If you are offered a fizzy drink in a glass, what are the chances of easily finding out if it is Coca Cola or Pepsi? Will you care at all? Well, stick to that thought while we first talk about a few types of innovation.

People have been talking about 4P of innovation for a long time. Although these lenses have served well in the past, they are now obsolete. With the level of chaos happening around the world, I would say they are ripe for an update. But before we discuss the update, let’s summarize what these 4Ps are.

Product or service

The first P in the 4P list is your product or service; the thing you offer to your customers. So when someone tells you to innovate your product or service, they want you to create and introduce a new product or service to their customers. Sometimes it doesn’t have to be something completely new, as an improved version of previous products or services meets the requirements. The caveat, of course, is that there must be some improvement in quality or overall performance. There must be some material change.

This type of innovation is driven mainly by technological advances, outdated product design, changes in customer requirements, competition, etc. What is special about this type of innovation is that they are clearly visible to customers. Mostly because they are direct recipients of this.


The second P in 4Ps is the process. It’s all about how you create and deliver your product or service. This may include changes in the equipment and technology used in the manufacture of the product. In addition, there may be improvements in the tools, techniques, and solutions used to support the creation and delivery of the product or service. It also includes processes you use to maintain your goods, accounting methods, customer service, etc.

This change may not always be visible to customers and sometimes they may not even realize it. But from a business perspective, process innovation often has the ultimate impact.


The third P is for product positioning in the market. It’s about who you offer your product or service to. It’s about the story you tell about your product or brand. This helps to create a unique position in the minds of customers and the market.

Most of the time, positioning innovations are specific to geography or demography. Customers do not easily recognize this innovation, as it may not happen directly. However, if existing customers are part of the same geography or demographics where you reposition your product or service, they can easily recognize it. The results usually affect the top line of the business, expanding the market, and hence the sales base.


The latest in 4Ps is the innovation paradigm. It’s quite complicated compared to the other three. And that’s because this innovation has to do with the mental model of business, that is, how your business thinks about why you do what you do and for whom. You can also call it a high-level business model.

It’s the hardest thing to deal with because it expresses your understanding, which you want your customers to appreciate. However, many companies use it during their efforts to revive the brand.

quoteNow back to my main argument about the significant update of this 4P based thinking. A lot has changed in the last few years, especially in the last two years. And as change permeates various aspects of society, it will affect businesses and the way they approach innovation in their business.

We often insist on data to make informed decisions. But this is an economy of data abundance. Everyone has enough data to prove their point.

This is not about right or wrong data. Every piece of information has a point of view. This puts any business in a strange decision. It forces us to look beyond data, which can be more powerful and useful.

How can it be done? Let me show you an example to prove my point.

At the beginning of this article I asked you to think about carbonated drinks and your choice. People have been clearly divided between Coca Cola and Pepsi for the past few years. They still are. Both brands have successfully tried their hand at all 4P of innovation. But now, if you combine their 4P with the available data and look at the bigger picture through a different lens, it will significantly change your point of view.

Let me share some data. And that data comes from a Harvard study. It’s called Weighted Accounts Initiatives (IWAI). Using sample data and findings from this study, here is how these two brands are arranged.

Coca Cola’s net revenue in 2018 is approximately $ 31.8 billion. But to generate that revenue, its total environmental impact was about $ 3.7 billion. We are talking about many things, such as plastic waste produced, drinking water consumed, wasted drinking water, etc. And that means that if they pay for all the environmental costs, according to Harvard, their real profit will be about -11.6% loss!

How about Pepsi? Pepsi’s net revenue in 2018 is about $ 64.7 billion, about twice as much. Pepsi’s environmental impact was about $ 1.8 billion to generate that revenue. And that means that if Pepsi pays for all the environmental costs, their profits will fall to about -3%, as well as a loss. And remember that here we are talking about a comparison with liking and liking.

The bottom line is that Coca Cola is four times dirtier than Pepsi. Does this change your preferences? What do you think about that now? Do you see the point in preferring one over the other?

I don’t see why I should choose one over the other. For me, both do not live up to my personal promise of a brand. Both are not in line with what I represent as a person. And it’s not just about these two brands of fizzy drinks, but about everyone else. They all affect the ecosystem in a similar way, some more, some less.

So product, process, paradigm or positioning innovation is not useful. This is the new world. 4P innovations have served well in the past. But now they alone are not enough. We need to update our perspective and think beyond the 4 points of innovation.

What do you think?

Anand Tamboli is a serial entrepreneur, speaker, award-winning author and leader in emerging technologies

Beyond The 4Ps Of Innovation

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