456 EXAM

Ideate

"form an idea of - imagine or concieve" - Share ideas - All ideas worthy - Diverge/converge - "Yes and" thinking Prioritize

Abductive logic

"observing curious or surprising data that fails to accord with preconceived patterns, norms, rules, or laws"

Cognitive Access Gap

- "Consumers ability to describe what they want is limited by their imaginations and by lack of cognitive access to the motivations driving their purchases - The new products they (consumers) envision barrow heavily from those in the marketplace...consumers anchor too heavily on what is to be able to imagine what could be" - Zaltman Metaphor Elicitation Technique (ZMET) - studies unconscious motivations

Knowing that vs knowing why GAP

- "It's really hard to design products by focus groups. Many times people don't know what they want until you show it to them" (Steve Jobs) - "Knowing that consumers prefer a container that has a round shape rather than a square shape is important, because it may suggest a desirable configuration that is neither round nor square"

Inspiration

- Choose a design -challenge -plan research methods -build interview guide -additional research methods -capture learnings

Ways to go Extreme

- Conduct an unfocus group -shadow outliers -utilize empathy tools -conduct a netnography of lovers or haters -go extreme yourself

Where do opportunities come from?

- Follow a personal passion - Compile bug lists → list every annoyance or frustration, think/dream about its solution - Pull opportunities from capabilities → firm's unique resources: capabilities, core competencies and competitive advantages - Study customers -Consider implications of trends (context) → changes in technology, demography or social norms often create innovation opportunities (green products and solutions) -Imitate, but be better - Drive an innovation "down market" - Mine your sources: --Lead users --Representation in social networks --Universities --Online idea submission -Important geographically isolated innovations

IDEO's Human-Centered Design Process Steps

- Inspiration -Ideation -Implementation

Empathize

- Interviews - Shadowing - Seek to understand - Non-judgemental

Characteristics of Disruptive Innovation

- Low-cost and highly accessible or new market - Lower gross margins than their contemporaries or the incumbent - Serve a smaller, low-end target market at first, before expanding to a vast market due to their accessibility - Hard to see coming and aren't taken seriously - Quietly, slowly climbing the ladder and can take years or decades to gain traction before they dramatically upend competitors

Prototype

- Mockups - Storyboards - Keep it simple - Fall fast - Iterate quickly

Conjoint is used for?

- New product design - Adding product features/improvements - Aiding in pricing decisions - Gauging Market reaction to: --Different brands, i.e, expected market shares given what they offer

Define

- Personas - Role objectives - Decisions - Challenges - Pain points

Categories of Extreme Consumers

- The fringe → individuals who are on the periphery or edges of a target market. They may have some interest in a particular product or service but are not fully engaged or committed customers. These consumers may occasionally make purchases from the brand or industry in question but are not loyal or regular customers. Fringe consumers might represent a potential growth opportunity for businesses if they can be converted into more active and engaged customers. - Product category virgins → novices can drive novel ideas - Customers with constraints → constraints force creativity - Lovers/haters/opt-outers → "Lovers" are consumers who have a strong and positive attachment to a particular brand, product, or service "Haters" are consumers who hold strong negative feelings or dissatisfaction toward a brand, product, or service "Opt-outers" are consumers who choose to disengage or not participate in a particular market or category altogether.

Test

- Understand - impediments - What works? - Role play - Iterate quickly

Conduct an Unfocus Group

- brainstorming to encourage rich, creative, and divergent contributions from all participants: encourage wild ideas, defer judgement to avoid interrupting the flow of ideas build on the ideas of others, hold one conversation at a time, go for quantity

Ideation

- generate ideas -select promising ideas -determine what to prototype -make prototype -test and get feedback -integrate feedback and iterate

Shadow Outliers

- observe how the consumption activity is embedded in the everyday lives and activities of your participants - note in detail all tasks, actions,objects, participants and interactions involved in the process -ask participants to describe their thoughts aloud during their activities

Conduct a Netnography of Lovers or Haters

- sample a diversity of online communities (3-6), sample enough conversations (100+) and include the voices of a diverse group of posters (50+) within each community -document the traditions and rituals in which consumers engage to uncover the deeper meaning that the product has for them -note the specific language and stories that consumers use to express their views - both positive and negative

Go Extreme Yourself

- take notes on the effects of your extreme usage on your physical and emotional state -note the ways in which being extreme changed your attitudes and feelings toward the product or service - for better and for worse

Implementation

- understand target -create an action plan -launch solution - keep getting feedback and iterating -scale towards impact

Interpreting Conjoint Analysis

-Intercept = total value for the baseline option -part-worth plots -we can predict choice

