Term
| Why new products fail (4 reasons) |
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Definition
also just btw its hard to define what a new product even is and what success/failure is
1) poor timing
2) ineffective distribution/marketing
3) misunderstanding consumer needs/inadequate market analysis
4) wrong pricing |
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Term
| Porters five forces (these can be used to assess how desirable a market is when moving into a blue ocean) |
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Definition
1) barriers to entry
2) buyer power
3) supplier power
4) competitive rivalry
5) threat of entry |
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Term
| difference between primary and secondary demand |
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Definition
primary: advertising messages that promote an entire product category (rather than a specific brand). this is in order to either launch an entirely new product or to inform customers of an underapeciated category
secondary: more traditional marketing brings attention to your specific brand and competes with other players within the market |
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Term
| difference between red ocean and blue ocean |
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Definition
red: competes in existing market space, beats competition, exploits existing demand and you usually have to choose between differentiation and low cost
blue: creates an uncontested marketplace, makes competition irrelevant, there is no trade offs of differentiation and low cost because can achieve both |
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Term
ERRC framework for executing blue ocean strategies
- you do these things to existing products to create a new product |
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Definition
eliminate
raise
reduce
create |
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Term
| what does a strategy canvas look like |
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Definition
y axis - low and high
x axis - factors of the products |
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Term
disruptive innovations
- what they are, why they happen, and some characteristics |
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Definition
| creates a new market and value network and eventually disrupts an existing market and displaces the current market leaders. happens when existing leaders only focus on their most profitable customers and end up overshooting the mass market. then existing firms that used to suck come in and and catch up with what the market wants. usually are lower in price, used to have worse quality technology |
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Term
| difference between low end and new market disruptions |
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Definition
low end: provide something cheaper for consumers who cannot enter existing market because of price constraints ex: jetblue
new market: provide something new for people who cannot enter existing market because of preferences or convenient or strange needs. customers are usually those outside the main market ex: ink jet printers |
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Term
constraints that lead to non consumption (disruptions try to fix these constraints to capture these consumers)
there are 4 |
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Definition
skill related: dont have expertise to use current offering
wealth related: current solutions are too expensive
access related: consumption only takes place in certain settings
time-related: consumption takes too long |
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Term
| difference between disruption and blue ocean |
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Definition
disruption: can either create a new market or beat competitors
blue ocean: just creating new markets, no competitors involved |
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Term
| Reverse, breakaway, and stealth positioning |
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Definition
reverse: strips product down to a simple product and then builds the important attributes ex: ikea
breakaway: product escapes categroy and deliberately associates with a new one ex: swatch
stealth: sneak new ideas into the market so that customers are used to it for when you launch your actual products |
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Term
| relationship between existing and new products (cannibalization) |
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Definition
complements: has a positive effect on existing products (printer and computer) - usually the case for new product lines
substitutes: has a negative effect on existing products (ex: desktop and laptop) this is usually a line extentions or brand new product |
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Term
| how to calculate cannibalization rate |
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Definition
sales lost/sales gained
sales lost is only for the new product, not for any sort of external factors. however, if the new product leads to overall erosion of brand equity then it still counts |
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Term
| Sometimes for cannibalization rate if the loses is bigger than the gain you should still product because it can strengthen exsiting brand or can be profitable in the future |
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Definition
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Term
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Definition
WM = Mnew - c*Mold
Mnew = margins from the ew product
Mold = margns from the old project
c = cannibalization rate |
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Term
| break even quantity when fixed costs exist |
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Definition
profitable when wm*Qnew > Fnew
breakeven when those things equal eachother |
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Term
| NPV with and without new product (used to infer if a new product launch is profitable or if theres too much cannibalization, ect) |
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Definition
| NPV = cash flow/(1+itnerest)^t - initial investment |
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Term
| two data sources to infer profitability of a new product launch |
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Definition
1) aggregate sales data
2) customer level purchase histories
3) can also use perceptual maps because brands that are closer to each other on the map are more likely to cannibalize |
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Term
