New product Management: Increasing your odds of success

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Why new products fail and what you can do about it… a big presentation 1224 slides, 24 hours of instruction ..

Why new products fail and what you can do about it… a big presentation 1224 slides, 24 hours of instruction ..

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  • 1. Bryan Cassady Guest Professor, Bryan@fast-bridge.com INTRODUCTION The sad fact is 9 out of 10 new products/services fail. This course is about why products fail and what you can do to increase your odds of success. In this PDF you will find 11 lectures from my last course and a bonus lecture on viral marketing. I hope in 1224 pages that follow you will find new ideas and inspiration… If you have a new product or service you would like help with, please feel free to contact us. We offer a 1 hour first consultation free of charge… Bryan Cassady bryan@fast-bridge.com +32-475-860-757
  • 2. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Click on layers to to the different lectures and slide titles Or simple go to the page numbers listed Eg. 6 Fist Movers vs. Fast Seconds _ 528 Starts on page 528 Click here for outline
  • 3. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 4. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Dave’s story
  • 5. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 6. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 7. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 8. Bryan Cassady Guest Professor, Bryan@fast-bridge.com "A medium-sized 'butter' popcorn at a typical neighborhood movie theater contains more artery-clogging fat than a bacon-and-eggs breakfast, a Big Mac and fries for lunch, and a steak dinner with all the trimmings — combined!"
  • 9. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Talk to someone tonight…  The kidney heist  The story  The details (probably not all)  Movie popcorn  A lot of fat  The car  The visuals  The brand  The benefit  The non-profit company  ?
  • 10. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 11. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 12. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 13. Bryan Cassady Guest Professor, Bryan@fast-bridge.com A lie can get halfway around the world before the truth can even get its boots on. Mark Twain
  • 14. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 15. Bryan Cassady Guest Professor, Bryan@fast-bridge.com To develop sticky ideas, make your message: 1 2 3 4 5 6
  • 16. S imple U nexpected C oncrete C redible E motional S tory Based
  • 17. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 25. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 27. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 32. Bryan Cassady Guest Professor, Bryan@fast-bridge.com 1 2 3 4 5 6
  • 33. 10 minutes
  • 34. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 35. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 37. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 39. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 40. Bryan Cassady Guest Professor, Bryan@fast-bridge.com It is always easier to explain after the fact
  • 41. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 42. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 43. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 44. Bryan Cassady Guest Professor, Bryan@fast-bridge.com 16 reasons products fail (Nielsen) Lecture Number 1 A less-than-optimal "configuration" of product or service attributes and benefits is selected. 1 What is a new product 2 Marketers fall in love with a product no one else loves 3 Marketers assess the marketing climate inadequately. 2 Market research 4 A failure to ask the right questions and a belief that everything is a big idea 5 A questionable pricing strategy is implemented. 3 Pricing 6 Cannibalization underestimated 4 Forecasting and business planning 7 Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world. 8 Too focused on the internal game not enough on the market 5 What really happens at work/ Selling a business case 9 Too focused on being first 6 Timing: Is there a first mover advantage 10 The Lemming effect 11 Lack of a strong sustainable position in the market 7 The basics of market interaction 12 The marketing plan for the new product or service is not well implemented in the real world. 8 Execution 13 The plan is too complicated 14 No Support to get things done 9 Selling your ideas 15 A weak positioning strategy is used. 16 The advertising campaign generates an insufficient level of new product/new service awareness. 10 Popper : Asking the 1 big question
  • 45. Bryan Cassady Guest Professor, Bryan@fast-bridge.com A group presentation 20-30 min Lecture 80-90 min Then a discussion 60 min
  • 46. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 47. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 48. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Date Lecture Who Assignment Student Presentation Present Group Reading 11/02/2010 intro B Brand You None Summary: Made to Stick 18/02/2010 What is a new product B Concept proposals None New product evaluation methods Concept Training 25/02/2010 Market research B 3 big research Qs/ How to answer Concept proposals 1-Jan The wisdom of crowds 04/03/2010 Pricing for Value B Pricing Reco in 1 category 3 big research Qs/ How to answer 2-Jan TBD 11/03/2010 Forecasting and business planning B A systems view of the business Pricing Reco in 1 category 3-Jan Chapter 5 Senge + Fifth discipline 18/03/2010 Building Buzz and interest B A buzz activity: contest invite or link request A systems view of the business 4-Jan The cluetrain manifesto 25/03/2010 What really happens at work/ Selling a business case E Choosing the Best ad A buzz activity: contest invite or link request 5-Jan PG 99 01/04/2010 Timing: Is there a first mover advantage E First mover or fast second your reco Choosing the Best ad 6-Jan Managing What consumers learn through experience the second mover advantage 08/04/2010 No Class(Spring Break) X no assignment X X 15/04/2010 No Class(Spring Break) X no assignment X X 22/04/2010 The basics of market interaction (strategy) E Choice of a value discipline First mover or fast second your reco 7-Jan The discipline of market leaders 29/04/2010 S-D Logic (execution) E A service Mantra proposal Choice of a value discipline 8-Jan TBD 06/05/2010 Selling your ideas E A sales letter A service Mantra proposal 9-Jan Cialdini/ The new positioning 13/05/2010 New Class or no class ? E Winner or loser A sales letter 10-Jan TBD 20/05/2010 Class wrap up j no assignment Winner / Loser 11-Jan Nothing Practice Exam Due If all goes as planned , an Oxford style debate in the last class
  • 49. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 50. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “Success is a question of how to marshal your resources. Be really great in four or five areas. Make some hard choices. “The big challenge is to worry less about your weaknesses and build more on your strengths. Every success in your life will be based on your strengths.”
