Types and Patterns of Innovation Innovating in India: The chotuKool Project Godrej & Boyce, founded in India in 1897, sold a range of products to the Indian market including household appliances, office furniture, and industrial process equipment. In recent years, international competitors such as Haier and Samsung were cutting deep into Godrej’s market share for household appliances such as refrigerators, washing machines, and air conditioners, and management knew that to preserve the company would require innovative solutions. One such solution was the chotuKool, a small, portable refrigerator. Though around the world refrigeration was considered a mature technology, in rural India as many as 90 percent of families could not afford household appliances, did not have reliable access to electricity, and had no means of refrigeration. This significantly limited the kinds of foods they could eat and how they could be prepared. Finding a way to provide refrigeration to this segment of the population offered the promise of both a huge market and making a meaningful difference in people’s quality of life. As noted by Navroze Godrej, Directed of Special Projects at Godrej, “We imagined we would be making a shrunken down version of a refrigerator. Make it smaller, make it cheaper. And we had preconceived notions of how to build a brand that resonated with these users through big promotions and fancy ad campaigns.” These assumptions would turn out to be wrong. First, as Godrej’s team looked at the options of how to reduce the cost of a conventional compressor-based refrigerator, they quickly realized that they could not reduce its cost by enough to make a meaningful difference. A Second, they discovered that having the refrigerator be lightweight was more important than they had previously thought because many rural Indians lived migratory lives, moving to follow the availability of work. Third, because of the lack of refrigeration, most people were in the habit of cooking just enough for the day, and thus had relatively low refrigeration capacity needs. Fourth, of those few rural Indians that did have refrigerators, many did not plug them in for most of the day for fear of them being damaged by power surges. As Godrej notes, “We were surprised by many things, we were shocked by many things . . . we realized our original hypothesis was quite wrong.” Based on these insights, the company designed a small and portable refrigerator based on thermoelectric cooling (rather than compressor technology). Thermoelectric cooling was the cooling method used in laptops; it involved running a current between two semiconductors. It was far more expensive on a per-unit-of-cooling basis, but it had much lower power requirements and could be used on a much smaller scale than compressor cooling. This enabled Godrej to make a very small, lightweight refrigerator with a relatively low price (35–40 percent cheaper than traditional refrigerators). It also lowered the power costs of operating a refrigerator, and made the refrigerator able to operate for several hours on a 12-volt battery, making it much more adaptable to situations where power was unreliable. In Godrej’s initial plan for the chotuKool, the refrigerators would be cherry red and look like coolers. Soon, however, managers at chotuKool realized that if the refrigerators were just perceived as inexpensive alternatives to refrigerators, they had the potential to be stigmatizing for consumers who, in turn, would not talk about them to their friends. This was a serious problem because the company had counted on word of mouth to spread information about the refrigerators deep into rural communities. To get people to talk about the coolers they needed to be aspirational—they needed to be cool. Godrej decided to revamp the design of the coolers, giving them a more sophisticated shape and making them customizable (buyers could choose from over 100 decorative skin colors for the chotuKool) They also decided to market the refrigerators to the urban affluent market in addition to the rural market, as adoption by the urban affluent market would remove any stigma associated with buying them. To attract this market they positioned the refrigerators as perfect for picnics, parties, offices, dorm rooms, use in cars, and so on. To get the chotuKool to rural customers would require a dramatically different distribution system than Godrej had traditionally used. However, building out a distribution system into rural communities would prohibitively raise the cost of chotuKool, potentially rendering the product nonviable. The development team was initially stumped. Then one day G. Sunderraman, vice president of Godrej and leader of the chotuKool project, happened to inquire with a university official about obtaining college application forms for his youngest son and the official pointed out that Sunderraman could get the forms at any post office. At that moment, Sunderraman realized that the post office, which had offices in every rural area of India, could be an ideal distribution channel for the chotuKool. It was a very novel proposition, but India Post agreed to the collaboration and soon chotuKools were available in all post offices in the central region of India. As Sunderraman noted, “The India Post network is very well spread in India and is about three or four times larger than the best logistic suppliers.” The chotuKool won several design awards in its first years, and after selling 100,000 units in its second year Fast Company gave Godrej its “Most Innovative Company” award. Godrej and Sunderraman were disappointed to discover that it was not as rapidly adopted by rural poor households as they had hoped; the roughly $50 price was still too expensive for most poor rural families in India. However, the chotuKool turned out to be much more popular than anticipated among hotels, food stalls, flower shops, and other small stores because it enabled these small stores to offer higher valued products (such as cold drinks) or to keep products fresh longer, thereby increasing their profits. The chotuKool also became a popular lifestyle product among the urban affluent population who began to widely use them in their cars. Godrej’s experience developing and launching the chotuKool had provided many lessons. They had learned that to radically reduce the cost of a product might require completely rethinking the technology—sometimes even in ways that initially seemed more expensive. They learned that customers who had adapted their way of life to the lack of a technology (like refrigeration) might not adopt that technology even if it was made markedly less expensive. Finally, they learned not to underestimate the value of making a product work for multiple market segments, including those that might not be initially obvious as customers. Though some people considered chotuKool a failure because it had not achieved its original objective of wide adoption by the rural poor, Godrej (and many others) considered it a success: the product expanded Godrej’s market share, penetrated new market segments in which Godrej had not formerly competed, and demonstrated Godrej’s innovative capabilities to the world. College of Administrative and Financial Sciences Assignment 1 Deadline: 03/07/2021 @ 23:59 Course Name: Student’s Name: Course Code: MGT- Student’s ID Number: Semester: Summer 20/21 CRN: Academic Year: 1441/1442 H For Instructor’s Use only Instructor’s Name: Dr. Abdulaziz Alhammadi Students’ Grade: Marks Obtained/Out of 10 Level of Marks: High/Middle/Low Instructions – PLEASE READ THEM CAREFULLY • The Assignment must be submitted on Blackboard (WORD format only) via allocated folder. • Assignments submitted through email will not be accepted. • Students are advised to make their work clear and well presented, marks may be reduced for poor presentation. This includes filling your information on the cover page. • Students must mention question number clearly in their answer. • Late submission will NOT be accepted. • Avoid plagiarism, the work should be in your own words, copying from students or other resources without proper referencing will result in ZERO marks. No exceptions. • All answered must be typed using Times New Roman (size 12, double-spaced) font. No pictures containing text will be accepted and will be considered plagiarism). • Submissions without this cover page will NOT be accepted. Course Learning Outcomes-Covered ? Demonstrate the dynamics of technological innovation concepts in technologyintensive business enterprises. (Lo 1.1) Case Study Weight: 10 Marks Students are supposed to read the Opening Case of Chapter-3 ‘Innovation in India: The Chotukool Project’ (Page Number-43) of their e-textbook. Based on your understanding of the case and concepts studied until now answer the following question in 300-500 words each. QUESTIONS 1. What were the pros and cons of attempting to develop a refrigerator for India’s rural poor? (2 marks) 2. What product and process innovations did the Chotukool entail? Would you consider these incremental or radical? Architectural or Component Competence enhancing or competence destroying? (2 marks) 3. Did the Chotukool pose a threat of disrupting the traditional refrigerator market? Why or why not? (2 marks) 4. Is there anything you think Godrej should have done differently to penetrate the market of rural poor families in India? (2 marks) 5. What other products might the lessons Godrej learned which chotukool apply to? (2 marks) Note: It is mandatory to support each answer with at least two scholarly, peerreviewed journal. Directions: ? All students are encouraged to use their own words. ? Be three to five pages in length (1000-1500words), which does not include the title page, abstract or required reference page, which are never a part of the content minimum requirements. ? Use Saudi Electronic University academic writing standards and APA style guidelines. ? Use proper referencing (APA style) to reference, other styles will not be accepted. ? Support your submission with course material concepts, principles, and theories from the textbook and at least two scholarly, peer-reviewed journal articles unless the assignment calls for more. ? It is strongly encouraged that you submit all assignments into the safe assignment Originality Check prior to submitting it to your instructor for grading and review the grading rubric to understand how you will be graded for this assignment.
 