| systematic inventive thinking technique (idea generation technique) |
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Definition
attribute dependency: creating or changing a relationship between attributes aka external attributes (temperature) changes internal attributes (color of the bottle)
task unification: new task for an existing resources (shoes that hold money). with replacement = environment now does a job that a product used to do. without replacement = enviroment does a job that was never done before
subtraction: removing an essential compentent (apple store without cash register)
division: separate components (yougurt with fruit on the bottom)
multiplication: additing copies of the component that are different from the original (suitcase with matching carryon bag) |
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Term
| SCAMPER (idea generation technique) |
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Definition
Substitue: peppermint oreos
Combine: computer + keyboard = laptop
Adapt: movie theaters now show multiple movies
Modify or Magnify: double stuffed oreos
Put into another use: oreo ice cream
Eliminate or make smaller: bite size oreos
reverse or rearrange: inside out oreos |
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Term
| Triz techniques within triz (ugh) |
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Definition
separation principles: (in time - baking soda toothpaste, scale - bike chain, space - conference room , upon condition - transition lense)
nine windows: top = past present future; side: super system, system , subsystem
contradiction matrix: top: attributes (shape, suace, box, toppings) and then below write all the different types available. |
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Term
| what are perceptual maps and what is their main use |
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Definition
perceptual maps: visual representations of brands in the marketplace based on how customer's ~percieve~ their key attributes
helps identify gaps, helps compnay articulate and figure out the Core Benefit Proposition (CBP)
first identify two or three benefis that summarize all the attributes and then make these into the x and y axis (more on how to build in a different slide) |
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Term
| snake plots and why theyre disadvantageous |
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Definition
Snake plots: theyre a type of perceptual map but the attributes are along the bottom and the rating is on the side and you map it out for each brand
its hard to see who is competeing with who and hard to see the potential in the market |
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Term
| how to make a perceptual map (2 ways) |
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Definition
1) factor analysis: respondents rate each brand on a number of key attributes, factor 1 becomes the most imporant and factor 2 is the second most important. --> factor loading is the number that represents the rating. highest rated factors can be summarized into key benefits that will be used on x and y axis to make perceptual map
2) MDS = multidimensional scaling using similarity data
respondents rate the extent to which they percieve two brands to be similar. youll be able to put things into a perceptual map but you will not know the names of the axis |
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Term
| EVC, Reference Value, Differentiation Value |
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Definition
EVC = economic value to the customer = dollar value that represents cost and all benefits to the customer
- not all customers are willing to pay the same evc
Reference Value: cost of competing product that the customer views as the best substitute for the product being evaluated
Differentiation Value: value of product attributes that are different from those of the best substitues (positive if the customer likes it, negative if the customer does not)
EV = RV + DV |
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Term
| Preference analysis (and two types) |
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Definition
preference analysis: extent to which consumers value different attributes
1) ideal point: there is one spot where there is a perfect amount of the attribute (graph is half circle) ex: table
2) vector preference model: preference either increases or decreases as attribute increases. ex: bed softness |
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Term
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Definition
combo of perception and attribute importance
P (of one brand) = w1r1 + w2r2 +...
w = weight/importance of that benefit
r = perceptual rating
once you do that for all the brands you can infer the preference and rank them |
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Term
| two ways of infering preferences |
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Definition
1) direct: identify important attributes by asking customers directly
2) indirect: conjoint analysis = understand relative importance of a product and see tradeoffs that customers make between attribtes
rank different combinations of preferences...take average preference for each attribute to see whats most important |
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Term
| what is benefit segmentation and two types |
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Definition
benefit segmentation: identify groups of consumers who differ in terms of importance that they attach to each attribute
1) descriptive segmentation:segment based on characteristics of consumers (age, career, geographic)
2) behavioral segmentation: segment on behavior patters (what do these people do before purchasing? do they look online? |
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Term
| job-to-be-done perspective |
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Definition
| customers hire a product to complete a job |
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Term
| four approaches to mass customization |
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Definition
collaborative: a customeized product determined through a diaalogue with consumers (design backpack online)
adaptive: a standard product that users alter themselves after the purchase (kit that lets you draw on your shoes, unzip cargo pants)
cosmetic: a standard product presented differently to different users by only changing aesethics. (customize shirts and m&ms)
Transparent: based on customers' past behavior - no direct customer input (amazon or nord suggested items)
netflix could be an example of transparent and adaptive |
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