  • 51. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Bryan Cassady Email: bryan@leuvenresearch.com Why did you take this course? :To teach it About you: A long time ago, an American boy came to Belgium, where he met a pretty woman in a Laundromat. They got married a year later and decided to stay in Europe. Since then, Bryan has set up 9 successful business in 7 different countries. Several of which should have never succeeded. Skills:  A born marketer and salesman with a proven track of record business start-ups and business development  A Talent for thinking outside the box and finding simple solutions to complex business issues. Driven by the challenge of new business initiatives…Proud to be able to make impossible things to happen. Now in academia, because he enjoys learning and teaching.
  • 52. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 53. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 54. Bryan Cassady Guest Professor, Bryan@fast-bridge.com S imple Unexpected C oncrete C redible E motional S tory Based
  • 55. Bryan Cassady Guest Professor, Bryan@fast-bridge.com A less-than-optimal "configuration" of product or service attributes and benefits is selected. Lack of a strong sustainable position in the market Marketers fall in love with a product no one else loves The marketing plan for the new product or service is not well implemented in the real world. Marketers assess the marketing climate inadequately. The plan is too complicated A failure to ask the right questions and a belief that everything is a big idea No Support to get things done A questionable pricing strategy is implemented. A weak positioning strategy is used. Cannibalization underestimated The advertising campaign generates an insufficient level of new product/new service awareness. Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world. Too focused on the internal game not enough on the market The Lemming effect
  • 56. Bryan Cassady Guest Professor, Bryan@fast-bridge.com A less-than-optimal "configuration" of product or service attributes and benefits is selected. Lack of a strong sustainable position in the market Marketers fall in love with a product no one else loves The marketing plan for the new product or service is not well implemented in the real world. Marketers assess the marketing climate inadequately. The plan is too complicated A failure to ask the right questions and a belief that everything is a big idea No Support to get things done A questionable pricing strategy is implemented. A weak positioning strategy is used. Cannibalization underestimated The advertising campaign generates an insufficient level of new product/new service awareness. Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world. Too focused on the internal game not enough on the market The Lemming effect
  • 57. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 58. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Marketing is the management process that identifies, anticipates and satisfies customer requirements profitably. The Chartered Institute of Marketing (CIM)
  • 59. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Sometimes you gotta shoot the puppy before he grows up
  • 60. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 61. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “There will always be need for some selling. But the aim of marketing is to make selling superfluous. The aim of marketing is to know and understand the customer so well that the product or service fits him and sells itself. Ideally, marketing should result in a customer who is ready to buy. All that should be needed is to make the product or service available.”Peter Drucker
  • 62. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 63. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Expected
  • 64. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 65. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Core Benefit Generic Product Expected Product Augmented Product Potential Product Q: Why is the iPod a success…
  • 66. Bryan Cassady Guest Professor, Bryan@fast-bridge.com What makes what you’re selling Different and desirable
  • 67. Bryan Cassady Guest Professor, Bryan@fast-bridge.com  Business analysis  Evaluation of ideas  Making things happen 3 fundamental roles  Accountable for definition, development, marketing and profits of a product  Defines the business case, gets money, responsible for ROI  Managing a business A baby CEO
  • 68. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Product Manager Customer Service R & D Logistics Advertising Top Management Sales Purchasing Marketing Research Legal Customers Finance Production
  • 69. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “Product management is one of the most common training grounds for senior executives. Many VPs and CEOs were formerly product managers. The joy (and sometimes pain) of product management is it’s horizontal nature, working with Sales, Development, Marcom, Finance, Professional Services and senior Executives. Product management is where we learn to lead through influence rather than mandate.” Barbara Nelson, Pragmatic Marketing
  • 70. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 71. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 72. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 73. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 74. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 75. Bryan Cassady Guest Professor, Bryan@fast-bridge.com You have to keep pulling
  • 76. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 77. Bryan Cassady Guest Professor, Bryan@fast-bridge.com High Low High New product lines 20% Improvements to existing products 26% Additions to existing product lines 26% New-to-world products 10% Repositioning's 7% Newnesstocompany Newness to market Size of circle denotes number of introductions relative to total
  • 78. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 79. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 80. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Apple operating system vs. Windows This South African Shiraz received 87pts from Rovani, Wine Advocate #155
  • 81. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 82. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “people look at what interests them and sometimes it’s your ad.” Howard Gossage
  • 83. Bryan Cassady Guest Professor, Bryan@fast-bridge.com 1965 1974 1981 1986 1990 1997 34% 24% 13% 12% 8% ? Percent of adult viewers who could name one or more brands advertised in a TV program they had just watched: Newspaper Ad Bureau
