New Product Marketing: A bakers dozen (12 +1)...Strategies to win in today’s competitive markets!

Bryan Cassady Guest Professor, Bryan@fast-bridge.com

KU Leuven Master Class: New Product Marketing8/11 A new look at strategy

A bakers dozen (12 +1)

Strategies to win in today’s competitive markets.

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 bryan@fast-bridge.com +32-475-860-757

Suggested Reading : The Pyramid Principle

A LETTER FROM A FRIEND (1/3)

Dear Shirley,

Remember last Saturday afternoon when I was playing in the park with my boyfriend and you came over, and he told me that when my back was turned, you kissed him?

And also, on Sunday when you came to my house and my Mom made you a tuna fish salad for lunch and you said: “Yech! That’s the worst salad I ever ate!”?

And yesterday, when my cat brushed against your leg, you kicked her and threatened to sic your “Monster” on her?

Well, for all of these reasons, I hate you, and I no longerwant to be your friend.

Source: [Zel99], http://education.dbai.tuwien.ac.at/wie/WS05/

Dear Shirley,

I HATE you. Here are my reasons:

1. You stole my boyfriend.

2. You insulted my mother.

3. You scared my cat.

Main statement or“Governing thought”

Reasons supporting the governing thought

Source: [Zel99], http://education.dbai.tuwien.ac.at/wie/WS05/

Independent group of answers (logical grouping)

Chain Of Statements (logical arguments)

Make it easy, go inductive…

*Notice the distinction between early learning and late learning. Early learning establishes the leader, late learning is their downfall

Strategy Systems Passion ExecutionPorter 50% 20 15 15Drucker 35% 30 15 20Bennis 25% 20 30 25Peters 15% 20 35 30Welch 10% 90%

Mid-Sized Chemical Company

Differentiation – Distinguish products and services in order to charge a premium price

Focus – Follow one of the other strategies in a narrow market

Cost Leadership – Offer substitutable products at the lowest price

Michael Porter, “What is Strategy?” (1996)“[D]eveloping a strategy in a newly emerging industry or in a business undergoing revolutionary technological change is a daunting proposition.”

What makes us think we can forecast the future in a meaningful way? Getting future predictions right doesn’t happen often The process is over-simplified and static Virtually no proof that it works

Frederick Winslow Taylor Henry Mintzberg

“Chivalry is dead. The new code of conduct is an active strategy of disrupting the status quo to create an unsustainable series of competitive advantages. This is not an age of defensive castles, moats and armor. It is rather an age of cunning, speed and surprise. It may be hard for some to hang up the chain mail of ‘sustainable advantage’ after so many battles. But hypercompetition, a state in which sustainable advantages are no longer possible, is now the only level of competition.”

Chivalry and 5 years plans may be dead, but focusing is not.

Superior value and product quality are no longer a competitive

advantage

They are the cost of market entry…

your ticket to play in the game …

Everything = Nothing

Best Product Oriented

Build a state-of-the-art product which sells at a

premium.

Best Total Cost Oriented

Achieve the best and lowest cost

combination of product features and

Best Service Oriented

Solve the customer’s big picture problems and develop a close

relationship

Product(What a

company sells)

Services (How a company does business)

Best product

BestTotal cost

BestService

Operational Excellence Customer Intimacy

Product Leadership

Invention Product Devel

Speed to market

Product Leadership

Customer Intimacy

Operational Excellence

Solution Devel.Cust. ServiceRelationships

Operational Processes

Supply chain management Operations

Meet Basic requirements

Strategic focus

Customer ManagementInnovation

Some Examples…

Wal-Mart Charles Schwab Southwest Airlines FedEx Taco Bell AT & T McDonalds Dell

Examples Processes streamlined and

standardized Few decisions will be left to

front-line employees Strong management systems Reward efficiency and abhor

waste.

Characteristics:

Microsoft Sony Apple Nike Reebok Swatch MTV Walt Disney

Examples Invention, product

development = glamour departments

A project focus high tolerance for

experimentation out-of-the-box type thinking.

Characteristics:

More expensive, slower, closed systems… but they look and feel cool

IBM Home Depot Nordstroms Cable & Wireless Johnson Controls Roadways Cott Corporation

Examples An obsession with educating

the customer solutions focus delegation to the employees

who meet face to face with customers.

Reward customer service Culture of going the extra mile

Characteristics:

More details in the lecture notes… or the articles

You gotta deliver real value to consumers

Is there something that makes you

specialNormal = nothing !

It's about being the third place: home, work, and Starbucks--the place in between,"

Are you offering, value, innovation

or service(you need to

choose ! )

Own a piece of the consumer’s

Create uncontested market space and make the competition

irrelevant

Learn to make tough decisions to

your strategy

What does the “M” stand for ?Over a 9 year period sales grew by 35 billion. How much in the M.

Zero, Nada, Nix. Today, they don’t even make PCs

Before they sold the PC division, salespeople were told they need to sell computers from other companies

Think about what your competition does best, and use

it against them

Focus your investments,

focus your message

“What we sell is the ability for a 43-year-old accountant to dress in black leather, ride through small towns and have people be afraid of him.”

Harley exec, quoted in Results-Based Leadership

520 fold return on investment (not bad)

you’ll never lead..

Ifcan’t ignore them

“Aiming to beat the competition has the opposite effect to the one intended. It keeps companies focused on the competition.

When asked to build competitive advantage, managers typically rate themselves against competitors, assess what they do and try to do it better.”

W. Chan Kim & René Mauborgne, “Think for Yourself—Stop copying a Rival”/FT/08.03

“How do dominant companies lose their position? Two-thirds of the time, they pick the wrong competitor to

worry about.”- Don Listwin, CEO,Openwave Systems/WSJ3

Get your competition to

invest where youwant them to

Induce your competitors not to invest in those products and services you expect to invest the most… that is the fundamental rule of strategy

Bruce Henderson Fonder of BCG

Of course the smart car has low emissionsGetting consumer focused on emissions gets other

companies to work harder to catch up

Make sure the strategic intent is

clear at every level

“I didn’t have a ‘mission statement’ at Burger King. I had a dream. Very simple. It was something like, ‘Burger King is 250,000 people, every one of whom gives a shit.’ Every one. Accounting. Systems. Not just the drive through. Everyone is ‘in the brand.’ That’s what we’re talking about, nothing less.”

— Barry Gibbons

Create a standard supported by the market and you

can be rich

The total value of a product/service that possesses a network effect is roughly proportional to the square of the number of

customers already using that product/service.

As the network grows, value grows geometrically

And now for the bakers bonus…

A little less talk and a little more action

“We have a ‘strategic plan.’ It’s called doing things.”— Herb Kelleher

“You miss 100 percent of the shots you never take.”— Wayne Gretzky

Source: Hugh MacLeod/tompeters.com/NPR

1. Every morning, write a list of the things that need to be done that day.

2. Do them.

New Product Marketing: A bakers dozen (12 +1)...Strategies to win in today’s competitive markets!

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