2. Open Floor  Margaret Mellinger  OSU Business Librarian  Overview of Tools Available to You  Group Exercise on Getting Your Information Needed

3. Information Exercise  Think of Your Product (Service) Concept/Idea…  What Information Do You Need?  Where in the OSU Library System Can You Get It?  How can You Use the OSU Library System to Leverage Your Information Requests?

4. PART TWO CONCEPT GENERATION McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved.

5. Concept Generation Figure II.1

6. CHAPTER 4 PREPARATION AND ALTERNATIVES McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved.

7. Genius Thinking Strategies Geniuses find many different ways to look at a problem. Einstein, for example, and da Vinci, were well known for looking at their problems from many different perspectives. Geniuses make their thoughts visible. Da Vinci’s famous sketches, and Galileo’s diagrams of the planets, allowed them to display information visibly rather than relying strictly on mathematical analysis. Geniuses produce. Thomas Edison had a quota of one invention every ten days. Mozart was among the most prolific composers over his short life. Geniuses make novel combinations. Einstein found the relationship between energy, mass, and the speed of light (the equation E=mc²). Geniuses force relationships. They can make connections where others cannot. Kekule dreamed of a snake biting its tail, immediately suggesting to him that the shape of the molecule he was studying (benzene) was circular. Geniuses think in opposites. This will often suggest a new point of view. Physicist Neils Bohr conceived of light as being both a wave and a particle. Geniuses think metaphorically. Bell thought of a membrane moving steel, and its similarity to the construction of the ear; this led to the development of the telephone earpiece. Geniuses prepare themselves for chance. Fleming was not the first to see mold forming on a culture, but was the first to investigate the mold, which eventually led to the discovery of penicillin. Source: Michael Michalko, “Thinking Like a Genius,” The Futurist, May 1998, pp. 21-25. Figure 4.1

8. “Killer Phrases:” Roadblocks to Creativity It simply won’t work. Are you sure of that? You can’t be serious. It’s against our policy. Let’s shelve it for the time being. That won’t work in our market. Let’s think about that some more. I agree, but… We’ve done it the other way for some time. Where are you going to get the money for that? We just can’t do that. Who thought of that? It’s probably too big for us. I believe we tried that once before. Figure 4.3

9. Historic Roadblocks to Creativity  “I think there is a world market for maybe five computers.” Thomas Watson, Chair, IBM, 1943.  “Computers in the future may weigh no more than 1.5 tons.” Popular Mechanics, 1949.  “I can assure you that data processing is a fad that won’t last out the year.” Business books editor, Prentice- Hall, 1957.  “So we went to Atari and said,...’We’ll give it to you. We just want to do it. Pay our salary, we’ll come work for you.’ And they said no. So then we went to HP, and they said ‘We don’t need you, you haven’t got through college yet.’” Steve Jobs, co-founder, Apple Computers.  “640K of RAM ought to be enough for anybody.” Bill Gates, Microsoft, 1981.

10. Historic Roadblocks to Creativity  “Who the hell wants to hear actors talk?” H.M. Warner, Warner Bros., 1927.  “Stocks have reached what look to be a permanently high plateau.” I. Fisher, Prof. of Economics, Yale, 1929.  “We don’t like their sound, and guitar music is on the way out.” Dick Rowe, Decca Records executive, rejecting the Beatles’ demo tape, 1962.  “This ‘telephone’ has too many shortcomings to be seriously considered as a means of communication [and] is inherently of no value to us.” Western Union, 1876.  “Heavier-than’air flying machines are impossible.” Lord Kelvin, President, Royal Society, 1895.  “Everything that can be invented has been invented.” C. H. Duell, Commissioner, U.S. Office of Patents, 1899.

11. Barriers to Firm Creativity Cross-functional diversity: Diversity leads to more creative stimulation but also to problem solving difficulties. Allegiance to functional areas: Team members need to have a stake in the team’s success, or won’t be loyal to the team. Social cohesion: If interpersonal ties among team members are too strong, candid debate may not occur, resulting in less innovative ideas. Role of top management: Management should encourage the teams to be adventurous, otherwise only incremental changes will occur. Figure 4.4

12. Required Inputs to the Creation Process Form (the physical thing created, or, for a service, the set of steps by which the service will be created) Technology (the source by which the form is to be attained) Benefit/Need (benefit to the customer for which the customer sees a need or desire) Technology permits us to develop a form that provides the benefit.

13. Some Patterns in Concept Generation Customer need  firm develops technology  produces form Firm develops technology  finds match to need in a customer segment  produces form Firm envisions form  develops technology to product form  tests with customer to see what benefits are delivered Note: the innovation process can start with any of the three inputs.

14. What is a Product Concept? A product concept is a verbal or prototype statement of what is going to be changed and how the customer stands to gain or lose. Rule: You need at least two of the three inputs to have a feasible new product concept, and all three to have a new product.

