apple, Google, and many others, the practices like understanding the needs of target market, segmentation and positioning of offered products/services, and designing marketing strategies and plans to suit the future needs and anticipations of this target market. This area of the module is equipped with the case studies of real life organization marketing issues and designs of the respective solutions by using the work of scholars like Philip Kotler,. Michael Porter, Kevin Lane Keller and others. The other key area of this course, innovation, is connected with the survival of organization in turmoil and creation competitive advantage. The factors which enhance an innovative organization growth are strong vision for longevity, aspirations for adoption and reinforcement change, understanding of target markets future needs, and creating pleasant surprises for consumers regularly through product/ service innovation. The adoption areas of innovation in society also depend on the awareness of target market, readiness, suitability, and competitive advantage of the offered product at right time to the target market. Though, many innovations are underappreciated and undervalued by their consumers but they must have not achieved the winning combination of time, resources, customer readiness, and technological advancements. For e.g., Apple is world renowned company for innovative products in mobile and entertainment industry, but has been very specific in launching its innovative products like iPhone, iPod at a particular time and to the right target markets. Therefore, the learning of this concept include in

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depth study of the target market, competitors, substitute products, and technology advancement in a particular industry.

Despite being involved in the course reading and materials provided throughout the module, lack of practical applications in field and liberty of assessing the popular approaches used in the industry are some hindrances felt by me. Due to the short duration of module, I have read only few texts on marketing and innovation and did not able to draw a detailed and in depth account to this module. In my personal view, continuous innovation is also not suitable for the target market as consumers take some time to adjust with a new product and in the mean time, if another new model launched, then post purchase dissonance accounts for it. For instance, I have worked on Smart phones innovation and evolution as a course assignment. In this work, I have come across the bedazzlement of the consumers of overwhelming marketing and overnight launching of new models from the main players like Nokia, Apple, Samsun and others. This rapid advancement and Gorilla marketing of these smart phones OEMs have created confusion and anxiety in target consumers. I did not find any of my friends and relatives completely satisfied of the models they currently have and found them busy in searching for new better versions in the market just to stay at par. This blind race of innovation is visible in other industries also like electronics, computers, and entertainment. Therefore, in my view, stability phases should also come in these rapidly changing scenarios of consumer marketing in these industries as the competing companies actually set the pace of the consumer decision making and switching behaviour.

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In summary, this module has covered many of the aspects of marketing design and innovation that has added loads of new learning in me and makes me capable of drawing conclusions and devising marketing plans. Through constant practice and more advanced study of practical applications of these concepts in real life cases will surely add up the outcomes of this module. The formalized and self-directed learning of this module inspired me to take initiative and drove me to prepare and independent study assignment on innovations in smart phones category. Therefore, this effective learning experience, irrespective of the limitations, has made me more competent in above discussed areas and I will surely be using the expertise in my desired professional domain of marketing and innovation.

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References: Shuttleworth S. (2008) 'Selfdirected learning for lifelong career development', In Practice, vol. 30, no. 5, pp. 287289.