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Using Marketing in High Technology Product

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Title: Using Marketing in High Technology Product


1
Using Marketing in High Technology Product
Service Development
  • Dr. Alan Carsrud
  • FIU Center for Global Entrepreneurship and
    Innovation

2
Overview of the Stage Gate Process
Stage V Production and Market Launch
Stage IV Testing and Validation
Stage III Development
Stage II Detailed Investigation
Stage I Preliminary Investigation
Idea Generation
Adapted from the Stage Gate process by Robert J.
Cooper
3
Detailed Investigation
Stage II Detailed Investigation
Stage I Preliminary Investigation
Idea Generation
Adapted from the Stage Gate process by Robert J.
Cooper
4
Key Activities
5
Identify User Needs Wants
  • Gather raw data
  • Interviews
  • Focus Groups
  • Observation
  • Interpret raw data
  • Affinity Diagram
  • Needs Statements
  • Organize needs establish importance
  • Surveys
  • Conjoint Analysis

Karl T. Ulrich and Steven D. Eppinger 2nd
Edition, Irwin McGraw-Hill, 2000.
6
Gather Raw Data- Interview Segmentation
Non-Traditional Segmentation
Traditional Demographic Segmentation
Mark Martin, Acting Assistant Professor Stanford
University, 2000
7
How many interviews are needed?
Per major market segment
8
Focus Groups
  • Two hours of one-on-one interviews
    Two-hour focus group
  • Focus groups can cause group-think
  • Participants agree with a question in focus group
  • Participants give opposing answers when asked
    individually

Silver Thompson 1991
9
Interviews vs. Focus Groups
100
80
60
Percent of Needs Identified
40
20
0
0
1
2
3
4
5
6
7
8
9
10
Number of Respondents or Groups
From Griffin, Abbie and John R. Hauser. The
Voice of the Customer, Marketing Science. vol.
12, no. 1, Winter 1993.
10
Interpret Raw Data Screwdrivers Example
11
Affinity Diagram (a.k.a. KJ diagram)
  • Organizes subjective information
  • Example Group the following CRs
  • ease of handling portability
  • number readability dose metering
  • load handling ease of use

12
Five Guidelines for Writing Needs Statements
13
Things to Remember
  • Capture What, Not How
  • Collect visual, verbal, and textual data
  • Props will stimulate customer responses
  • Interviews are more efficient than focus groups
  • Interview all stakeholders and lead users
  • Develop an organized list of need statements
  • Look for latent needs
  • Survey to quantify tradeoffs

14
Translating CRs into Technical Specs
Portable Slide Projector Example
Mark Martin, 2000
15
Phase I - Portable Slide Projector
16
Phase II - Portable Slide Projector
Worth of components
17
Concept Development Funnel
18
Generate Product Concepts
Karl T. Ulrich and Steven D. Eppinger 2nd
Edition, Irwin McGraw-Hill, 2000.
19
Concept Generation Exercise Vegetable Peelers
20
Vegetable Peeler Exercise Voice of the Customer
  • "Carrots and potatoes are very different."
  • "I cut myself with this one."
  • "I just leave the skin on."
  • "I'm left-handed. I use a knife."
  • "This one is fast, but it takes a lot off."
  • "How do you peel a squash?"
  • "Here's a rusty one."

21
Clarify the Problem Key Customer Needs
  • 1. The peeler can be used for a variety of
    produce.
  • 2. The peeler can be used ambidextrously.
  • 3. The peeler creates minimal waste.
  • 4. The peeler saves time.
  • 5. The peeler is durable.
  • 6. The peeler is easy to clean.
  • 7. The peeler is safe to use and store.
  • 8. The peeler is comfortable to use.
  • 9. The peeler stays sharp or can be easily
    sharpened.

22
External Search
  • Lead Users
  • Benefit from improvement
  • Innovation source
  • Benchmarking
  • Competitive products
  • Experts
  • Technical experts
  • Experienced customers
  • Patents
  • Search related inventions
  • Literature
  • Technical journals
  • Trade literature

23
Internal Search
  • Suspend judgment
  • Generate a lot of ideas
  • Infeasible ideas are welcome
  • Use graphical and physical media
  • Make analogies
  • Use related stimuli
  • Use unrelated stimuli
  • Set quantitative goals
  • Trade ideas in a group

24
Concept Selection Process
  • Prepare the Matrix
  • Criteria
  • Reference Concept
  • Weightings
  • Rate Concepts
  • Scale ( 0) or (15)
  • Compare to Reference Concept or Values
  • Rank Concepts
  • Sum Weighted Scores
  • Combine and Improve
  • Remove Bad Features
  • Combine Good Qualities
  • Select Best Concept
  • May Be More than One or None
  • Beware of Average Concepts

25
Example Concept Screening
26
Example Concept Scoring
27
Things to Remember
  • The goal of concept selection is not to
  • Select the best concept
  • The goal of concept selection is to
  • Develop the best concept
  • So remember to combine and refine the concepts to
    develop better ones!