Chotukool was a worthy product specifically designed to serve the rural communities in India (Hagargi, 2011). The founders, Godrej and Boyce, came up with the innovation to counter the increasing competition from international brands. The general effort was aimed at retaining the company's market share. Product innovation is a complex process. The design phase is time-consuming and requires enormous resources. Further, the process is faced with numerous gains and challenges. Some numerous pros and cons marked the attempt to design a refrigerator for the local Indian families. Three major cons are associated with innovation. First, it targeted improved living standards for the rural people in India. The rural areas were underdeveloped and poverty was quite common. There was a need to better the lives of people living there. Therefore, the project aimed at improving the quality of life for rural households. Secondly, the project offered an alternative to preserving foods in India. Perishable foods would last for longer periods. This would improve people's eating culture as they would be enabled to cook different varieties.  Lastly, the refrigerator was cost-effective and portable. Also, it offered a low-energy cooling solution. This meant that the power costs for operating the refrigerator would be reduced and thus would last for more hours. The cons on the other hand would limit the innovation growth. First, more than 90% of families who lived in rural areas could not afford electric appliances. Therefore it would prove difficult to market. Also, electricity access was very low while the few who were connected didn't find it reliable. Secondly, the migratory nature of the locals meant that a portable refrigerator was necessary. People moved regularly in search of greener pastures. Also, the word-of-mouth marketing strategy wasn't effective. The company needed to devise other mechanisms. Lastly, building a distribution network would render the idea non-viable because of the associated cost of building such a network (Hollensen, 2012).