15. Why Do You Need a Product Concept and Not Just an Idea? Needed to judge whether it is worthy of development Potential customers do not have enough information to judge the worthiness of an idea: the product concept gives them the required information. Ex.: Would a taxi operator like cars with a 10 cents per mile operating cost? (need) Not if it used Caterpillar tractor technology instead of wheels! (need plus technology)

16. New Product Concepts and the New Product NeedForm Technology New Product “C”= Concepts C C C Figure 4.4

17. Need-Form-Technology Example Break into Small Group… Identify two examples of a product/service Need Form Technology

18. The Designer Decaf Example Benefit: “Consumers want decaffeinated espresso that tastes identical to regular.” Form: “We should make a darker, thicker, Turkish-coffee-like espresso.” Technology: “There’s a new chemical extraction process that isolates and separates chemicals from foods; maybe we can use that for decaffeinating espresso coffee.” Why would each of these taken individually not be a product concept?

19. What a Concept Is and Is Not “Learning needs of computer users can be met by using online systems to let them see training videos on the leading software packages.” (good concept; need and technology clear) “A new way to solve the in-home training/educational needs of PC users.” (need only; actually more like a wish) “Let’s develop a new line of instructional videos.” (technology only, lacking market need and form)

20. Methods for Generating Product Concepts  Two Broad Categories of Methods: Gathering Ready-Made Product Concepts Using a Managed Process Run by the New Products Team

21. Best Sources of Ready-Made New Product Concepts New Products Employees Technical: R&D, engineering, design Marketing and manufacturing End Users Lead Users Resellers, Suppliers, Vendors Competitors The Invention Industry (investors, etc.) Idea exploration firms and consulting engineers Miscellaneous (continued) Figure 4.6

22. Best Sources of Ready-Made New Product Concepts (continued) Miscellaneous Categories Consultants Advertising agencies Marketing research firms Retired product specialists Industrial designers Other manufacturers Universities Research laboratories Governments Printed sources International Internet Figure 4.6

23. Lead Users An important source of new product ideas. Customers associated with a significant current trend. They have the best understanding of the problems faced, and can gain from solutions to these problems. In many cases, have already begun to solve their own problems, or can work with product developers to anticipate the next problem in the future.

24. BA 590

26. CHAPTER 5 PROBLEM-BASED IDEATION: FINDING AND SOLVING CUSTOMERS’ PROBLEMS CHAPTER 5 PROBLEM-BASED IDEATION: FINDING AND SOLVING CUSTOMERS’ PROBLEMS McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved.

27. Problem-Based Concept Generation Figure 5.1

28. Problem Analysis: General Procedure 1. Determine product or activity category for study. 2. Identify heavy users. 3. Gather set of problems associated with product category. Avoid “omniscient proximity” -- rate importance of benefits and levels of satisfaction. 4. Sort and rank the problems according to severity or importance.

29. Problem Analysis Applied to the Cell Phone Keeping the unit clean. Breaks when I drop it. Battery doesn’t stay charged long enough. Finding it in dark. Battery dies in mid- conversation. Who “out there” hears me? Dropped calls. Looking up numbers. Voice fades in and out. Hard to hold. Health risks? Can’t cradle between ear and shoulder. Antenna breaks off. Flip cover breaks off. Disruptive instrument. Can’t see facial/body language. Rings too loud/too soft. Wrong numbers. Fear of what ringing might be for. Figure 5.2

30. The Bothersomeness Technique of Scoring Problems Figure 5.3

31. Problem Analysis: Sources and Methodologies Experts Published Sources Contacts with Your Business Customers or Consumers Interviewing Focus groups Observation of product in use Role playing

32. Typical Questions for Problem Analysis Focus Groups What is the real problem here – what if the product category did not exist? What are current attitudes and behaviors of focus group members toward the product category? What product attributes and benefits do the focus group members want? What are their dissatisfactions, problems, and unfilled needs? What changes occurring in their lifestyles are relevant to the product category?

33. Observation and Role Playing in Problem Analysis Carmakers send their designers out to parking lots to watch people and how they interact with their cars (Ford called this “gorilla research”). Honda got insights as to how large the passenger compartments of their SUVs should be by observing U.S. families. Bausch and Lomb generated ideas on making contact lenses more comfortable by getting pairs of executives to act out skits in which they played the eyeball and the contact lens.

