Product/Service Feasibility Analysis Studies Diane M. Sullivan (2007)

1. Prepare a Concept Statement Preliminary description of the entire business that includes Description of the product or service Description of target market Benefits of the product or service (value proposition) Description of product/service differentiators Description of how product/service sold/distributed Description of the founder(s) of the firm Purpose: Have relevant others (e.g., investors, target market members, suppliers, R&D experts, etc.) provide feedback as to their perceived potential of the business based on their area(s) of expertise. Change components of the business model components prior to investing many resources into the concept

Concept Statement – Super Slick Shower Doors® (SSSD) Product/Service Description Super Slick Shower Doors® (SSSD) will sell decorative Plexiglas “artwork” that will enhance the appearance of glass shower doors and stalls within existing homes. SSSD’s products work much like the panels that are magnetized onto kitchen appliances like refrigerators and dishwashers to create a uniformed cabinet look in the kitchen. Do-it-yourselfers (DYI) will visit retailers selling SSSD products to purchase standard-sized shower door/ stall artwork and SSSD’s website or stores for customized sizes. Target Market Description SSSD’s target market consists of homeowners who want to improve their homes by doing-it-themselves. SSSD specifically targets owners of existing homes who want to create a customized and aesthetically appealing look in their bathrooms without full renovation costs or decreasing the value of the home to future potential home buyers. Value Proposition The DYI market within the US is estimated at $5.9 billion annually and it is projected to grow at 5.1% annually for the next several years (freedoniagroup.com, 2007). This trend, coupled with sociocultural trends supporting consumer’s increasing desires for luxury and customized products/services and the transient-nature of the US population (BrainReserve, 2002) suggests that the window of opportunity is open for a venture offering affordable, customized, and non-permanent home improvement products. Differentiators SSSD’s production machinery and processes are patented. Further, the artwork designs offered for the glass are copyrighted and only available through the SSSD website, storefronts, and approved retailers. SSSD has secured a contract with the master artist Daniel Stone to produce the art designs for the glass. Further, SSSD artwork designs are produced in limited quantities, ensuring consumers that their bathrooms will look uniquely customized. How Sold/Distributed SSSD’s products will be sold and distributed via two primary channels. Industry standard sized shower door panels with standard designs (e.g., tropical theme, tile mosaic look, etc.) will be distribute to and sold through large home-improvement stores such as Home Depot and Lowe’s. Customers requiring customized sizes and custom-made designs can shop at an SSSD brick-and-mortar store or via SSSD’s website (www.SSSD.com) Description of Founder(s) SSSD is lead by Diane M. Sullivan, Ph.D.. Dr. Sullivan has 12 years of management experience, 6 years of entrepreneurship-related experience, and grew up in a family-owned business within the construction industry that operated for more than 20 years before the business successfully achieved a liquidity event.

Concept Statement—Assignment Requirements For the assignment, teams must show the concept statement to at least 3 potential customers and solicit their feedback via a survey or interviews Must develop a concept statement for the team’s business Develop a protocol for collecting the feedback about the initial idea Cover letter and survey Discuss feedback received (e.g., Show tabulated results/quotes from surveys.) How did the initial concept change as a result of the feedback received? Deliverables to be turned in: Include your protocol for collecting the feedback in your appendices Include your concept statement in your appendices Include the feedback/results you received in your appendices Discuss this procedure and the results in your presentation * Note the concept statement stage is usually an iterative process until user feedback is positive

2. Conduct a Concept Test Traditionally entails showing a representation of the firm’s offering (e.g., sketch, website, computer-generated design) to prospective users in hopes of gaining feedback and insight as to their preferences, likelihood of purchase, etc. Ideally a random, representative, sample of the target market would provide feedback about the offerings Can show the representation and solicit feedback via survey, focus group, interviews (see next three slides)

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Concept Test—Assignment Requirements For the class assignment, develop a representation of your concept—an illustration that can include a short description—that integrates feedback from concept statement stage Construct one surveys with cover letter Broadly assess and learn about the potential target market and their perceptions regarding the concept, purchase intentions, any modification needed (see the next slide for more information on this—Target Customer) Distribute this survey and collect data from at least 30 potential users Include your concept representation in your appendices Include the surveys, cover letter, and tabulated survey results in your appendices Discuss this procedure and the results in your presentation

3. Study the Target Customer (TC) This is the point where 1) the profile of the target customer and/or 2) changes to the business offering should start to become solidified Done hand-in-hand with the concept test Often entrepreneurs inappropriately identify their target market and/or have inaccurate assumptions about their target market A detailed study of the target market (e.g., demographics, socioeconomic status, etc.) can help to appropriately identify the proper market Note this is often an iterative process—may require reworking the concept to meet the TC’s needs/preferences and/or targeting a different customer group Even after venture launch, regularly assessing the TC’s needs/preferences should become a habit

Target Customer—Assignment Requirements For the class assignment, determine, study, and discuss who the firm’s customers are and what their needs are Based on your initial conceptions of who the TC are, as a part of your concept test survey include questions that allow you to develop a more detailed understanding of their profile (e.g., demographic data, socioeconomic data, etc.) (more on this later) If your initial conception of who the TC are was off, adjust the concept to meet the TC’s requirements and/or determine a more appropriate TC and assess their perceptions of the offering(s) and their profile

4. Study the Usability of the Business Offering Involves creating a prototype of the offering(s) Services can involve “practice rounds” Google Scholar Products can be physical representations (see example basic prototype) American Inventor Gym class exercise mat Show the prototype to potential users (e.g., a beta test) Obtain feedback from customers based on their “user experience” Was it easy to use? Was anything frustrating? Would other features make the offering more desirable? Are there any complementary offerings that might enhance the initial offering? Example: iPod and cell phone accessories Integrate feedback into the final form of the business offering

5. Determine the Intellectual Property (IP) Potential Is the business offering a candidate for intellectual property protection? Patents Copyrights Trademarks Are there pending or existing patents for the same type(s) of offerings that might hinder the business concept’s development? Search the US Patent and Trademark Office at: http://www.uspto.gov/patft/index.html For class project: search the patent database to determine if others have protected this concept Discuss your findings

OR, if you can’t do the above, 6. Study the likelihood and Impact of First- and/or Second-mover Advantages Discuss if you can capture a first-mover advantage by 1) Being a technology leader (e.g., Microsoft), 2) Obtaining strategically valuable assets (e.g., favorable access to raw materials, favorable geographic locations, and/or valuable product/market positions), and/or 3) Creating customer switching costs? OR, if you can’t do the above, Discuss if you will suffer from a second-mover advantage? Second-mover advantages may occur where imitators can duplicate the first movers’ patents—research shows imitators can do this for 65% of the cost of the first-mover Example: IBM vs. Dell in personal computer retailing If cannot gain first- or second-mover advantage, discuss if that will hurt you? Is the window of opportunity open? Are customers buying? Are competitors making money?

Documents to be Turned in Relative to the Product/Service Feasibility Analysis Study In the appendices, include The concept statement that the team constructed The concept test illustration that the team constructed Cover letters and surveys used to collect the product/ service feasibility study data Tabulate the results of the data that were collected via surveys Be sure to use an effective and clear table format to illustrate results See examples on my website