Global Innovation Management Electronic Marketing Components, Customers and Product Demand

Global Innovation Management Components Review

Global Innovation Management Tools to Explore Demand Quizzing: cursory feature mapping for market- differentiation Visualization: to explore architecture of component assembly Mind mapping: clusters and prioritizes the features that influence potential customers Consumption chain analysis: identification of the potential marketing channel activity and target customers Detailed feature map for each activity to identify what should be managed

Global Innovation Management Toolsets Quiz & Organize with a Mind Map Ask Questions: Customer Experience is dynamic Who? … is with customers while hey use the product –How much influence do they have If we could arrange it, who would we want the customer to be with … What? –… Do our customers experience when the use the product –… needs provoked our offering What else? … might customers have on their minds When? … do our customers use this.. Where? … are our customers when they use this How? … do customers learn to use the product.

Global Innovation Management Toolsets Overview of Feature Set Prioritize and choose the major features of Beats’ innovation Review the main innovation features with a feature- attribute map for the entire innovation BasicDiscriminatorEnergizer PositiveNonnegotiableDifferentiatorExciter NegativeTolerableDissatisfierEnrager Neutral So What? Parallel

Global Innovation Management Toolsets Consumption Chain Analysis Determine the main steps in consumption You should only list the 3 or 4 most important steps These will determine whether the potential customer proceeds to the next step (good) –Or leaves the consumption process (not good)

Global Innovation Management Toolsets Feature-Attribute Map the 3-4 Key Steps in the Consumption and Manage those 3-4 Steps Identify Discriminators and Energizers Describe how you will manage each of these features of the consumption process BasicDiscriminatorEnergizer PositiveNonnegotiableDifferentiatorExciter NegativeTolerableDissatisfierEnrager Neutral So What? Parallel

Global Innovation Management Recipes, Not more Cooking Big advances in our standard of living have always come from ‘better recipes, not just more cooking’ Economist Paul Romer Innovation is not necessarily about ‘new’ technology, design or marketing. It is about new combinations and configurations of features, limited only by the constraints imposed by existing technology.

Global Innovation Management Your Capabilities Automatically differentiate your Innovations

Global Innovation Management The Purpose of a Business is to Create a Customer -- Peter Drucker Even if you create marvelous inventions –Your customers won ’ t care –Unless that is exactly what they need Business customers are especially impatient –With any product that doesn ’ t help them gain competitive advantage

Global Innovation Management Walking through the Customer Experience Quizzing and mind maps establish a context Once you have identified the particular customers you are trying to impress, –the next step is to walk through the customers’ experience This identifies the channel activities which must be managed And is accomplished using the Consumption Chain

Global Innovation Management Function of Quizzing Detailed look at customer usage and decision making regarding your product Looks at the customers “ stream of consciousness ” –Through a series of questions Looks for ideas to Change the Customer ’ s Experience (i.e., redifferentiate your product)

Global Innovation Management Questions in Quizzing –What is the problem? –Who (which individual in the case) is responsible for solving the problem and making a decision? –Where is the money? (The value generated by the solution) –When does the problem need to be solved? –How will you measure success? –Why did you have this problem, and what will you do to prevent it in the future?

Global Innovation Management Tension On the one-side are arguments about what the customer wants (demand-side) –Remember that the customer doesn ’ t care about us or our products –We have to make them care On the other-side are arguments about what we can do (supply-side) –These are determined by our core capabilities

Global Innovation Management Feature or Attribute Map

Global Innovation Management Channel Activities Each bubble on the consumption chain represents a channel activity that must be managed Either the customer proceeds to the next activity –Or you have lost that customer Feature or Attribute Maps identify the features that need to be closely managed

Global Innovation Management Consumption Chain

Global Innovation Management Costs and Revenues The demand feature map identifies –revenue generating opportunities through the differentiators and exciters, or –revenue destroying risks through the dissatisfiers and enragers The supply feature map identifies –Costs that must be controlled –And matched to revenue generation opportunities

Global Innovation Management Workout: Meeting the Entrepreneurial Challenges

Global Innovation Management Workout Objectives Framing Challenge (What is the Real Business?) –Potential customer set & e-Marketing business opportunity, –Features / attributes that will be profitable with these customers –Channels (consumption chain & conversion cone) appropriate for these customers Venture Capital Challenge (What is the Business Value?) –What is your business worth, and why? –You compete in two markets: consumer & financial –Consumers look for narrative –Financiers want to tie that narrative to numbers: activities, operations and products? competitive forces outside management control Net Present Value of future activities Communication Challenge (Why should I listen to you or give you money?) –‘Lead in’ which will ‘hook’ your listener (the elevator pitch) –Consider most important features of business model –Fast & fulfilling (the 25 second pitch)

Global Innovation Management Be Comprehensive & Brief

Global Innovation Management Workout #1: Communication + Framing Challenge Communication Challenge (Why should I listen to you or give you money?) –‘Lead in’ which will ‘hook’ your listener (the elevator pitch) –Consider most important features of business model –Fast & fulfilling (the 25 second pitch) Framing Challenge (What is the Real Business?) –Potential customer set & e-Marketing business opportunity, –Features / attributes that will be profitable with these customer Remember: Businesses today are not usually what they seem, e.g.: iTunes is a hardware business Amazon is a software business Google is an advertising firm MacDonald's is a property company –Figure out where your business makes money… the money making part is your real product

Global Innovation Management Workout #1: Three features to make your Product Competitive BasicDiscriminatorEnergizer PositiveNonnegotiableDifferentiatorExciter NegativeTolerableDissatisfierEnrager NeutralSo What?Parallel

Global Innovation Management Workout #2 Channels + Venture Capital Challenge Determine the main steps in consumption chain – conversion cone –One of these should be your AdWords campaign Venture Capital Challenge –What is your business worth, and why? –Costs of each of the consumption chain activities –How will these expenditures keep the customer from leaving the chain-cone –Conversion value, rate and risk

Global Innovation Management Workout #3 Communication +Venture Capital Challenge Provide a brief ‘sales pitch’ to describe your product and the main points of the business Answer your investors’ question about customers: –“Why do they want what you’re selling, and why should they pay for it?” Answer potential investors’ questions: –Why should I give you My money?” –How much money do you need, for what percentage of the company How will you negotiate? Your counteroffers?

Global Innovation Management Workout #3 Negotiations and Counteroffers (Shark Tank Part) Create pro forma financial statements for up to 3 years –Balance Sheet containing cash, AR, Inventory, Fixed assets, Liabilities and RE –Income Statement containing Sales, SG&A Expenses, Gross Margin, Net Profit –Provide pro forma forecasts of ROI, and Scenarios (Best, Worst, Expected) Tie this to conversions, consumption chain & business model How will you deal with competitors and competitive forces outside management control