34. Scenario Analysis “Extending” vs. “leaping” Using seed trends for an “extend“ scenario Techniques: Follow “trend people”/”trend areas” “Hot products” Prediction of technological changeover Cross-impact analysis

35. Relevance Tree Form of Dynamic Leap Scenario Figure 5.4

36. Wild Card Events and Their Consequences No-Carbon Policy: Global warming may cause governments to put high taxes on fossil fuels, shifting demand to alternative sources of energy. This changes the allocation of R&D investment toward alternative energy, possibly causes new “energy-rich” nations to emerge, and ultimately may lead to a cleaner environment for everyone. Altruism Outbreak: This is the “random acts of kindness” movement – solve social problems rather than leaving it up to the government. Schools and other institutions will revive due to community actions, and perhaps inner cities would be revitalized. Cold Fusion: If a developing country perfects free energy, it becomes prosperous overnight. It gains further advantages by becoming an energy exporter. Figure 5.6

37. Solving the Problem Group Creativity Methods/Brainstorming Principles of Brainstorming: Deferral of Judgment Quantity Breeds Quality Rules for a Brainstorming Session: No criticism allowed. Freewheeling -- the wilder the better. Nothing should slow the session down. Combination and improvement of ideas.

38. Brainstorming Techniques Brainstorming circle Reverse brainstorming Tear-down Phillips 66 groups (buzz groups) Delphi method

39. Electronic Brainstorming  Supported by GSS (group support systems) software.  Overcomes many drawbacks of brainstorming (only one can talk at a time, fear of contributing, “social loafing”).  Participants sit at networked terminals.  Contributions are projected on screen, and also recorded (so no errors are made in transcription).  Can be done over multiple sites via computer linkups or videoconferencing.  Can handle larger size groups (into the hundreds).

41. CHAPTER 6 ANALYTICAL ATTRIBUTE APPROACHES: INTRODUCTION AND PERCEPTUAL MAPPING McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved.

42. What are Analytical Attribute Techniques? Basic idea: products are made up of attributes -- a future product change must involve one or more of these attributes. Three types of attributes: features, functions, benefits. Theoretical sequence: feature permits a function which provides a benefit.

43. Gap Analysis Determinant gap map (produced from managerial input/judgment on products) AR perceptual gap map (based on attribute ratings by customers) OS perceptual map (based on overall similarities ratings by customers)

44. A Determinant Gap Map Figure 6.2

45. 1 2 3.... Options.... X Ideal 12.......15 Attributes Respondents 1 2.. 700. A Data Cube Figure 6.3

46. Rate each brand you are familiar with on each of the following: Disagree Agree 1. Attractive design 1..2..3..4..5 2. Stylish 1..2..3..4..5 3. Comfortable to wear 1..2..3..4..5 4. Fashionable 1..2..3..4..5 5. I feel good when I wear it 1..2..3..4..5 6. Is ideal for swimming 1..2..3..4..5 7. Looks like a designer label 1..2..3..4..5 8. Easy to swim in 1..2..3..4..5 9. In style 1..2..3..4..5 10. Great appearance 1..2..3..4..5 11. Comfortable to swim in 1..2..3..4..5 12. This is a desirable label 1..2..3..4..5 13. Gives me the look I like 1..2..3..4..5 14. I like the colors it comes in 1..2..3..4..5 15. Is functional for swimming 1..2..3..4..5 Obtaining Customer Perceptions Figure 6.4

47. Snake Plot of Perceptions (Three Brands) Aqualine Islands Sunflare Attributes Ratings Figure 6.5

48. Data Reduction Using Multivariate Analysis Factor Analysis Reduces the original number of attributes to a smaller number of factors, each containing a set of attributes that “hang together” Cluster Analysis Reduces the original number of respondents to a smaller number of clusters based on their benefits sought, as revealed by their “ideal brand”

49. No. of Factors Percent Variance Explained The Scree Selecting the Number of Factors Figure 6.6

50. Factor Loading Matrix Figure 6.7

51. Sample calculation of factor scores: From the snake plot, the mean ratings of Aqualine on Attributes 1 through 15 are 2.15, 2.40, 3.48, …, 3.77. Multiply each of these mean ratings by the corresponding coefficient in the factor score coefficient matrix to get Aqualine’s factor scores. For example, on Factor 1, Aqualine’s score is (2.15 x 0.145) + (2.40 x 0.146) + (3.48 x -0.018) + … + (3.77 x -0.019) = 2.48. Similarly, its score on Factor 2 can be calculated as 4.36. All other brands’ factor scores are calculated the same way. Factor Scores Matrix Figure 6.8

52. Aqualin e Islands Splash Molokai Sunflare Gap 1 Gap 2 Fashion Comfort The AR Perceptual Map Figure 6.9

53. Dissimilarity Matrix Figure 6.10

54. Aqualine Islands Splash Molokai Sunflare Comfort Fashion The OS Perceptual Map Figure 6.11

55. Source: Adapted from Robert J. Dolan, Managing the New Product Development Process: Cases and Notes (Reading, MA: Addison-Wesley, 1993), p. 102. Comparing AR and OS Methods Figure 6.12

56. Failures of Gap Analysis Input comes from questions on how brands differ (nuances ignored) Brands considered as sets of attributes; totalities, interrelationships overlooked; also creations requiring a conceptual leap Analysis and mapping may be history by the time data are gathered and analyzed Acceptance of findings by persons turned off by mathematical calculations?

