Research and development (known colloquially as R&D) is an inevitability of capitalist markets. New innovations usually outpace yesterday’s technologies. However, many R&D products fail to transition from development to the marketplace. In this work, Ramanujam and Tacke suggest that many of the failures can be avoided by proper management of pricing prior to the start of the project. In truth, this work is an in-depth look at how to set the price of an innovation.
The authors set up several common pitfalls in deploying research as well as specific principles that lead to success. They ground their work in success stories of several companies across a variety of industries. They detail these use cases in the second half of this work. Each chapter also provides accessible summaries along with several “CEO Questions” to address C-suite accountability.
The central insight the authors seek to posit is to put pricing early in the development process. This requires some market research (especially customer feedback) and the involvement of distribution teams (like marketing and sales). Early pricing also requires teams to prioritize customer-driven requests – development from the “outside-in” instead of from the “inside-out.” Finally, this practice requires a bit of courage to say “no” to bad ideas.
The authors unfortunately do not address non-profit centers of innovation like research universities. They face many of the same problems to implement innovations, but have less infrastructure to derive revenue and profit. What’s more, their innovations are often more grounded in basic science than current practice. This makes pricing, in terms of both structure and a dollar figure, even more difficult due to a lack of information about potential markets. By examining this common use case, the authors could have made their theory more general while addressing a significant new audience.
For these reasons, the authors limit their potential audience to those within the business community, especially managers of research, researchers, and the C-suite. The size and age of the company does not matter: Large companies and lean innovators can both benefit, as can established companies and start ups. More generally, this book is for anyone dealing with pricing from R&D. Sustaining revenue and profit in tomorrow’s conditions requires thoughtful and deliberate work. This work will shine the light on the steps required to succeed.
Monetizing Innovation: How Smart Companies Design the Product Around the Price
By Madhavan Ramanujam & Georg Tacke
Copyright (c) 2016
Wiley
ISBN13 9781119240884
Page Count: 241
Genre: Business/Management, Research
www.amazon.com