  • 84. Bryan Cassady Guest Professor, Bryan@fast-bridge.com ‘‘More than nine out of ten consumable products launched in the last ten years offered absolutely nothing new to the consumer. More than eight out of ten new products fail. You don’t need to be a statistician to realize there’s a correlation between the two numbers.’’ -- Robert McMath
  • 85. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 86. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 87. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Idea Generation Screening Concept Development & Testing Marketing Strategy Business Analysis Product Development Test Marketing Commercialization
  • 88. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Ideas, screening Concept, analysis Prod. devel Test mktg commercialization The time to Make mistakes ! Budget
  • 89. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “I think there’s a world market for about five computers.” (President of IBM) “TV won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” (President of 20th Century Fox)
  • 90. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “I think there’s a world market for about five computers.” (President of IBM) TV won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” (President of 20th Century Fox)
  • 91. Bryan Cassady Guest Professor, Bryan@fast-bridge.com today’s business
  • 92. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 93. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Study Test Do
  • 94. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Solution Do more But in my opinion, almost certainly wrong
  • 95. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Ready, Aim,Fire
  • 96. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Concept Development Implementation Project Start Concept Freeze Market Introduction Concept Time Response Time Total Lead Time
  • 97. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Post-It-Notes: the super glue that wouldn’t stick Levi jeans: the failed gold digger feeding his family
  • 98. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 99. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 100. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 101. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Ready, Fire, Aim
  • 102. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Failure = Normal = Good. (“Reward excellent failure. Punish mediocre success.”) “Fail faster. Succeed sooner.“ “Fail. Forward” Tom Peters
  • 103. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Concept Development Implementation Project Start Concept Freeze Market Introduction Concept Time Response Time Total Lead Time
  • 104. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Fire, Fire, Fire
  • 105. Bryan Cassady Guest Professor, Bryan@fast-bridge.com "Life is what happens while you’re busy making plans" --John Lennon
  • 106. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 107. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Exultation Disenchantment Confusion Search for the guilty Punishment for innocent Distinction for uninvolved Introduction Testing/Test MKTG Screening & Refinement Idea Generation
  • 108. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “Remember Perspective is everything.” Two shoe salesmen... find themselves in backward part of Africa. The first salesman wires back to the head office.... there is no prospect of sales.. Natives do not wear shoes. The second wires "No one wears shoes here. We can dominate the market. Send all available stock
  • 109. Plus organization in groups
  • 110. business ideas Which puppy(ies) worth saving ?
  • 111. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Group Number Pets.com Kosmo Despair.com Etoys.com Petrock.com Flooz Webvan Is there a benefit (real or percieved) People willing to pay (enough) Cost of cut-through acceptable People will see the benefit buy again / recommend to others Will someone hate it Kill Puppy (0 = kill, 1 = love) Member Views Class ID
  • 112. Pets.com Pet supplies via the internet Save big, save time Stay at home
  • 113. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 114. Kosmo.com Instant delivery of products purchased via the internet in big cities. Order a wide variety of products, from movies to snack food, and get them delivered to your door for free within an hour.
  • 115. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Despair.com We hate all the senseless, wasted time on employee motivation and un-founded optimism We imagine you do to, buy our products and show your true colors
  • 116. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Continuous effort is the key to unlocking your potential Winston Churchill
  • 117. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 118. Etoys.com The new place to buy toys. Find you want on the internet
  • 119. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 120. Petrock.com Pets take a lot of time and energy. Your kids can have almost as much fun with a pet rock. We even include a care guide
  • 121. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 122. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 123. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Webvan.com Buying groceries should be easier. With web van you can get all your groceries, so you have time for other things
  • 124. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 125. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Group Number Pets.com Kosmo Despair.com Etoys.com Petrock.com Flooz Webvan Is there a benefit (real or percieved) People willing to pay (enough) Cost of cut-through acceptable People will see the benefit buy again / recommend to others Will someone hate it Kill Puppy (0 = kill, 1 = love) Member Views Class ID
  • 126. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 127. Where do big ideas come from ?
  • 128. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 129. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Distinguishing Characteristic: Selecting between given means to achieve pre-determined goals Sometimes new means may be generated M1 M2 M3 M5 M4 Given Goals
  • 130. Bryan Cassady Guest Professor, Bryan@fast-bridge.com E2 E3 E . . . En M1 M2 M3 M4 M5 Given Means Imagined Ends E1 Distinguishing Characteristic: Imagining possible new ends using a given set of means
  • 131. Bryan Cassady Guest Professor, Bryan@fast-bridge.com  Who is coming  What will they like  Plan a menu  Go Shopping  Make the meal  Enjoy Traditional  What is in the Fridge ?  What can we do with that  Guess what is for dinner ?  Enjoy ? Effectual
  • 132. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 133. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 134. Bryan Cassady Guest Professor, Bryan@fast-bridge.com ?
