Market insights driving design processes Dany Robberecht [email_address] www.mastersininnovation.com VERHAERT INNOVATION DAY – OCTOBER 17 th , 2008 www.mastersininnovation.com Commercially confidence – This presentation contains ideas and information which are proprietary of VERHAERT, Masters in Innovation  *, it is given in confidence. You are authorized to open and view the electronic copy of this document and to print a single copy. Otherwise, the material may not in whole or in part be copied, stored electronically or communicated to third parties without prior agreement of VERHAERT, Masters in Innovation  *. * VERHAERT, Masters in Innovation is a registered trade name of Verhaert Consultancies N. V.

Your product must go beyond ‘utility’ © Productbrigade – www.productbrigade.com

New product development in a business perspective NPD’s challenge  deliver, with highest probability, a product that will win in the marketplace Consequence:  provide maximum value to a collective of stakeholders Quote of Robert G. Cooper “ A common mistake is to assume that because a product may be adequate in the eyes of the designers or R&D department, the customers w ill see it the same way. ” Integrate the voice of the customer

NPD’s challenge

 deliver, with highest probability, a product that will win in the marketplace

Consequence:

 provide maximum value to a collective of stakeholders

Quote of Robert G. Cooper

“ A common mistake is to assume that because a product may be adequate in the eyes of the designers or R&D department, the customers w ill see it the same way. ”

Would you buy them? Toilet Snorkel US Patent Bullet proof bed www.qsleeper.com How would a good product for the problem look like?

Market & business analysis at Verhaert Understand the attractiveness of the market, thus the potential it represents Recognize what kind of users the product is targetting and what specific needs they have Identify how to bring your product to the market and how to motivate the people in this value chain Be aware of the competition and how to differentiate from them Solid market information is essential to build good products with strong business potential

Understand the attractiveness of the market, thus the potential it represents

Recognize what kind of users the product is targetting and what specific needs they have

Identify how to bring your product to the market and how to motivate the people in this value chain

Be aware of the competition and how to differentiate from them

The standard process Typically a non-integration of two determining processes Does it feel you’re running behind the facts? Consult Design Prototype Feedback

Typically a non-integration of two determining processes

Does it feel you’re running behind the facts?

Typical marketing sources They might lead to poor connection with market needs and to undifferentiated products

Another proven concept: lead users Lead users Frustrated users Customer intimacy Digital communities Polls & research

Companies are mostly interested in the needs of existing markets, but ... User-centered-design or market driven design?

Segmentation or who are your customers? What valuable information can we retrieve from an engineering perspective? Be aware of the forces between product development and marketing Instead of using the typical discrimators, we segmented from a job-to-be-done perspective different jobs – different value perceptions

What valuable information can we retrieve from an engineering perspective?

Be aware of the forces between product development and marketing

Instead of using the typical discrimators, we segmented from a job-to-be-done perspective

The right perspective to job-to-be-done Job-to-be-done is about the use and the user Scenario thinking Personas Etnographic research Focus groups Job-to-be-done is about the human motivation: needs – emotions - motivations Job-to-be-done is about the promise you make!

Job-to-be-done is about the use and the user

Scenario thinking

Personas

Etnographic research

Focus groups

Job-to-be-done is about the human motivation:

needs – emotions - motivations

The value chain impacts your architecture & design We have chosen to allow a twofold distribution model Value Added Reselling Product distribution It is a question of retaining maximum margin or giving away margins to incentify retail Family Call center

We have chosen to allow a twofold distribution model

Value Added Reselling

Product distribution

It is a question of retaining maximum margin or giving away margins to incentify retail

Market information: cheap or expensive? Press articles € 2-4 Basic company info € 4-10 Company financials € 30-50 Company profile € 50 – 150 General market report € 2.000 – 2.500 Specialized report > € 5.000 Single client market report > € 20.000

Press articles € 2-4

Basic company info € 4-10

Company financials € 30-50

Company profile € 50 – 150

General market report € 2.000 – 2.500

Specialized report > € 5.000

Single client market report > € 20.000

Pitfalls of not good-enough market research No emotional base Too complex logistics Change peoples habits We all seem to investigate the appreciation of new product qualities but forget to ask if customers will buy it!

Connecting to consumer insights remains difficult MC Donalds Deluxe Line Basically you look for something you do not know. Even worse, you get answers creating the illusion you know! Lost: $300m (Add spend $100m) RJ Renolds – premier cigarette Project cost: $1bn What if you fail to meet latent requirements of the majority of users? ... consumer insights are most effective when they are: Unexpected Create disequilibria Change a momentum Exploited via a benefit or point of difference that your brand can deliver

MC Donalds Deluxe Line

... consumer insights are most effective when they are:

Unexpected

Create disequilibria

Change a momentum

Exploited via a benefit or point of difference that your brand can deliver

Taking it from a different perspective Beyond the boundaries of this paradigm The marketing paradigm

Mass customisation turns it completely around

Mass customisation turns it completely around

mi-adidas case

Four levels of mass customisation Differentiation level Customised products / services fulfilling each individual need Relationship level Lock-on a consumer for longstanding relation Cost level Mass production efficiency Solution space Stable processes and product architectures © F. T. Piller et al. © F. T. Piller et al. Advanced Dev. Design Build Test (feedback) Advanced Dev. Design Build Test (feedback) customer manufacturer Mass production Mass customisiation

Archetypes of mass customisation Match-to-order / Locate-to-order Selection of existing products/services according to customer requirements Sales, retail System of customer integration Bundle-to-order Bundling of existing products to customer-specific product Assemble-order Assembling of products/services from standardised components/process blocks Made-to-order Manufacturing of customised products including component manufacturing Engineer-to-order Selection of existing products/services according to customer requirements Sales, retail Final assembly manufacturing Design, development Decoupling point cases Value generation © Archetypes of mass customisation – F. T. Piller et al. Degree of customer interaction

I don’t think it is for me ... © F. T. Piller et al. Construction - Windows Industry – Conveyor belts Construction – accu’s

Conclusions Consumer insights are very important inputs, but they are very difficult to get The ‘job-to-be-done’ framework provides the valuable inputs for R&D leading to differentiated products a well-thought product story Innovation goes beyond R&D, business innovation may provide improved R&D output

Consumer insights are very important inputs, but they are very difficult to get

The ‘job-to-be-done’ framework provides the valuable inputs for R&D leading to

differentiated products

a well-thought product story

Innovation goes beyond R&D, business innovation may provide improved R&D output

Verhaert New Products & Services nv Hogenakkerhoekstraat 21 9150 Kruibeke Belgium Tel +32 (0)3 250 19 00 Fax +32 (0)3 254 10 08 www.verhaert.com [email_address] www.mastersininnovation.com