MKT 425 Exam 2
collaborative mass customization
a customized product determined through a dialogue with customers ex: Nike design your own sneakers...or choose colors an fabrics of a bag that you're ordering
Design Thinking
a problem solving approach that focuses on real world interaction and experimentation to create an intersection of: - something customers want - something that you can create (feasibility) - something that is likely to be profitable ___ is a human-centered innovation process ____ = creative thinking + critical thinking
cosmetic mass customization
a standard product presented differently to different users ex: M&Ms design your own M&Ms...Bud Light Sports Teams cans
adaptive mass customization
a standard product that users alter themselves ex: AdiColor from Adidas...color your own shoes kit ex: iPhone
Test marketing
an experiential procedure that provides an opportunity to test a new product or a new marketing plan under realistic market conditions what is being tested? - Product positioning strategy - Advertising strategy and tactics - Consumer knowledge - Product distribution strategy - Product pricing - Branding and product packaging - Budget levels
define the problem (step 2 of design thinking process)
analyze and synthesize observations to create a human-centered problem statement, based on customer fieldwork research
Problem Statement
answers what is/are the problems you are solving with our innovation - is actually a paragraph and uses complete sentences - includes context, needs, and constraints - is an iterative process (diverge, converge, etc.) includes: - context - needs - constraints
how to produce a perceptual map
based on customer research: - identify key attributes - compress attributes into two or three, total - list attributes on the axes
prototype (step 4 of design thinking process)
solutions should be implemented into a ________ one-by-one and then accepted, improved upon, or rejected this process will alert you to constraints, problems, and provide insight into how your consumers will think about your product
alpha testing
testing product within the company
beta testing
testing the product with outside customers - how much customers use the product - how much value the product is to the customers' operation is a cue to subsequent pricing - purchase intentions and other reactions after the test
disadvantages to using perceptual maps
(1) Just because there is a "gap" doesn't mean there is demand/opportunity (2) Provide limited factors for success (3) Reliability of the market research is uncertain
four faces of mass customization
(1) collaborative (2) adaptive (3) cosmetic (4) transparent CACT
Diverge-converge theory
(1) diverge to create choices (2) converge to make choices (3) repeat design is an iterative process
3 myths of an innovators mindset
(1) great innovators start with a clear vision --- truth: innovators start...period! ---ex: Amazon (book buying --> customer-connected company) ---ex: Apple (make best computer --> make best technology) (2) innovators are natural leaders --- truth: innovators constantly innovate on ideas and themselves (3) innovators are fearless --- truth: innovators learn how to manage their fear
advantages to using perceptual maps
(1) helps spot gaps in the market (2) useful to identify competitive positioning
design thinking includes...
(1) inspiration (2) ideation (3) implementation
5 Stages of Adoption Decision
(1) knowledge (2) persuasion (3) decision (4) implementation (5) confirmation KPDIC
limitations of the Bass Model
(1) success bias in the forecasts (2) independence of other innovations (3) static market potential (4) static geographic barriers (5) limitless supply (6) individual decision process neglected (7) no repeat or replacement sales (8) simple "not adopt to adopt" framework SISSLINS
Joe Anderson's Three Questions as to whether to invest
(1) what differentiates you from your competitors? What is the competition? (2) what are the products/services the company provides? If and what are the customers' problems that the product intends to solve and meet? (3) How good is an organization? Bad system/process v. good people...bad system always wins
laggards
- Last to adopt an innovation - Do not like change
late majority
- More skeptical about product adoption - Risk averse
snake plots perceptual map
- _______ perceptual mapping tells us where there are potential "Gaps" in the market and who is competing with whom - a simple form of perceptual mapping that asks customer to rate each company on a set of attributes on a Semantic Differential Scale - suppose we want to understand customers' perceptions of airlines - ex: 5 airlines, w/ 4 attributes on a scale of 1-9
Pros of Test Marketing
- build buzz - application of richer feedback - refine marketing strategy before product launch - prevents future costly mistakes
concept screening, evaluation, and selection
- diverge converge theory - lay out your ideas (all ideas to answer problem statement) - concept screening - concept evaluation design is an iterative process
concept evaluation
- narrowing your ideas identify the best idea in each category you've defined HOW: creativity scales, PUGH method, etc.