Utilize Empathy Tools

-keep a diary of the physical, social, and emotional experiences you have while using your empathy tools -write down all of the constraints, roadblocks, and problems you encounter - and use these to prompt brainstorming possible solutions

Opportunity Identification Process Steps

1) Establish a charter → articulates goals and establishes boundary conditions Ex: create a physical product in the cat category that can launch to the market within about a year through our existing retail channels Ex: create a low cost watercress toilet for developing countries 2) Generate and sense MANY opportunities 3) screen opportunities 4) develop promising opportunities 5) select exceptional opportunities 6) reflect on the results and process

Concept Screening (6 Steps)

1) Prepare the selection matrix 2) Rate the concepts 3) Rank the concepts 4) Combine and improve the concepts 5) Select one or more concepts 6) Reflect on the results and the process

Design Thinking Process Steps

1. Empathize 2. Define 3. Ideate 4. Prototype 5.Test

Adjacent opportunities

Adjacent opportunities involve expanding into related or closely connected markets, products, or services that complement the company's core business, offering growth potential through diversification.

Why Conjoint Analysis

Asking direct questions about preferences often leads to unenlightening answers - Consumers want everything - and they want it for free Conjoint analysis is a widely used statistical technique for new product development that uses data pertaining to consumers overall preference for a select number of product bundles and decomposes them into utility values (part-worths) that the customer assigns to each level of each attribute - Basically, its statistical technique that helps us determine how people value different product attributes

How to Obtain Parameters? Market Size

Can estimate if early sales data available Often estimated independent of model -Demographic data, analyst forecasts, market research surveys - Managerial judgment Easier for some categories than others - Market for a particular drug? - Market for covid medications? - Smart watches?

Components of Beta Tests

Common for software, services, individual products Beta tests: with "key" customers Goal is to uncover bugs or usability issues before launch "Real world" test, after the laboratory test - Open beta tests - anyone is able to use the product and is usually presented with some messaging that the product is in beta and given a method for submitting feedback - Closed tests - the testing is limited to a specific set of testers, who may be composed of current customers, early adopters and/or paid beta testers

Conjoint Analysis

Consumers have to make tradeoffs

Core opportunites

Core opportunities refer to areas where a company focuses on its existing products, services, or markets, aiming to improve and expand within its current business model.

Bass Model

Developed by Frank Bass in 1969 Tries to predict how many customers will eventually adopt the new product and when? The underlying assumption is that adoption by potential customers is triggered by 2 types of behavior: innovation and imitation -Innovation is driven via influences such as advertising that are not dependent on the decisions of others in the social system - Imitation is the influence of prior adoptions through positive word of mouth The model further assumes: Maximum number of potential adopters or buyers is fixed All potential adopters eventually purchase Repeat purchases are not accounted for 0-1 model

Importance of Attributes

For each attribute: - Range of an attribute = max partworth - min partworth - Importance of an attribute = range / (sum of ranges across all attributes)

High Fidelity Prototypes

High-fidelity prototypes are prototypes that look and operate closer to the finished product A 3D plastic model with movable parts (allowing users to manipulate and interact with a device in the same manner as the final design) Digital prototypes (using Sketch or apps like Marvelapp) Native prototypes

Innovation Process

I) Empathize Develop a deep understanding of the challenge II) Define Clearly articulate the problem you want to solve III) Ideate Brainstorm potential solutions Select and develop your solution IV) Prototype Design a prototype (or series of prototypes) to test all or part of your solution V) Test Engage in a continuous short-cycle innovation process to continually improve your design

Internal Tests

Lab tests, employe tests, alpha tests

Beta Test Coefficients

Market size = m coefficient of innovation = p - Rate that the innovator will adopt over time Coefficient of imitation = q - The effect of word of mouth/social contagion

Lab Tests, Employee Tests, Alpa tests

Measure performance Often, "technical" measures Try to "mimic" consumer use But not the same as consumer use Alpha tests --> the initial phase of testing a software, product, or service in-house, typically before it is made available to external users or customers. During alpha testing, the company's own developers or testers rigorously assess the product for functionality, usability, and any potential issues or defects. It is a crucial step in the quality assurance process to identify and address issues before a wider beta testing or public release occurs

Plot Opportunities on Dimensions of Risk

Need to understand market uncertainty - Ex: knowledge of need, X-axis Need to understand product uncertainty - Ex: knowledge of solution, Y-axis Need to understand value of the opportunity

Conjoint Works for...