  • 135. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Leverage contigencies
  • 136. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 137. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 138. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Who I am What I know Whom I Know What can I do? Interact with others Stakeholder pre- commitments New goals new means
  • 139. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 140. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Causal Logic (predict) Visionary Logic (predict) Adaptive Logic (react) Effectuation Logic (negotiate) lowhigh low high Predictability ofthefuture Controllability of the future Effectuate … … under uncertainty … in new markets … for new products
  • 141. Bryan Cassady Guest Professor, Bryan@fast-bridge.com The quickest easiest way to get started selling a product… Objective: Fast failures and maybe a big success
  • 142. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 143. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 144. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “Concepts are ideas that you think will resonate and mean something to people interested in a product or service. Good concepts are insight based.” “You need to think about what are the real benefits consumers are looking for. Concept statements should be written in a manner that stresses the strategic benefits of any given concept vs. creative writing appeal.” “While the copywriting should be neither boring nor bland, it is important to distill the idea down to its primary reason-for-being.”
  • 145. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 146. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 147. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 148. Bryan Cassady Guest Professor, Bryan@fast-bridge.com or
  • 149. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Reciprocity  On is more willing to comply with a request for participation to the extent that compliance constitutes repayment of a perceived gift favour or concession. Consistency  Once an individual has taken a freely chosen stand on an issue, he/ she will exhibit a tendency to act consistently with this commitment Social validation  Individual commonly decide on appropriate actions for themselves by searching for information as to how similar other have acted or are acting in a similar situation Authority  People are more likely to participate if a legitimate authority is asking for participation Scarcity  Requests than emphasise the value of “making your voice hear” or “having your opinion count” will be more effective when coupled with information suggesting that such an opportunity is rare.
  • 150. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 151. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 152. Bryan Cassady Guest Professor, Bryan@fast-bridge.com What you need to deliver Group Core Concept + Loans: Home or personal 1 6 Core Concept + Credit Card 2 7 Core Concept + Insurance: Life, Home, Car, Travel… 3 8 Core Concept + Telephone/ Internet or Mobile 4 9 Core Concept + Utility: Gas, Electric, Water… 5 10
  • 153. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 154. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Accepted beliefs Consumers are getting more and more frustrated with "unwanted mail“ The mail I send is not junk mail - it just needs to go to the right people There is a shortage of relevant data. Data is often out of date/not updated very regularly Benefit Select Post gives you the information you need to reach consumers that want your mail Reason to believe in the product Proven to work in other countries. Response rates 20-400% higher a program being developed with you in mind with the support of the Belgian Post brand Reassurance Developed in collaboration with leading companies, and industry leaders based on detailed consumer and advertiser testing Brand Character Always on the look out for win/win/ solutions. Always doing the right thing.... A good listener, willing to learn/open/progressive, well-informed/ever striving
  • 155. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 156. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 157. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 158. Bryan Cassady Guest Professor, Bryan@fast-bridge.com A less-than-optimal "configuration" of product or service attributes and benefits is selected. Lack of a strong sustainable position in the market Marketers fall in love with a product no one else loves The marketing plan for the new product or service is not well implemented in the real world. Marketers assess the marketing climate inadequately. The plan is too complicated A failure to ask the right questions and a belief that everything is a big idea No Support to get things done A questionable pricing strategy is implemented. A weak positioning strategy is used. Cannibalization underestimated The advertising campaign generates an insufficient level of new product/new service awareness. Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world. Too focused on the internal game not enough on the market The Lemming effect
  • 159. Bryan Cassady Guest Professor, Bryan@fast-bridge.com 1000 40 1000 30 1000 20 1000 10 5,000
  • 160. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Paradigms = models, patterns the basic way of perceiving, thinking valuing A dominant paradigm is seldom if ever stated explicitly; it exists unquestioned… transferred through culture and unspoken business practices William Harmon- An incomplete guide to the future
  • 161. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Hot summers Warm winters Evidence of global warming Cold summers Cold winters Evidence of global warming
  • 162. Bryan Cassady Guest Professor, Bryan@fast-bridge.com I will see it when I believe it vs. I will believe it when I see it Too much research is the first type
  • 163. Bryan Cassady Guest Professor, Bryan@fast-bridge.com  We often do research to check our brilliant ideas  SUGGING (Selling under the guise of market research) Issues  Objective criteria in place before the research starts  Is 35% planned purchase good or bad  Clearly define your biases before you start  Focus on insight (vs. confirmation)  Do regular reality checks Solutions
  • 164. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “The formulation of the problem is often more essential than its solution” Albert Einstein
  • 165. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Research that Produces Customer Insights Based on a lecture by M. Sawney (Northwestern University)
  • 166. Bryan Cassady Guest Professor, Bryan@fast-bridge.com A good product manager  Builds, Shares, and uses insights Chris Start P&G
  • 167. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 168. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 169. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 170. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Example “The consumer isn’t a moron. She is your wife.” David Ogilvy “We don’t sell cosmetics, we sell hope” Revlon
  • 171. Bryan Cassady Guest Professor, Bryan@fast-bridge.com today’s business