concept screening
- organize your ideas - group ideas according to some organizing tool potential organizing principles: feasibility, cost, stakeholder, impact
design thinking tools
- prototyping - customer co-creation - journey mapping - value chain analysis - mind mapping - rapid concept development - assumption testing - learning launches - storytelling - visualization
Cons of Test Marketing
- risk of information leak - high cost of time and money - possibility of inconclusive results - presence of falsities
Big Enemies of effective innovation
- unfocused object - resources - culture - time
product management
A career that involves monitoring and developing one or more existing products. requires: - vision and leadership - product roadmaps - execution and product management - strategy: business model, market research, data science - portfolio and product lifecycle management
Testing method
How to implement market testing: - Focus groups - Interviews - Consumer surveys - Market testing - Trade show exhibits - Social media
PUGH method
Links concept selection to design requirements - give design requirements a weight of 1-10 - score each idea on a scale of 1-10 for each design requirment - multiple across to get weighted score...add weighted scores together - compare ideas (highest score = best)
empathize (step 1 of design thinking process)
____ allows designers to set aside assumptions about the world in order to deeper insights into real users and needs - the goal is to understand experiences, motivations, and deeper issues
what are prototypes used for?
_______ are used for: - making design decisions - increasing flexibility and efficiency - reducing misinterpretation and risk - encouraging play and iteration - user testing
transparent mass customization
based on customers' past reviews - no direct customer input provide individual customers with unique goods or services without letting them know explicitly that those products and services have been customized for them ex: Amazon's recommendations - "customers who bought this item also bought..."
repositioning
changing the identity of a product or a company in the minds of stakeholders and competitiors
early majority
customers who are: Analytical, support evolution, consult others, manage risk, motivated by current problems, pursue what is probable, "look with their eyes open"
Bass Model Equation
dF(t)/dt = (p+qF(t))(1-F(t)) p = external influence, population who spontaneously change to 1 q = internal influence, population who imitate others to change to 1 (proportional to those who are already 1) (1-F(t)) = population of those who have not yet adopted (0)
Bass Model
describes the process of how new products get adopted in a population model presents a rationale of how current adopters and potential adopters of a new product interact (innovators v. imitators) the speed of adoption by your target population depends on how the population you are hitting values innovation as well as how they value imitation Benchmark model with no social structure - contains 2 actions/states/behaviors: 0 or 1 - 0 = you do not adopt the action - 1 = you do adopt the action 2 variables - p = external influence (like advertising, quality, speed)...coefficient of innovation - q = internal influence (like word of mouth, placement in the work flow) 2 customer types: - innovators - immitators
5 stages of design thinking process
empathize, define, ideate, prototype, test - non-linear, iterative process EDIPT
innovators
first customers to try a new product risk takers, excited by the possibilities of new ideas like to purchase the product first and base their decision on advertising, product reviews, etc.
Reasons why new products fail (4 Fs)
form, fit, function, feasibility - somewhere within these concepts, innovators _______ - no basic need for product - overall product does not meet a need - idea not properly communicated
positioning concepts/bases
functional positions - solve a problem symbolic positions - deal with self-image enhancement and social meaningfulness experiential positions: - provide sensory or cognitive stimulation
creating positioning maps and other uses
main step in creating _______: - define the market - choose price and determine the primary benefit - plot positions and draw the expected price line other uses of _____: - locate unoccupied or less competitive spaces - predict strategic intent of rivals and find ways of preempting them
positioning map
map that shows the relationship between the primary benefit that a product provides to customers and the prices of all the products in a given market
Rogers Innovation Adoption curve/ product adoption curve / the adoption lifecycle
model that classifies adoptors of product innovations into various categories, based on the idea that certain individuals are more open to adoption than others - Useful to remember that trying to quickly and massively convince the mass of a new idea is useless; makes more sense to start convincing innovators and early adopters first IEELL innovators --> early adopters --> early majority --> late majority --> laggards • innovators - 2.5% • early adopters - 13.5% • early majority - 34% • late majority - 34% • lagards - 16%
early adopters
most influential customers customers who are: intuitive, support revolution, follow own rules, take risks, motivated by possible opportunities, explore what's possible, "look with their eyes shut" summary: most influential people, support revolution, follow own rules, take risks, motivated by possible opportunities
inspiration (part of design thinking)
part 1 of the design thinking: - understand (empathy) - observe (become an anthropologist) - point-of-view
ideation (part of design thinking)
part 2 of the design thinking: - think outside the box (ideate as many ideas as possible) - prototype - test
implementation (part of design thinking)
part 3 of the design thinking: - storytelling - pilot - business model
S-shape adoption
part of Rogers Innovation Adoption - diffusion over time - initial adopters - increase in speed - eventual slowdown (saturation/plateau)
product management internal
product management that includes: design, usability, engineering, manufacturing, sales and sales support, market communication, legal, training DUEMSMLT
product management external
product management that includes: supply network, business partners, customers, distribution network, industry regulation SBCDNI
imitators
purchase the product depending upon their interactions with those who have previous adopted the product (the innovators)
product concept validation questions
questions that answer - What problem does your product solve? - How do customers currently solve this problem? - Can you think of another product that does something similar? - How have previous/other solutions failed, if any? - Do the customers understand what this product does? - How do the customers feel about the product? - What are the potential competitors? - Do the customers actually have a need for this product? - What scenarios can the customers picture themselves using it in? - How and where do they likely have access to the product? - How much are they willing to pay?