57. E. & J. Gallo Example Attributes Perceptual Maps MDS Graph

59. CHAPTER 7 ANALYTICAL ATTRIBUTE APPROACHES: TRADE-OFF ANALYSIS AND QUALITATIVE TECHNIQUES McGraw-Hill/Irwin Copyright ©2006 The McGraw-Hill Companies, Inc. All right reserved.

60. Trade-Off (Conjoint) Analysis Put the determinant attributes together in combinations or sets. Respondents rank these sets in order of preference. Conjoint analysis finds the optimal levels of each attribute.

61. Conjoint Analysis Input: Salsa Example Figure 7.2

62. Regular Thick Ex-Thick UTILITY 2 1 0 -2 Mild Medium-Hot Ex-HotRed Green Thickness Spiciness Color 0.161 0.913 -1.074 1.6670.105-1.774 -0.161 0.161 Conjoint Analysis: Graphical Output Figure 7.3

63. Conjoint Analysis: Relative Importance of Attributes 0 20 40 60 80 100 % Spiciness Thickness Color 59.8% 34.6% 5.6% Figure 7.3 (cont’d.)

64. Some Qualitative Attribute Analysis Techniques Dimensional Analysis Checklists Relationships Analysis There are many others.

65. A Dimensional Attribute List Weight Rust resistance Length Color Water resistance Materials Style Durability Shock resistance Heat tolerance Explosiveness Flammability Aroma Translucence Buoyancy Hangability Rechargeability Flexibility Malleability Compressibility Figure 7.4

66. An Idea Stimulator Checklist for Industrial Products Can we change the physical/chemical properties of the material? Are each of the functions really necessary? Can we construct a new model of this? Can we change the form of power to make it work better? Can standard components be substituted? What if the order of the process were changed? How might it be made more compact? What if it were heat-treated/hardened/cured/plated? Who else could use this operation or its output? Has every step been computerized as much as possible? Figure 7.5

67. Templates for Creativity Attribute Dependency: Find a functional dependency between two attributes. Ex.: color of ink on coffee cup is sensitive to heat and can reveal message if coffee is too hot. Replacement: Remove a component and replace with one from another environment. Ex.: antenna is replaced by headphone cord on Walkman. Displacement: Remove a component and its function to change the product. Ex.: Removing floppy drives resulted in ultra-thin PCs. Component Control: Find a new connection between a component internal to the product and one external to the product. Ex.: Toothpastes with whiteners, suntan lotions with skin moisturizers. Figure 7.6 Source: Jacob Goldenberg and David Mazursky, Creativity in Product Innovation, Cambridge University Press, 2002.

68. Relationships Analysis Force combinations of dimensions (features, functions, and benefits) together. Techniques: Two-dimensional matrix Multidimensional (morphological) matrix Two-dimensional example: person/animal insured and event insured against. Household cleaning products example used six dimensions: Instrument used, ingredients used, objects cleaned, type of container, substances removed, texture or form of cleaner

69. Another Form of Dimensional Analysis  Two key dimensions for winning new product ideas:  Utility lever: How the product will affect the customer’s life (such as simplicity, fun/image, environmental friendliness, reduced risk, convenience, and productivity).  Buyer’s experience cycle: The stage when/where the product will affect the customer (purchase, delivery, use, supplements, maintenance, disposal). Figure 7.8 Source: W. C. Kim and R. Mauborgne, “Knowing a Winning Business Idea When You See One,” Harvard Business Review, Sept.-Oct. 2000, pp. 129-138.

70. Other Methods: Lateral Search Techniques Free association Stereotype activity Lateral thinking -- avoidance Creative stimuli words Studying “big winners” Use of the ridiculous Forced relationships

71. Lateral Thinking -- Avoidance  Keep an idea from dominating thinking as it always has in the past by asking avoiding questions. Ask “Is there another way of looking at this?” Ask “Why?” Focus on an aspect of the problem other than the “logical” one. List all possible alternatives to every aspect of the analysis. Break apart aspects (concepts) of the problem, or combine them to create even more concepts.

72. Some Creative Stimuli Words Guest stars Alphabet Truth Outer space Charity His and hers Style Nation Family Videotape Photography Testimonials Decorate Fantasy Hobbies Holidays Weather Calendar Push button Snob appeal

73. Use of the Ridiculous How can you join two wires together? Hold them with your teeth. Use chewing gum. Can you think of others? Do any of these ridiculous ideas suggest a not-so-ridiculous solution?

74. Review and Preview… Margaret Mellinger Lecture on Chapters 4-7 Midterm One Distribution Group Discussion

75. Midterm One Discussion Questions Comments