  • 172. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 173. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 174. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 175. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 176. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Offering (WHAT) Process (HOW) Presence (WHERE) Customers (WHO) 1 4 2 3 Networking Brand Supply Chain Organization Value Capture Customer Experience Platform Solution
  • 177. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Offering (WHAT) Process (HOW) Presence (WHERE) Customers (WHO) Networking Brand Supply Chain Value Capture Customer Experience Platform Solution Organization
  • 178. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Offering (WHAT) Process (HOW) Presence (WHERE) Customers (WHO) Networking Brand Supply Chain Value Capture Customer Experience Platform Solution Organization
  • 179. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Offering (WHAT) Process (HOW) Presence (WHERE) Customers (WHO) Networking Brand Supply Chain Value Capture Customer Experience Platform Solution Organization One place all The info Answers in 30 minutes
  • 180. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 181. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 182. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Using observation to formulate an idea or theory. “Qualitative” or “Interpretative” research draws on inductive reasoning. Sheba cats are part of the family Inductive Reasoning Taking a known idea or theory and applying it to a situation (often with the intention of testing whether it is true). “Quantitative” or “positivist” research draws on deductive reasoning. Sheba buyers are 240% more likely to buy pet magazines Deductive Reasoning
  • 183. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Qualitative Research Quantitative Research Also Known As interpretative / responsive positivist / deductive Type of Reasoning (usually) inductive (usually) deductive Objective Generate insights that lead to hypotheses Validate insights by testing hypotheses Outcomes Illuminate a situation to create deeper understanding and insights Accept or reject a proposed theory, or get specific answers to well - defined questions Methods Qualitative, eclectic Quantitative, rigorous Approach to Validity truth seen as subjective and socially constructed truth seen as objective and universal
  • 184. Bryan Cassady Guest Professor, Bryan@fast-bridge.com New understanding that is actionable and competitively unique Interpretation of the research findings Consider carefully the research objectives. Data Analysis and Data Reduction Traditionally, marketing researchers and research agencies stop here
  • 185. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Of most value because offers new ways of looking at markets that lead to competitive advantage Summarizes the implications of the research for the business Selected information that is of interest, but lacking in implications Informs the business about a market, but no indication of relative importance of different pieces of information Of little value because it is usually difficult to understand and interpret on its own.
  • 186. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Inductive, Qualitative, Exploratory Research that Produces Insights Deductive, Quantitative, Confirmatory Research that Validates Insights
  • 187. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 188. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 189. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 190. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 191. Bryan Cassady Guest Professor, Bryan@fast-bridge.com New Products focus… Proactive, Episodic Reactive, Routine Validation Research Exploratory Research
  • 192. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Customer insights Ideas from Innovative Customers and Partners Patterns in Customer Transaction Data Observation of Customer Behavior in Native Surrounding Anomalies and Discrepancies Metaphors and Analogies Introspection, Intuition and Brainstorming
  • 193. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Top Management Product Development Legal and corporative affairs Corporate Marketing Market Research Product Marketing
  • 194. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 195. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 196. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Worst practices Best practices
  • 197. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 200. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 201. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 202. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Source : McKinsey Finance & Accounting Marketing Information Service Human Resources Market Research How useful is the information?Not very 1 2 3 4 5 very
  • 203. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 208. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 209. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 210. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 211. Bryan Cassady Guest Professor, Bryan@fast-bridge.com How do you think the insight was developed ?
  • 212. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 213. Bryan Cassady Guest Professor, Bryan@fast-bridge.com His conclusion… the idiots errors cancelled each other out
  • 214. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 215. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 216. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 217. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 220. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 221. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 222. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “Bringing new members into the organization, even if they’re less experienced and less capable, actually makes the group smarter simply because what little the new members do know is not redundant with what everyone else knows.” (p.31)
  • 223. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 224. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 225. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Alpha Group 138 132 135 139 135 137 Diverse Group 121 84 111 75 135 31
  • 226. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “Most of the time” the diverse group outperforms the group of the best by a substantial margin. See Lu Hong and Scott Page Proceedings of the National Academy of Sciences (2002)
  • 227. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Alpha Group ABD ADE BCD ABC BCD ACD Diverse Group AHK FD AEG EZ BCD IL
  • 228. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 229. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 230. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 231. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 232. Bryan Cassady Guest Professor, Bryan@fast-bridge.com collective intelligence increases as the “herd mentality” decreases and the people in the group express what they genuinely think rather than going along with whatever everyone else is saying. “The more influence a group’s members exert on each other, and the more personal contact they have with each other, the less likely it is that the group’s decisions will be wise ones.” (p.42)
  • 233. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Decentralization means everyone in the crowd will try their own approach to the problem rather than having their efforts directed from the top down.
