new product marketing: market entry strategies....a new look at first movers and fast seconds!
TRANSCRIPT
Bryan Cassady Guest Professor, [email protected]
KU Leuven Master Class: New Product Marketing7/11 Market timing First vs Fast seconds
Market Entry strategiesLemmings…
A new look at first movers and fast seconds…
Bryan Cassady Guest Professor, [email protected]
About this courseIt is a sad fact that most new businesses, products and service fail. Some estimate the failure rate is as high as 90%. This course is about why products fail and what you can do to increase your odds of success.
This lecture is a part of series of 12 lectures. In my classes I use a lot of videos. If you’d like to see the presentations with videos, go to: http://www.fast-bridge.net/resources/new-product-marketing/
I hope in the pages that follow you will find new ideas and inspiration… If you’d like to download the whole class go to: http://www.slideshare.net/bryancassady2/2009-course-new-product-management-by-bryan-cassady
If you have ideas on ways to improve this course or would like help with your new products, I’d love to here from you…
Bryan Cassady [email protected] +32-475-860-757
Bryan Cassady Guest Professor, [email protected]
A less-than-optimal "configuration" of product or service attributes and benefits is selected.
Lack of a strong sustainable position in the market
Marketers fall in love with a product no one else loves
The marketing plan for the new product or service is not well implemented in the real world.
Marketers assess the marketing climate inadequately.
The plan is too complicated
A failure to ask the right questions and a belief that everything is a big idea
No Support to get things done
A questionable pricing strategy is implemented. A weak positioning strategy is used.
Cannibalization underestimatedThe advertising campaign generates an insufficient level of new product/new service awareness.
Over-optimism about the marketing plan leads to a forecast that cannot be sustained in the real world.
Too focused on the internal game not enough on the market
The Lemming effect
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
% passers bythat joined
1 5%
5 20%
15 45%
30 80%
Social Proof: the tendency to assume that if a lot of people are doing something or believing something there must be a good reason why
Bryan Cassady Guest Professor, [email protected]
One bad decision, can lead to lots of bad decisions…
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Revenues Profit Value
1995 0.00 0.00 0.15
1997 0.01 0.00 100
1998 150 -30 250
April 8, 1999 (morning) 108 -56 1045
April 8, 1999 (mid day) 108 -56 3316
April 8,1999 (close) 108 -56 2498
Aug – 99 140 -124 681
Nov – 99 240 -124 681
Jun – 00 ??? ??? 2
Bryan Cassady Guest Professor, [email protected]
A small idea
Shameless copycats
Group Think
Gotta be first
Bryan Cassady Guest Professor, [email protected]
The great Tulip crisis
The US plank road bonanza
Bowling in the 60s
Historical Examples
Social networking and blogs ?
The US Dollar ?
Today
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Source of the technology change
Advantage in technological development activity
Advantage in skills
The diffusion rate of technological information
Consumer involvement in the product
Ability to define competitive rules
Reputation advantage
Ability to preempt and make it stick
Switching costs
Position on the learning curve
Superior access to channels and to inputs
Ability to define industry standard
A higher share of the consumers mind
Non-proprietary pioneering costs
Demand & technology uncertainty
Threat of obsolescence and/or imitation
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
2 lab tests over time
Bryan Cassady Guest Professor, [email protected]
Repeated Exposure to Pioneer
0.6
0.5
0.4
0.3
0.2
0.1
Pioneer
2nd Entrance
3nd Entrance
Session 3Session 2
Probability of choice
Bryan Cassady Guest Professor, [email protected]
Repeated Exposure to Pioneer
Probability of choice
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Session 2 Session 3
Pioneer
2nd Entrance
3nd Entrance
Recall of UniqueFeatures
Bryan Cassady Guest Professor, [email protected]
Repeated Exposure to Pioneer
Probability of choice
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1.0
Session 2 Session 3
Pioneer
2nd Entrance
3nd Entrance
Recall of SharedFeatures
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
2 lab tests over time
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Before any change can occur. We need to conceptualize change Hypotheses are the concepts of change.Note: self-inflicted search biases “I’ll see it when I believe it’
1
Bryan Cassady Guest Professor, [email protected]
2
Before learning can occur. Evidence needs to be received(1) Familiarity influences what is seen(2) Law of small numbers… I have enough info(3) Sequential vs. side by side learning (Framing issues)
1
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
2
Information received needs to be encodedPrior knowledge, Expectations Selection of evidence & meaning(s) attached Bottom-up : Data driven (e.g. Tasting) or Top-down concept driven (e.g. how a brand name influences taste)Consumers likely to see what they expect to seeMight not be motivated to accommodate discrepant evidence Reinterpretation so it fits, or explain it away as an exception
1 3
Bryan Cassady Guest Professor, [email protected]
2
Integration = new beliefsCognitive conservatism: A tendency to accept confirmation and reject disconfirmationMixed messages polarized views
1 3 4
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
How motivated are consumers to learn?