Product or service that can be decomposed into attributes

1) Prepare the selection matrix

Reference concept → is chosen against which all other concepts are rated - Reference can be an industry standard, a commercially available product, a best-in-class benchmark product, or an earlier generation of the product, or one of the concepts under consideration -Rating: "better than (+), same as (0), or worse than (-) → placed in each cell of matrix to represent how each concept rates in comparison to the reference concept relative to the particular criterion

Factors Impacting Diffusion

Relative advantage: better than what it replaces Compatibility: closely matches needs, values, lifestyle Complexity: easy to understand, use Trialability: easy to try out Observability: easy to see its benefits "diffusion" refers to the process by which a new product, innovation, or idea spreads and is adopted by a wider audience or market.

How does Conjoint Analysis work?

Show consumers a series of hypothetical products defined by their attributes - In conjoint a product is considered a "bundle" of attributes Ask the consumers to evaluate the alternatives (rate/rank options or choose) in the marketplace by examining how much they offer on the various attributes and how critical each attribute is to them Repeat 20-30 times depending on size of study It assumes that every product offering forms its appeal as the sum of the benefits it offers - Total value of product = sum of sub-values (partworths) of its attribute levels to the individual A consumer prefers the product that delivers the greatest total value to them (max utility) Use responses to overall evaluation of bundles to estimate attribute level utilities (partworths) - Decompose the product into the value of each sub-part

CBP (core benefit proposition) should have a resonating focus

Simple Concise Customers' perspective Highlights couple key differences Clarity → its easy to understand (simple/concise) It can be read and understood in about 5 seconds It communicates the benefits a customer will get from purchasing and using your products and/or services It says how its different or better than the competitor's offer It highlights a couple of key differences It avoids hype (like never seen before or amazing miracle product), superlatives (best) and business jargon (value-added interactions)

Low Fidelity Prototypes

Storyboarding Sketching Paper prototyping among others

Core benefit proposition

Tells about what a consumer would perceive as the benefit in purchasing a new product compared to that in buying a competitor's product - Duracell = durability - Volvo = safety - Colgate optic= sparkling white teeth

Transformational opportunities

Transformational opportunities entail making significant changes to the company's business model, strategy, or industry focus, often involving entry into entirely new markets or adoption of disruptive technologies.

Rate the concepts

Uses weighted selection criteria and a finer rating scale - May be skipped if concept screening produces a dominant concept If screening produces a dominant winner, concept scoring can be skipped

Beta Tests

an opportunity for real users to use a product in a production environment, with the goal of uncovering any bugs or issues so they can be addressed for before a general release

External tests

beta tests, simulated test markets, test markets External = with customers, the final judge Complementary to internal tests Typically used under conditions close to actual use For physical as well as psychological and social benefits

Solution

concepts that increase the stability of heels

Convergent Thinking

focuses on finding the single, correct solution to any problem by following defined, logical steps. With convergent thinking, answers are either right or wrong, with zero ambiguity

Deductive Logic

general > specific a method of reasoning that starts from general statements or premises and uses them to reach specific, logically certain conclusions

Concept screening/scoring process

help the team refine and improve the concepts, leading to one or more promising concepts upon which further testing and development activities will be focused

Innovators

individuals who want to create new ideas and new ways of doing things. Innovator will attempt to improve on a product that may already be in the market - Ex: every iteration of the iPhone is considered to be an innovation over the previous iPhone model - Innovation is a discipline capable of being learned and practiced - Innovation as a process Above all, innovation, is not invention

Risk Matrix To balance an innovation portfolio:

need to assess where different projects fall on the spectrum of risk matrix predicts the probability of success or failure of the project

Problem

pointed heels sink into the ground and scrape, person loses balance, shoes get damaged, leads to embarrassment, repairs are expensive

Divergent Thinking

process for identifying new opportunities, finding multiple creative ways to address intractable issues or abstract problems and challenging the organizational status quo.

Disruptive Innovation

process where a product or service initially takes root in simple applications at the bottom of a market - typically by being less expensive and more accessible - and then relentlessly moves upmarket, eventually displacing established competitors - An innovation transforms an existing market or sector by introducing simplicity, convenience, accessibility and affordability where complication and high cost are the status quo - Disruption is a process - Not breakthrough technologies that make good products better; rather than innovations that make products and services more accessible and affordable, thereby making them available to a much larger population

Entrepreneur

someone who focuses almost exclusively on trying to take a product and fit it into a market wherein it can sell to customers or clients - Understand how to commercialize ideas

Inventor

someone who invents a product is simply looking to create a new product that has never before been made

Industrive Thinking

specific > general method of reasoning that involves making generalizations based on specific observations or evidence. It starts with specific instances and uses them to form a broader understanding or hypothesis. Inductive thinking is often used in scientific research and everyday problem-solving to make educated guesses or predictions about patterns, trends, or general principles based on the information available