  • 234. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Mon Tue Wed
  • 235. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Mon Tue Wed
  • 236. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Mon Tue Wed
  • 237. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Brad: (8-8)2 +(10-12)2 +(10-9)2 = 5 Matt: (10-8)2 +(12-12)2 +(8-9)2 = 5 Crowd: (9-8)2 +(11-12)2 +(9-9)2 = 2
  • 238. Bryan Cassady Guest Professor, Bryan@fast-bridge.com (Brad-Crowd)2 = 1 + 1 + 1 = 3 (Matt-Crowd)2 = 1 + 1 + 1 = 3
  • 239. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Implication: Diversity can trump skill
  • 240. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 241. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “If a group satisfies those conditions [diversity, independence, decentralization, aggregation] , its judgement is likely to be accurate. Why? At heart, the answer rests on a mathematical truism. If you ask a large enough group of diverse, independent people to make a prediction or estimate a probability, and then average those estimates, the errors each of them makes in coming up with an answer will cancel themselves out. Each person’s guess, you might say, has two components: information and error. Subtract the error, and you’re left with the information.” – James Surowiecki
  • 242. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Armstrong’s seer-sucker theory… no matter how much evidence exists than seers do not exist, suckers will pay for the existence of seers…
  • 243. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Why do we believe in seers… because we get fooled by randomness… because we are looking back not looking forwards..
  • 244. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Why not just hire an expert… Because, groups usually do better than experts
  • 245. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 246. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 247. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 248. Conclusions Cheap crowds ≈ Expensive research Greater descrimination between ideas New Product Concept Monadic Test With matched samples of 100 in the target market (Top 2 Box Purchase Intent) Research Market 1* With diverse group of 500 people- *betting (Top 2 Box Purchase Intent) Significant Differences A 85 86 B 83 82 C 81 90 + D 78 91 ** E 74 69 UK Norms (top 2 box) 67 67 F 64 24 *** G 64 22 *** H 54 53 I 49 39 *** J 43 17 Respondent Base Sizes: Monadic = 100 per cell / Research Market *Betting =502 Fig. 1, Top Two Box Purchase Intention Result – Research Market 1*
  • 249. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 250. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “The best collective decisions are the product of disagreement and contest, not consensus or compromise.” (p.xix) “The best way for a group to be smart is for each person in it to think and act as independently as possible.” (p.xix)
  • 251. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 252. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 253. Bryan Cassady Guest Professor, Bryan@fast-bridge.com A less-than-optimal "configuration" of product or service attributes and benefits is selected. Lack of a strong sustainable position in the market Marketers fall in love with a product no one else loves The marketing plan for the new product or service is not well implemented in the real world. Marketers assess the marketing climate inadequately. The plan is too complicated A failure to ask the right questions and a belief that everything is a big idea No Support to get things done A questionable pricing strategy is implemented. A weak positioning strategy is used. Cannibalization underestimated The advertising campaign generates an insufficient level of new product/new service awareness. Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world. Too focused on the internal game not enough on the market The Lemming effect
  • 254. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 255. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Unfortunately, they lost a few dollars on every customer they served.
  • 256. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 257. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Source: Compustat; Mckinsey analysis 100.0 19.2 68.3 12.5 101.1 13.5 Revenuees Fixed Costs Variable costs Operating profits 1 1 Price increase of 1.0% Price increase of 8.0%
  • 258. Bryan Cassady Guest Professor, Bryan@fast-bridge.com 2.3 3.3 7.8 11.1% Fixed cost Volume Variable cost Price …Create Operating Profit Improvement of 1% improvement in... *Based on average econimics of 2,463 companies in comopustat aggretate
  • 259. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 260. Bryan Cassady Guest Professor, Bryan@fast-bridge.com And most importantly something you think about, not (and I repeat) not something determined solely by your competition
  • 261. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Illustrating Price Relationship Price Vol. Rev. Cost Profit (£) Unit (m) (£m) (£m) (£m) 1 17 17 27 -10 2 16 32 36 6 3 14 42 24 18 4 9 36 19 17 5 7.5 37.5 17.5 20 6 5 30 13 15 7 3 21 13 8 8 2 16 13 8 9 1 9 11 -2 10 0 0 10 -10
  • 262. Bryan Cassady Guest Professor, Bryan@fast-bridge.com -15 -10 -5 0 5 10 15 20 25 1 2 3 4 5 6 7 8 9 10
  • 263. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 264. Bryan Cassady Guest Professor, Bryan@fast-bridge.com High Value Super Value Mild Value Economy
  • 265. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 266. Bryan Cassady Guest Professor, Bryan@fast-bridge.com The right price is not objective, but value based
  • 267. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 268. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 269. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 270. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 271. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 272. Bryan Cassady Guest Professor, Bryan@fast-bridge.com How much a rational consumer would be willing to pay for your product, if he had a perfect understanding of its actual worth* … John Gourville Harvard Marketing Guru