Chotokuul was designed as a small and portable refrigerator that relied heavily on a thermoelectric cooling system (Jain, 2010). The power mechanism relied on low voltage and promised longer service. The company would later change the distribution system for innovation. Sunderraram, the project administrator proposed the use of a post office to distribute the valuable commodity. There were evenly distributed post offices in Indies' rural areas. Further, the compressor technology was overhauled. It was changed into thermoelectric cooling. Customization was also done to appeal to customers in varied customer segments. This was done to dismiss stigma syndromes that would be drawn on the basis that the innovation was an alternative to the traditional refrigerator. The marketing strategy for the rural community would entail word of mouth as the natives didn't have technological access like the urbanites. The urban market was not left behind either. There was targeted marketing to this population segment (Hagargi, 2011). The innovation was radical. The target market was new and there had never been such an innovation that targeted such a group. It aimed at improving the livelihood of village people since it could transform their eating habits.  Therefore, the process was new and was not built from an existing process. Further, the innovation was architectural. This was because the design of Chotokuul was completely different from the traditional refrigerator. Further, as the architecture of the conventional refrigerator was transforming, the innovation efforts of the company can be described as architectural. Also, as the cooling system was being changed, it might have appeared like the whole component was changing but technically it was only the system that was transforming. The innovation can be described as competence enhancing. Godrej has been one of the best producers of electronics over the years. The company has a series of items ranging from refrigerators, air conditioners, and other appliances. Therefore, Chotokuul can be identified as an improved version of the company's innovation efforts (Datta, 2011).

The innovation of Chotukool made Godrej posed a threat of disrupting the traditional refrigerator market. The logic behind it was its possibility of gaining a market in India's urban area. Additionally, the refrigerator would serve some new markets which the conventional refrigerator was not serving. The product served hotels, stalls, and flower shops among others. In a nutshell, the Chotukool allowed existing businesses to diversify their portfolio. This would be made possible by offering high-value products which could result in profit maximization. Chotokuul would keep existing products fresh for longer periods. Further, Godrej came up with an innovation which when implemented in conventional refrigerators would significantly lower power consumption. Many companies would adopt this technology at later stages. Currently, the thermoelectric cooling system is most preferred since the absence of cooling components makes it more reliable and less costly. Further, it requires limited maintenance and hence an increased system life cycle (Hollensen, 2011). The counterargument would be that Chotukool did not pose any threat to the traditional refrigerator. The optics details the main logic behind the development of the product. It targeted a specific market segment. The target was the rural families of India. They could not afford electric appliances since they were way expensive. The ideas therefore aimed at providing a cheaper alternative. Further, the families did not have reliable electricity connections and thus didn't have refrigeration means. This problem meant a limitation on the kinds of food to eat and those for preparation. The project by Godrej offered a solution to this category by offering a cheaper refrigeration solution. The benefits were mutual. The company would benefit from the proceeds of targeting a wider market. The natives on the other hand would realize improvement in their living standards. Moreover, the company would later win several awards for the innovation. However, the management noticed that the target market didn't embrace the technology fully. Several rural households still found it difficult to raise $ 50 (Hagargi, 2011).

