- [Instructor] Hello, and welcome to the lecture
on the first P of our marketing mix.
It stands for product.
So this is about a product,
and more broadly service to development.
How do you create an offer, a product that will create value
for customers and help you fulfill the mission
of the business or the organization?
Here's an overview of what we're gonna do.
We're gonna talk about innovation.
We're gonna talk about traits for success, for a product.
We're gonna talk about the MVP model
that does not stand for most valuable player,
but minimum viable product.
We're gonna talk about the product life cycle
and a model of adoption and the diffusion of innovation
and of new products.
Here's the homework that's associated with this week.
So, consider that the main product or service
that you will be offering.
And you can answer these questions.
First, I want you to think about the innovation
and how it fits with the position that you have identified.
Next, I want you to consider the MVP concept
and see how, and if it can be applied to your case.
I want you to list the characteristics of success
and sort of judge them.
Where do you rate strongly, and where maybe not so strongly
and what can you do to accentuate a strength
and shore up a weakness.
And then think about who will be the early adopters
and how can you bring more customers in over time?
So again, I think this homework will make more sense
once you see it in context.
So new products can be delivered in a few ways.
You can add new functionality to an old product
or a new product in an old line.
And one of the things I want you to think about,
is innovation.
And one way of thinking about innovation,
is how disruptive to consumption patterns is the product.
So I have here photos of a rotary phone, a stereo system,
a multi-component stereo system like I used to have
back in the day, and a desktop computer.
And thinking about how in many ways,
and probably in order from top to bottom,
these items in the photos are rather obsolete now.
You really don't see them a lot,
especially except as some sort of retro statement.
You really don't see a lot of rotary phones.
And in many ways, they've been replaced
by these three things that you see
in the bullet points here.
Cell phones have largely replaced rotary phones,
iPods, or actually cell phones have replaced this
and headphones or earbuds,
have largely replaced multi-component stereos.
And laptops have largely replaced desktops.
So you can think about the innovation
has been, how disruptive has it been?
Has it made products obsolete and has it really changed
how people consume things where they buy things?
So, one thing I was thinking about,
is how few people have landlines now.
They're becoming more and more rare.
I would say most folks who have a landline, for example,
my 80 something parents have a landline.
I don't, most young folks I know don't.
Few folks have a multi component stereo now.
I mean, almost folks stream it online.
You really don't buy music on a piece of plastic
as often anymore.
So these items have been really disruptive to the products
that they have replaced.
You can think of this as three types of innovation,
there's sort of a continuum rather than distinct categories,
but at the one end, you can think of it as continuous,
where there's only a minor modification.
So taking an existing product and offering in a new flavor,
a new color, a new package, new size, et cetera.
In the middle is what we think of as dynamically continuous,
which is there's a big change,
but it doesn't disrupt.
So a hybrid car is pretty different from a regular car.
A CD is a different product than a vinyl album,
but it's still a piece of plastic.
A hybrid car is still a car.
A cordless phone is still connected to a landline.
But then you can think about discontinuous,
which really is a fundamental change.
So, PCs personal computers have certainly changed our lives
in countless ways.
Streaming movies on the internet, social media.
There really wasn't anything before that.
MP3 files, have meant that we share
and listen to music electronically,
where rather than buying a piece of plastic,
cell phones mean that you don't have to be home,
that you can talk to people as well as all the other things
that phones do, text and taking pictures and videos
and all kinds of things like that.
Here are a number of links to websites,
which talk about how to innovate the nature of innovation,
how to do it, what to look for, why it's an advantage,
lots of questions like this.
So please have a look at these
before our in-class discussion.
Next, I'm going to walk you through the characteristics
of success, and I will go through each one
in the next few slides.
The first one is superior advantage.
That customers must perceive
that your product or service is better.
There must be something about you
that will make them change, that will make them try it,
that will make them keep buying it.
And think back to our customer value equation,
that in some way you must be offering perceived benefits.
There's something of value, something better
and or at a lower cost.
So might be the actual monetary cost they pay
as well as time convenience.
But, you really have to offer something that is superior
compared to what they're buying now.
Next, it should be compatible.
So, it should align well both with your business
and with the community.
So you can think about that your products
should align with your values
as well as it should be a good fit for the people
you're trying to sell them to.
In their attitudes, their norms or behaviors.
So a lot of what you say in your mission statement
might help inform whether this product is compatible,
so on the strength and weakness side of the SWOT analysis,
as well as the community.
So the opportunity and threat side, is it a good fit?
Does it put you into that top right quadrant
of the SWOT analysis of strengths greater than weaknesses
and opportunities greater than threats.
Next, is simplicity.
It should be fairly straightforward how to use it.
That it should be something that people can pick up and use.
The instruction should be pretty simple and straightforward
having only basic skills.
That the more that people can easily use it and consume it,
the greater the chance of success,
and the more sort of hurdles that exist toward the using it
makes it less likely to be successful.
Next, is observability.
And this goes back to the superior advantage.
That where the innovation is, why it's better,
why it's different, why it's improved,
should be really obvious.
It should be either observable or very easily communicated.
Next, is trial ability.
So you don't want something that's a huge risk.
That you can do things like free samples,
an introductory price, a smaller trial package size.
But, the more that the consumer
can kind of take your product for a test drive,
figuratively speaking, can try it out, try a sample,
a small size, the more that you make it easy
for them to try it at a low, you know, low costs to them.
Not a lot of effort, not a lot of money to try it
for the first time, that the more likely
it will be successful.
And last, last is low perceived risk.
So here you want to decrease the risk.
So, in things like warranties and guarantees,
that's ways that if they don't like it, they can return it.
So thinking back, it's sort of related to trial ability.
But in this case, it's what kind of assurance,
especially if they do make a fairly large
upfront investment, what can you do to assure them
that if they don't like it, that if it all goes wrong,
they can return it or, you know,
offering some sort of warranty or guarantee
that they can get their money back if things go wrong.
This is the end of part one.
Please go to part two.
Thank you.