  • 273. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 274. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 275. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 276. Bryan Cassady Guest Professor, Bryan@fast-bridge.com $120 $108 $480 $432 $100 $108 Price Labour Costs Servicing/Diesel $700 - $540 - 10% - 10% $ 700
  • 277. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 278. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 279. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 280. Bryan Cassady Guest Professor, Bryan@fast-bridge.com The problem: result = ball dependent Consumers didn’t use the ball Worse results, product died (same idea back as Liquid compact)
  • 281. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 282. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 283. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 284. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 285. Bryan Cassady Guest Professor, Bryan@fast-bridge.com High Price Low Price Price 31 18 Client 60 100 Cost/ Unit 14 10 Net/ unit 17 8 Profit 1020 800
  • 286. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 287. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Our chef's thinking High Price Low Price Likely Best Case Price 31 18 24.5 54.5 Clients 60 100 80 85 Cost /unit 14 10 12 11.5 Net/ unit 17 8 12.5 13 Profit 1020 800 1000 1105 Differential Pricing High Medium Low Total Price 31 24.5 16 27.5 Clients 55 25 10 90.0 Cost /unit 11 11 11 11.0 Net/ unit 20 13.5 5 16.5 Profit 1100 337.5 50 1,487.5 Extra points % Increase Versus likely results 578 63% Versus maybe scenario 383 26%
  • 288. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 289. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 290. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 291. Before you start… Do you have a product someone wants ? If not, don’t waste your time
  • 292. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Facts The new airplane will be competing against Cessna’s flagship C172 which has a list price of $300,000. This would be your logical starting price point. Thoughts Customers look to substitutes for clues on what your product is worth. Even if you have a great product but competitors set their prices unrealistically low, customers will assume your product is worth less. Substitutes Competitors Income Demand Environment
  • 293. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Facts Your plane will have a faster cruising speed, a longer cruising range, a faster climb rate and a revolutionary new safety system. Your research suggests these attributes should be worth about $120,000 to purchasers. Your brand, however, is less well known meaning resale value will be affected. Detract $30,000 from the new airplane’s value to allow for this. Thoughts How your product measures up (in terms of attributes) by comparison with your competitors. Customers will look at brand, convenience, quality, service, style and other attributes to evaluate whether your product’s value is lower or higher. This dictates whether you can charge a premium. Substitutes Competitors Income Demand Environment $300,000
  • 294. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Facts People who purchase your airplanes are able to claim a $25,000 tax break on their federal taxes because this plane features an enhanced safety system. Thoughts The income level of your product’s buyers, and whether they have discretionary income or watch every penny. Obviously the higher their income, the more “wriggle room” you have to increase your margins. Increases in your customer’s income will also impact their value perceptions Substitutes Competitors Income Demand Environment $300,000 $90,000
  • 295. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Facts To cover increased operational costs, airports have recently raised their landing fees. To compensate for that, most airplane manufacturers are lowering their list prices by $20,000. Thoughts Changes in the price for related products. For example, the price of gasoline influences the relative value of gas guzzlers. Increases or decreases in the prices of any products which are related to yours will impact noticeably on the perceived value of your product. Substitutes Competitors Income Demand Environment $300,000 $90,000 $25,000
  • 296. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Facts There have recently been some very positive news articles run in major newspapers talking about the benefits of private ownership of airplanes. It’s currently considered to be the “in thing” to do. This should allow you to increase your prices by about $15,000 Thoughts The overall market environment and whether your product’s value is going to be affected by the arrival of a fad, new information, or other external events beyond your control Substitutes Competitors Income Demand Environment $300,000 $90,000 $25,000 - $20,000
  • 297. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 298. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 299. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 300. Bryan Cassady Guest Professor, Bryan@fast-bridge.com $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 Potential Price Points Too Cheap Expensive Too Expensive Bargain 100 Van Westerndorp Output 0 80 60 40 20 “Stress Zone” MPC (Marginal Cheap Price) OPP (“Optimal Price Point”) IDP (Indifference Price Point) MEP (Marginal Expensive Price)
  • 301. Bryan Cassady Guest Professor, Bryan@fast-bridge.com $5 $6 $7 $8 $9 $10 $11 $12 $13 $14 $15 Potential Price Points 40% 20% 0% Van Westerndorp Output
  • 302. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Brand A Brand B Brand C I would not buy any of these. Brand A Picture Brand B Picture Brand C Picture No Bells and Whistles Bells and Whistles Bells, no Whistles Regular Shipping Next Day Delivery Two Day Delivery No Money Back Guarantee Money Back Guarantee Money Back Guarantee $27.00 $44.00 $35.00     A regression technique - usually multinomial logit -- is used to analyze the model. Even so, a fair amount of analysis can be done using high level data summaries.
