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Lecture 5
Empirical Marketing
| Question | Answer |
|---|---|
| What is innoavation? | The creation of substantial new value for customers by creatively changing one or more dimensions - broader than product or tech innovations - must generate new value for costumer and seller - Involves change leading to SCA and differentiation |
| What are the different ways of innovation? | - changing what the firm offers - changing who the customesr are - changing how you sell to customers - changing where to sell to customers |
| What is the definition of offering and innovation strategies? | 1. launch new offerings to customers to generate sales with good profit levels 2. develop innovative offerings by collecting customer input and forecasting market trends - many good products fail due to poor launches - extensive efforts go into testing |
| What are the 3 drivers of adoption fir new offering diffusion rates? | 1. People: users with diff propensities of adapting 2. psychology: what are the sources of persuasion 3. products: specific product characteristics may help or hinder adoption |
| What are the 4 groups of potential user? | 1) innovators: first to adopt 2) early adopters: see benefits, are willing after just a few benefits 3) early majority: Pragmatic consumers who need to be convinced that product works 4) late majority & laggards: want more evidence; hard to persuade |
| What is the chasm? | The gap between early adopters and early majority |
| Describe the psychology of adoption | -Social proof: looking at others for what to do, more people= belief its right, more similar people= impact on behavior -Authority: respect for authority -Scarcity: things seem more valuable when limited -Prospect theory: Perceived value of gain/loss |
| What are the product characteristics? | 1. Relative advantage 2.Compatibility 3. Complexity 4. trial ability 5. observability |
| What is the relative advantages of product characteristics? | Degree to which an offering is perceived as being being better than the ideas it supersedes - economic - status, prestige |
| What is the compatibility of product characteristics? | Degree to which an offering is perceived as consistent with existing values and experiences - often must break habits, perceptions, beliefs |
| What is the complexity in product characteristics? | Degree to which an is offering is perceived and relatively difficult to understand/use -education is key - speed and easy use of google |
| What is the trial ability in product characteristics? | Degree to which a offering can be experimented with on a limited basis - free samples, demos, test drive - especially salient for high cost, time and risky products |
| What is the observability in product characteristics? | Degree to which the results of an offering are visible to others - especially salient for status products - can be negative |
| What are red ocean strategies? | Classic STP focus on red ocean - known market space, competitive rules and industry boundaries - products mature and become commodities - can be managed tested and analyzed |
| What are blue ocean strategies? | Disruptive positioning focuses on the blue ocean - Market space does not exist - Demand is created rather than fought over - Hard to test, more of an art, often requires intuition, high risk |
| Describe red ocean strategy | - New offerings are brand + line extensions, = incremental innovations - account for most of sales but earn lower relative profits - competitive rivalry in existing markets - Must beat existing competition - try to capture part of existing market |
| Describe blue ocean strategy | - less but more radical + repositioned offerings, focus on creating new markets - success has higher profit levels - less competition - transforms image of competitors till they become a negative attribute in new market - creates new demand |
| What is sustaining technology? | Are well understood and typically exploited by market leaders, which produce continuous, incremental improvements over time |
| What is disruptive technology? | Are accordingly present different price and performance characteristics or value propositions. |
| What are the attributes of sustainable technology? | - improve performance of established products along dimensions valued by mainstream customer in major markets - products often overshoot customer needs - process support incremental product improvements (lower risk) |
| What are the attributes of disruptive technology? | - Results in worse performance in the short term - Brings to market different value proposition - underperforms established products in markets - typically cheaper, simpler, smaller to use - eventually are good enough (new entrants) |
| Why do market leaders fall into the technology trap? | - firms find it difficult to invest in DT, lower margins, customers don't want it - Growth target bias firms to larger markets - Markets for D innov can't be quantified Solution: An organ tasked with building a business around D innov in parallel |
| What is the stage gate design review process for effective product development? | 1. Concept + definition: initial screening of all ideas 2. Design + development: financial feasibility, testing of price points 3. Validation + production: continued market launch planning and manufacturing 4. Final audit: final product + assessment |
| What is conjoint analysis? | Is a process for determining the 'unit-less' tradeoff among attributes and set of attributed that maximizes appeal |
| What are the 2 main stages of conjoint analysis? | 1. Conjoint design: attributes and levels, type of conjoint selecting profiles 2. Conjoint analysis: recovering part-worthy utilities, identify segments |
| Describe conjoint design | - Products are represented as bundles of attributes - levels of each attribute define the product |
| Describe conjoint analysis | - Respondents rate several profiles on 1-10 or 1-100 scale - Use linear regression to recover part-worthy utilities |
| When do you use conjoint analysis? | - To identify product attribute trade offs that customers are willing to make for a new product - To predict the market share and impact of a proposed new product - To determine the amount that customers are willing to pay for a new product |
| What is the importance of an attribute? | (Attribute PW-utility range)/ (Sum of all PW utility range) |
Created by:
janasultan
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