pricing questions
questions that answer: - What is the likelihood you would by this product at a price of $X? - At what price would you definitely buy this product? - How much would you be willing to pay for this product? - At which price difference would you replace the product with something else?
needs (of the problem statement)
section of the problem statement that answers: - what are the challenges or opportunities? - what are required?
constraints (of the problem statement)
section of the problem statement that answers: - what constraints the solutions? - what criteria should be used to evaluate ideas?
context (of the problem statement)
section of the problem statement that answers: - what history does the problem have? - for whom is a solution needed? - for what purpose do they need a solution?
ideate (step 3 of design thinking process)
select ideation techniques to stimulate free thinking and expand your problem space - thinking outside the box about your problem statement
When to Use the Bass Model
the KEY is to know WHEN to incorporate a model that will always be imperfect - applicable for durable goods purchased - use for new product forecasting and tech forecasting - not applicable for all situations (like re-purchasing...better for forecasting first trial) - we don't use this model until we know our competitive positioning (must know our buyers and WHERE our product stands with them) - when degree of innovation and degree of imitation among adopters are very relevant to your product and strategy you can use - helps you map differential of people who have adopted and people who have not (this can potentially help you gauge what stage of adoption you're in)
implementation
the individual employs the innovation to a varying degree depending on the situation - during this stage, the individual also determines the usefulness of the innovation and may search for further information about it
confirmation
the individual finalizes his/her decision to continue using the innovation this stage is both intrapersonal (may cause cognitive dissonance) and interpersonal (confirmation that the group has made the right decision)
knowledge
the individual is first exposed to an innovation, but lacks information about the innovation during this stage, the individual has not yet been inspired to find out more about the innovation
persuasion
the individual is interested in the innovation and actively seeks related information/ details
decision
the individual takes the concept of the change and weights the advantages/disadvantages of using the innovation and decides whether to adopt or reject the innovation - due to individualistic nature of this stage, Rogers notes that it is the most difficult stage on which to acquire empirical evidence
The Core Benefit Proposition (CBP)
the thing a consumer would perceive as the benefit in purchasing a new product compared to that in buying a competitor's product
technologies market testing
there are two kinds: (1) alpha testing (2) beta testing
high-fidelity prototypes (hi-fi prototypes)
type of _____ that answers the questions: - Does the prototype do what its supposed to do? - Do customers think the product's design matches its purpose? - What's the first thing customers want to do with this product and can they do that? - When they explore the product, do they become confused/excited/bored at any point? - Does anything distract of get in the customers' way when they're using the product? - Are there any features they completely ignore? - Do they feel like this product was designed for them? - What, if anything, would make them want to use this product more/less frequently? - How likely/unlikely would they recommend the product to a friend? - How would they describe this product using their own words?
low-fidelity prototype (lo-fi prototype)
type of _____ that: - co-create with customers - presents or tests basic features of concepts - is created early in the innovations process - is not fully functional answers the questions: - How would they expect it to look? (size, shape, color, texture, look, etc.) - Do they know exactly what it does? - How do customers feel when using it? - What features are missing or unnecessary? - If customers had a magic wand, what would they change about it? - How likely or unlikely would they be to use this product once it's finished? Why?
morphological analysis
type of evaluation technique for prototypes step 1: identify all parameters (functions and attributes - doesn't spill, easy to hold, etc.) step 2: make each parameter a row in a matrix step 3: identify all possible means to implement each parameter and list in columns (spill: better cap, straw, etc...holding: handle, clasp, etc.) step 4: create solutions by combining different means
test (step 5 of design thinking process)
using the best features from the last stage, the product is tested to redefine the problems and inform the understanding of the user
perceptual mapping
visual representations of brands in the market place based on how consumers perceive them in terms of the key attributes graphic display explaining the perceptions of customers with relation to product characteristics ______s illustrate a company's product, product line, or brand relative to their competition 2 types: (1) perceptual mapping of competing products (2) perceptual mapping of consumers' ideals
prototypes
what: - Easily modified and extensible model, representation, simulation or demonstration of a product, likely including its components, interface, input/output functionality - creation of vision or 3-D manifestations of concepts - representations of design ideas, regardless of the medium - use to solicit feedback..."I like," " I wish," "What if..."