  • 303. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Note: Disguised example. Attributes and measures have been altered. Select the beverage you would be most likely to purchase at your next visit to a convenience store. If you would not choose any of these, select the “none” option. Next None
  • 304. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Price +20% +15% +10% +5% Current -5% -10% Share of Demand Elasticity: Rate at which demand falls as price increases. 10% 14% 18% 22% 26% 30% 34% 36%
  • 305. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 306. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 307. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 308. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 309. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Consumer surplus Ride 1 at $ 0 price Price willing to Pay per ride Demand 0 1 2 3 4 5 6 Number of rides
  • 310. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Strategic Options Lever Segment Attribute Importance Price Discount Smart Consumer High Income Shopper Advance Purchase Smart Consumer High Income Shopper Airlines Smart Consumer High Income Shopper Restricted Timings Smart Consumer High Income Shopper Magnet Fence Proposed Design Discount Vocation travel Fare Feature Rationale  50% discount to full fare  Attract price sensitive “ Smart Consumer segment”  1 month advance purchase  No ability to specify airline carriers  Weekday department  Discharge “High income Shopper” from switching to low price seats
  • 311. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 312. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 313. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 314. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 315. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 316. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Be Found offers several flexible pricing solutions which are all based on a "no cure no pay" model. For example you may choose to pay for the qualified visitors who enter your site, a flat fee for every new membership or a percentage of each online sale.
  • 317. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 318. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 319. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 320. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 321. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 322. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 323. Bryan Cassady Guest Professor, Bryan@fast-bridge.com “One fallacy is the belief that the consumer acts ‘logically’ in his or her buying decisions.” James P. Nault, Fairmont Foods
  • 324. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 325. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 326. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 327. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 328. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Source: Dickson & Sawyer (1990)
  • 329. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 330. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 331. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 332. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 333. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 335. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 336. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 337. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 338. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 339. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 340. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 341. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 342. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 343. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 344. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 345. Bryan Cassady Guest Professor, Bryan@fast-bridge.com $ 9.95 Shipping and handling = their profit Question: Why does it work
  • 346. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 347. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 348. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 349. Bryan Cassady Guest Professor, Bryan@fast-bridge.com i iii ii iv
  • 350. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 351. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 352. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
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  • 354. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 355. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 356. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 357. I offered to pay €0 They then processed my order
  • 358. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 359. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 360. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Note Best Selling album in 2008 4 million copies
  • 361. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 362. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 363. Bryan Cassady Guest Professor, Bryan@fast-bridge.com A less-than-optimal "configuration" of product or service attributes and benefits is selected. Lack of a strong sustainable position in the market Marketers fall in love with a product no one else loves The marketing plan for the new product or service is not well implemented in the real world. Marketers assess the marketing climate inadequately. The plan is too complicated A failure to ask the right questions and a belief that everything is a big idea No Support to get things done A questionable pricing strategy is implemented. A weak positioning strategy is used. Cannibalization underestimated The advertising campaign generates an insufficient level of new product/new service awareness. Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world. Too focused on the internal game not enough on the market The Lemming effect
  • 364. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 365. 0 1 2 3 4 5 6 7 8 9 10 utilities mortgage credit cards internet pension savings telephone personal loans insurance Lowest chance of success Highest chance of success
  • 366. Bryan Cassady Guest Professor, Bryan@fast-bridge.com 0 1 2 3 4 5 6 7 8 9 10 utilities mortgage credit cards internet pension savings telephone personal loans insurance Lowest chance of success Highest chance of success
  • 367. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Group 2 3 4 5 6 8 9 Total Utilities 55 69 77 106 42 76 49 72 Credit cards 136 149 85 45 52 53 72 86 Mortgage 96 43 44 144 106 101 79 89 Pension 98 79 81 58 111 113 109 94 Internet 67 51 181 96 98 129 93 102 Savings 128 113 111 125 85 102 83 106 Telephone 75 98 135 75 163 105 136 111 Personal loans 114 132 79 141 129 78 144 114 Insurance 133 177 100 109 130 144 136 129 Correlations Group 0.42 0.58 0.50 0.48 0.40 0.40 0.34 0.45 Class 0.17 0.32 0.13 0.12 0.36 0.22 0.35 0.24
  • 368. Bryan Cassady Guest Professor, Bryan@fast-bridge.com Group 2 3 4 5 6 8 9 Total Utilities 55 69 77 106 42 76 49 72 Credit cards 136 149 85 45 52 53 72 86 Mortgage 96 43 44 144 106 101 79 89 Pension 98 79 81 58 111 113 109 94 Internet 67 51 181 96 98 129 93 102 Savings 128 113 111 125 85 102 83 106 Telephone 75 98 135 75 163 105 136 111 Personal loans 114 132 79 141 129 78 144 114 Insurance 133 177 100 109 130 144 136 129 Correlations Group 0.42 0.58 0.50 0.48 0.40 0.40 0.34 0.45 Class 0.17 0.32 0.13 0.12 0.36 0.22 0.35 0.24
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  • 370. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 371. Bryan Cassady Guest Professor, Bryan@fast-bridge.com
  • 372. Bryan Cassady Guest Professor, Bryan@fast-bridge.com * Not accurate, but for description