Verhaert Innovation Day 2011 – Dany Robberecht (VERHAERT) - Product differentiation strategies

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Speaker of Verhaert at the 8th edition of our Innovation Day on October 21st 2011.

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  • A customer's opinion of a product's value to him or her. It may have little or nothing to do with the product's market price, and depends on the product's ability to satisfy his or her needs or requirements.
  • The old meaning

    A healthy diary product in different flavors, enriched by bacteria cultures, supports the body functioning and can be enjoyed in a relaxing atmosphere when together at home.
  • The old meaning

    Buy and own the songs you want and build a personal universal music library.

  • A customer's opinion of a product's value to him or her. It may have little or nothing to do with the product's market price, and depends on the product's ability to satisfy his or her needs or requirements.
  • Verhaert Innovation Day 2011 – Dany Robberecht (VERHAERT) - Product differentiation strategies

    1. 1. INNOVATIONDAY 2011 PRODUCT DIFFERENTIATION STRATEGIES – THE HOLY GRAIL IN PRODUCT INNOVATION CONFIDENTI AL Dany Robberecht Director consulting office Dany.robberecht@verhaert.com
    2. 2. INNOVATIONDAY 2011 commoditization become unique expectations conclusion
    3. 3. INNOVATIONDAY 2011 Differentiating a product or service means creating a product or service which is perceived industrywide as being unique. It results in brand loyalty and lower sensitivity to price. I'm willing to pay extra for my …
    4. 4. INNOVATIONDAY 2011 A successful differentiation is focusing on delivering (perceived) value add to users and on competitive advantage. In other words the story telling component is as essential as the distinctive benefit of your innovation. Eventually it should lead to a strong experience.
    5. 5. INNOVATIONDAY 2011 performance + + + + brand A brand B In the product economy we try to over class each other with ‘better’ features. time© C. Christensen
    6. 6. INNOVATIONDAY 2011 + + + + brand A brand B customer absorbtion level performance time The rules of the game change when willingness to pay ends because products become good enough. © C. Christensen
    7. 7. INNOVATIONDAY 2011 + + + + brand A brand B customer absorbtion level performance time How to be perceived valuable? You seek recognition, strong story telling or distinctive benefits to satisfy needs. The experience economy becomes the rule. ? © C. Christensen
    8. 8. INNOVATIONDAY 2011 An example … In our product economy we often tell bizarre stories. Stories that not engage our users, neither they improve our competitive position. Despite the efforts of a whole company they don’t deliver anything.
    9. 9. INNOVATIONDAY 2011 If you manage it poorly, then this is your destiny.
    10. 10. INNOVATIONDAY 2011 But, we all love commodities. They offer economies of scale, thus accomplish efficiency in manufacturing as they target high volume markets. If we only could maintain our margins, YES!
    11. 11. INNOVATIONDAY 2011 the other side of the coin
    12. 12. INNOVATIONDAY 2011 CONFIDENTIAL There are two strategy choices: do what everyone else is doing, only better, cheaper or faster. Or do something different and truly distinctive.
    13. 13. INNOVATIONDAY 2011 It starts with being different therefore you must think differently
    14. 14. INNOVATIONDAY 2011 Let’s unveil the puzzle pieces and construct our puzzle.
    15. 15. INNOVATIONDAY 2011 Canon’s professional L series – though used extensively by non-pros - is recognized easy because of its distinctive color. It doesn’t add functions, but connects users to the brand.
    16. 16. INNOVATIONDAY 2011 Brompton folding bikes do not excel in weight, neither in usability, but everybody knows it’s a Brompton because of the iconic design.
    17. 17. INNOVATIONDAY 2011 ALU modem Materials, color, finishing, styling, modus operandi provide foothold for iconic products. Recognition and visibility combined with strong story telling are the foundation of iconic products. Users are willing to pay a premium price as they create value.
    18. 18. INNOVATIONDAY 2011 recognition in-store walking models
    19. 19. INNOVATIONDAY 2011 Often technology benefits are difficult to explain to users. Dyson’s bladeless fan promises a smooth airflow with no unpleasant buffeting because it has no blades. Users will buy it for another reason I suppose.
    20. 20. INNOVATIONDAY 2011 user research often leads to better insights of unmet needs. It provides foothold for distinctive features. Companies can build a succesful product strategy based upon these distinctive benefits, especially when they are visible and recognized easy.
    21. 21. INNOVATIONDAY 2011
    22. 22. INNOVATIONDAY 2011 reduce eliminate create raise attributesjuggling © Verhaert
    23. 23. INNOVATIONDAY 2011 What are great functionalities? Those that create experiences … Products having these abilities typically show a low churn rate. Especially in mature markets it is essential to keep your customer base, as the market faces a low or even zero-growth.
    24. 24. INNOVATIONDAY 2011 experience driven services In 1991 the concept was launched as a pilot project. Today it foresees athletes with custom made shoes. The concept includes scanners at the POS, a sales website and marketing collateral. At the back end the manufacturing concept was rigorously changed as well as the product architecture and logistics.
    25. 25. INNOVATIONDAY 2011 If creating superior products is not ambitious enough for your company then you seek the blue ocean by creating a new market. You want to discover how to tap into refusing non-consumers by addressing latent needs. However it is difficult to reinvent the meaning of a product or service, this strategy is very rewarding.
    26. 26. INNOVATIONDAY 2011 On-the-go health 1994
    27. 27. INNOVATIONDAY 2011 Back in a minute 1961
    28. 28. INNOVATIONDAY 2011 Stream and share 2008
    29. 29. INNOVATIONDAY 2011 + + + + brand A brand B customer absorbtion level performance time How to be perceived valuable? You seek recognition, strong story telling or distinctive benefits to satisfy needs. The experience economy becomes the rule. ? © C. Christensen
    30. 30. INNOVATIONDAY 2011 make goods create commodities services experiences market pricing premium pricing Choose your strategy © Verhaert
    31. 31. INNOVATIONDAY 2011 Understand focus and risks © Verhaert
    32. 32. INNOVATIONDAY 2011 + competitive advantage © Verhaert
    33. 33. INNOVATIONDAY 2011 manage perceived value Create distinctive performances and attributes. Translate into iconic designs. Resulting in user experiences and brand value.
    34. 34. INNOVATIONDAY 2011 Hogenakkerhoekstraat 21 9150 Kruibeke (B) tel +32 (0)3 250 19 00 fax +32 (0)3 254 10 08 info@verhaert.com More at www.verhaert.com helps companies and governments to innovate. We design products and systems for organizations looking for new ways to provide value for their customers. We are a leading integrated product innovation center; creating technology platforms, developing new products and business in parallel, hence facilitating new- growth strategies for our clients.

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