What do consumers already know?
How much can experience teach?
Most consumer products hereHence, the logic of first movers…
Bryan Cassady Guest Professor, [email protected]
How motivated are consumers to learn?
What do consumers already know?
How much can experience teach?
Experience can be ManagedHard to manage
Product dependent
Bryan Cassady Guest Professor, [email protected]
How motivated are consumers to learn?
What do consumers already know?
How much can experience teach?
Block exposure to evidenceShow risks of experimentationKelloggs: Value of the brand you knowIt’s as good as Xerox
Bryan Cassady Guest Professor, [email protected]
How motivated are consumers to learn?
What do consumers already know?
How much can experience teach?
Explain the Experience: Heinz Anticipation, Thomas muffins: nooks taste betterReinforce the agenda: Budweiser beachwood aged, Lays: bet you can’t eat just one
Ryder: your brother in lay, pay too much or Ryder (Uhaul left off the list)
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
How motivated are consumers to learn?
What do consumers already know?
How much can experience teach?
Virtually any comparison with top dog willBuild credibility and imageEg. Pepsi Challenge: let your taste decide
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
How motivated are consumers to learn?
What do consumers already know?
How much can experience teach?
Disrupt the Agenda / change the rulesThe beer for good friends: Weekends are for Michelob
Build Trial
Bryan Cassady Guest Professor, [email protected]
“Nobody ever gotfired for buying IBM”
Reinforcing the Agenda
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Oral: Questions on work, no written Qs on class
No difference
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
INNOVATOR FOLLOWER WINNE
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Consumers
Established Market (USA)
New Market (Belgium)
Product Features Focused Selection Wide Selection
Message A new way to save $ A better way to shop
Note: A few more details would be nice.....
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Your Class ID Number :
Strongly Disagree
Disagree Somewhat
Neither Disagree nor
Agree
Agree Somewhat
Strongly Agree
Goals: We have clear performance objectives
1 2 3 4 5
Climate: The atmosphere is informal & relaxed.
1 2 3 4 5
Roles: Everyone is clear about what is expected of them on the team.
1 2 3 4 5
Participation: Everyone participates in team discussions and decisions.
1 2 3 4 5
Communication: Members feel free to express themselves all on
1 2 3 4 5
Meetings: Team meetings are well planned and carried out.
1 2 3 4 5
Conflict: Disagreements among team members are resolved quickly & effectively.
1 2 3 4 5
Score:
Bryan Cassady Guest Professor, [email protected]
The rest of today’s class
Working together in groups
Bryan Cassady Guest Professor, [email protected]
“Coming together is a beginning.
Keeping together is progress.
Working together is success.”- Henry Ford
Bryan Cassady Guest Professor, [email protected]
“I will pay more for the ability to deal with people than any other ability under the sun.”
– John D. Rockefeller
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]
Bryan Cassady Guest Professor, [email protected]