28
Things to Remember
  • Beware of the best "average" product
  • Perform concept selection for each different
    customer group and compare results
  • Check sensitivity of selection to the
    importance weightings and ratings
  • May want to use all of detailed requirements in
    final stages of selection
  • Note features which can be applied to other
    concepts

29
Concept Testing
  • Define the purpose of the test
  • Choose a survey population
  • Choose a survey format
  • Communicate the concept
  • Measure customer response
  • Interpret the results
  • Reflect on the results and the process

30
Concept Testing is Used for...
  • Go/no-go decisions
  • What market to be in
  • Selecting among alternative concepts
  • Confirming concept selection decision
  • Benchmarking
  • Soliciting improvement ideas
  • Forecasting demand
  • Ready to launch?

31
Concept Testing Example emPower Electric Scooter
32
Scooter Example
  • Purpose of concept test
  • What market to be in?
  • Sample population
  • College students who live 1-3 miles from campus
  • Factory transportation
  • Survey format
  • Face-to-face interviews

33
Communicating the Concept
  • Verbal description
  • Sketch
  • Photograph or rendering
  • Storyboard
  • Video Simulation
  • Interactive multimedia
  • Physical appearance model
  • Working prototype

34
Verbal Description
  • The product is a lightweight electric scooter
    that can be easily folded and taken with you
    inside a building or on public transportation.
  • The scooter weighs about 25 pounds. It travels at
    speeds of up to 15 miles per hour and can go
    about 12 miles on a single charge.
  • The scooter can be recharged in about two hours
    from a standard electric outlet.
  • The scooter is easy to ride and has simple
    controls just an accelerator button and a brake.

35
Sketch
36
Rendering
37
Storyboard
38
3D Solid CAD Model
39
Appearance Model
40
Working Prototype
41
Beta Prototype
42
Survey Format
  • PART 1, Qualification
  • How far do you live from campus?
  • ltIf not 1-3 miles, thank the customer and end
    interviewgt
  • How do you currently get to campus from home?
  • How do you currently get around campus?
  • PART 2, Product Description
  • ltPresent the concept descriptiongt

43
Survey Format
  • PART 3, Purchase Intent
  • If the product were priced according to your
    expectations, how likely would you be to purchase
    the scooter within the next year?

I would definitely not purchase the scooter.
I might or might not purchase the scooter.
I would definitely purchase the scooter.
I would probably not purchase the scooter.
I would probably purchase the scooter.
top box
second box
44
Survey Format
  • PART 4, Comments
  • What would you expect the price of the scooter to
    be?
  • What concerns do you have about the product
    concept?
  • Can you make any suggestions for improving the
    product concept?

45
Interpreting the Results Forecasting Sales
  • Q N x A x P
  • Q sales (annual)
  • N number of (annual) purchases
  • A awareness x availability (fractions)
  • P probability of purchase (surveyed)
  • Cdef x Fdef Cprob x Fprob

second box
top box
46
Forecasting Example College Student Market
  • N off-campus grad students (200,000)
  • A 0.2 (realistic) to 0.8 (every bike shop)
  • P 0.4 x top-box 0.2 x second-box
  • Q 200,000 x 0.20 x 0.4 x 0.3 0.2 x 0.2
  • 6400 units/yr
  • Price point 795
  • Revenue 5 million dollars

47
Forecasting Example Factory Transport Market
  • N current bicycle and scooter sales to
    factories (150,000)
  • A 0.25 (single distributors share)
  • P 0.4 x top-box 0.2 x second-box
  • Q 150,000 x 0.25 x 0.4 x 0.3 0.2 x 0.2
  • 6000 units/yr
  • Price point 1500
  • Revenue 9 million dollars

48
emPowers Market Decision Factory Transportation
49
Sources of Forecast Error
  • Quality of Concept Description
  • Quality of Testing Method
  • Concept testing v. conjoint analysis
  • Pricing
  • Level of Promotion
  • Word-of-Mouth Effects
  • Competition

50
Discussion
  • Why do respondents typically overestimate
    purchase intent? Would they ever underestimate
    intent?
  • How to use price in surveys?
  • How much does the way the concept is communicated
    matter?
  • When shouldnt a prototype model be shown?
  • How does early (qualitative) concept testing
    differ from later (quantitative) testing?

51
How to get to the next stage
  • Similar gate process but more detailed than stage
    1
  • Does it fit with the corporate strategy?
  • Does it offer a competitive advantage?
  • Is the market attractive?
  • Is it technically feasible?
  • Is it financially attractive?
  • Critical evaluation before Stage 3 - the money
    stage

52
Sample Gate 3
  • Business Strategy Fit
  • Congruence (fit with company strategy)
  • Impact (financial and strategic impact)
  • Product Competitive Advantage
  • Offers unique benefit to users
  • Meets user needs better than competitive product
  • Provides good value for money to customer
  • Market Attractiveness
  • Market size
  • Market growth rate
  • Competitive situation

Weight Score
53
Sample Gate 3
Weight Score
  • Strategic Leverage
  • Leverages marketing, distribution selling
    resources
  • Leverages technological expertise resources
  • Leverages operational capabilities facilities
  • Technical Feasibility
  • Size of technical gap (small)
  • Technical complexity of project (low)
  • Technical uncertainty of outcome (low)
  • Risk v. Return
  • Expected profitability (NPV)
  • Percent return (IRR or ROI)
  • Payback period (years)
  • Certainty of estimates
  • Low cost and fast to do (low risk)
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