There are several aspects that Godrej Company should have done differently to penetrate the Indian market. Penetration is fundamental in the realization of business continuity and longevity. Customer creation is likened to ushering in a new life for the business (Hague, 2004). The journey is usually full of hurdles but is quite significant for any business that wishes to grow. Therefore, the management of Godrej should have conducted comprehensive market research. Market research entails efforts geared towards determining the viability of a product or service. This is usually done directly with potential customers. However, a more fulfilling strategy would be to undertake a human-centered design. This is a solution-based approach to problem-solving that encompasses framing the problem in a customer-centric way (Cooley, 1999). It's imperative to note that Godrej leveraged the general assumption about what people in India's rural areas face. The management didn't bother to ask the natives their exact problem. They only envisioned a change in people's lifestyle but didn't realize that people had adjusted their way of living. The families had modified their eating habits and therefore the needs changed. Further, the low-income families did not need the services of a refrigerator even with the reduced pricing. To them, the price was still unattainable (Hague, 2004). The marketing strategy of Chotukool was generic and didn't capture the impression of target marketing. Therefore, the company should have broken down the Indian rural into segments. The rollout plan that targeted entire rural India didn't capture the aspirations of each district's needs. Instead, doing a district at a time would be cheaper and would create a good hypothesis. Further, Godrej shouldn't have replicated the urban marketing strategy to the rural area. Most entities ignore the premise that specific areas require tailored strategies. Each area works best when specific pitching, distribution, and advertising are utilized.  Also, the company should have utilized celebrities to do village marketing. Public figures are quite appealing to rural groups (Pehrsson, 2009).

The lessons Chotukool learned were fundamental and can apply to all product categories that are being innovated. Technologies utilized can be great but if it cannot serve a specific market segment then the innovation can turn out to be redundant. The business environment is becoming dynamic each day. Customers are becoming more informed about the kind of services or products they require. Further, the customer experience is undergoing a revolution. Customers are no longer just interested in acquiring a product or service but are also interested in how the corporate treats them. Therefore, companies are responsible for protecting their business ideas while at the same time developing rewarding market research. Innovation is aimed at meeting a specific customer need. The closer the relationship, therefore, means an elongated product cycle and business success realization. Carving out a specific market segment gives the innovation a lease of life. The relationship between market research and innovation is akin to that of risk and reward. The risk is usually associated with customers finding out the innovation before the actual timing. Further, the risk could entail the fear about the customer perception of the product idea once it's out there. However, the reward entails tailoring the innovation to suit customer interest (Rogers, 1995). Studies reveal that close to 80% of innovations end up failing. The reason behind business failure is the poorly done market research. Ford Edsel was expected to be the next game-changer in the car industry but ended up as a failed project. Ford had raised its marketing campaigns framework to paint the car as cost-effective and assured great performance. The research done was good but didn't target a specific segment. Eventually, Americans opted to buy other cars because the preference was that of small and economic models. Kodak focused its production capacity on current products but failed to realize the change that the world was getting into. The people were more focused on having great photos and not films for their cameras. The company would later suffer huge losses. In addition, there are other innovations that either failed or ended up serving a different purpose. Some of them are Coca-Cola, Dove, Crystal Pepsi, and others (Lester, 2004).

Outline

1. Pros and Cons of Developing a Refrigerator for India’s Rural Poor
2. Chotukool product and Process Innovation
3. Chotukool Impact on Traditional Refrigerator
4. What Godrej Should Have Done Differently to Penetrate Rural India
5. Lessons From The Chitukool Innovation