Marketing for Design Engineers:Key Concepts
Prof Mary Caravella, School of Business
1(c) 2015 Prof. Mary Caravella
What is marketing?
(c) 2015 Prof. Mary Caravella 2
What is marketing?
Creating, communicating and delivering VALUE to
customers, and managing relationships
with those customers to benefit the organization and
its stakeholders
(c) 2015 Prof. Mary Caravella 3
We develop customer value propositions to facilitate transactions
4(c) 2015 Prof. Mary Caravella
Transaction Costs
Price
Customer Value
BrandAssociations
ServiceExperiences
ProductAttributes
Benefit Claims Cost Claims
Customer Value Proposition: The specific bundles we propose to help customers solve a problem or achieve a goal, including the benefits we claim they will receive and the costs we ask them to pay
SearchLearningNegotiationDisposal
Two key questions we will focus on
1. Will what we design create value for customers?
2. How will customers find us?
(c) 2015 Prof. Mary Caravella 5
Eric Ries (2011) The Lean Startup, Crown Business
“People don’t want ¼” drill
bits, they want ¼”
holes”
(c) 2015 Prof. Mary Caravella 6
Two drills on Amazon…
(c) 2015 Prof. Mary Caravella 7
Black & Decker SSL20SB 20-Volt MAX Smart Select Lithium Ion Drill/Driver with extra battery
DEWALT DCD760KL 18-Volt 1/2-Inch Cordless Compact Lithium-Ion Drill/Driver Kit (includes second battery)
$118.05
$179.99
Two drills on Amazon…
(c) 2015 Prof. Mary Caravella 8
SmartSelect Clutch; Choose your project icon and drill automatically adjusts power and speed for optimal results
Gear indicator; 2-speeds indicates high or low setting
20-volt MAX Lithium batteries deliver extended run-time
High torque motor delivers 175-Inch-pounds
Ergonomic design for improved comfort and control
Lightweight design (4.0 lbs) minimizes user fatigue
Dual speed range 0-500/0-1700 rpm delivers optimal performance
LED worklight provides increased visibility in confined spaces
Compact track saw batteries (DC9181) are compatible with the existing system of DEWALT 18v power tools produced since 1996
Compact size (8.2-inch) allows users to fit into tight spaces;
$118.05 $179.99
Two different brands for two different targeted marketswith different problems to be solved or goals to be achieved
(c) 2015 Prof. Mary Caravella 9
Three DIMENSIONS of customer needs
(c) 2015 Prof. Mary Caravella 10
Functional Social Psychological
Why does he choose specific products/services?
(c) 2015 Prof. Mary Caravella 11
Because they help me• Do something
(Functional)
• Express myself with others (Social)
• Experience something enjoyable (Psychological)
Why does he choose specific products/services?
(c) 2015 Prof. Mary Caravella 12
I need…• A drill I can use for everything
• Assurance I am buying a reliable product
Why does he choose specific products/services?
(c) 2015 Prof. Mary Caravella 13
Because they help me• Improve my business (Functional)
• Market my business (Social)
• Avoid risks (Psychological)
(and I’m a person too!)
Why does he choose specific products/services?
(c) 2015 Prof. Mary Caravella 14
I need…• Tools I can use all day
• Rugged• Compatible
power supplies• Tools that show I’m a professional (and make me feel like one)
• Distinctive styling consistent with me
Your product is a tool to help customers create value for themselves. The more you understand customers and what they value the more likely you will create value
(c) 2015 Prof. Mary Caravella 15
Functional value: helps solve a problem or achieve a goal
Social value: connects with or distinguishes from others; expresses something about self to others
Psychological value: interesting, enjoyable, anxiety-reducing, satisfying
(c) 2015 Prof. Mary Caravella 16
(c) 2015 Prof. Mary Caravella 17
The sensors found in smart phones and Nintendo Wii controllers have migrated into Black & Decker’s cordless 4v MAX Gyro, billed as the world’s first motion-activated screwdriver. Tilt it right by a mere quarter of an inch and it screws clockwise to tighten; left, and it turns counterclockwise—all thanks to an internal gyroscope that senses wrist motions, which are measured by a small microprocessor that turns those movements into changes in the drill’s speed and direction
Now that we better understand WHY people choose what they do, we turn to HOW they do it
(c) 2015 Prof. Mary Caravella 18
HOW does he choose?
(c) 2015 Prof. Mary Caravella 19
LIFE SEARCH SOLVE
DMP(decision making
process)
How a customers moves through a
decision
Life gives rise to problems and goals
(c) 2015 Prof. Mary Caravella 20
• What’s going on in my life?
• What triggers this need?
LIFE SEARCH SOLVE
1.Creating Customer Value
We search for and evaluate solutions
(c) 2015 Prof. Mary Caravella 21
LIFE SEARCH SOLVE• What’s
going on in my life?
• What triggers this need?
• What do I already know about how to address this need?
• Who should I ask?• Where else
should I look?• What is important
to consider?
We choose, and evaluate our choice
(c) 2015 Prof. Mary Caravella 22
LIFE SEARCH SOLVE• What’s
going on in my life?
• What triggers this need?
• What do I already know about how to address this need?
• Who should I ask?• Where else
should I look?• What is important
to consider?
• How satisfied am I with the product/service?
• How satisfied was I with the purchase process?
• Do I get the support I need?
Need characteristics affect the DMP…
(c) 2015 Prof. Mary Caravella 23
LIFE SEARCH SOLVE
Need Importance
Drives effort to get started AND increases effort spent searching
Need FrequencyDecreases effort spent searching
1: Target Segment DescriptionImplications
So they affect your marketing challenge
(c) 2015 Prof. Mary Caravella 24
FREQUENCY
LO HI
IMPORTANCE
HI
Getting him started
(“I know why… how?”)
Switching to you(“Why are you
better than your competition?”)
LOGetting him
started(“Why bother?”)
Switching to you(“Why should I
change my routine?”)
We’re opening a deli, we’d like Sam to find us
(c) 2015 Prof. Mary Caravella
“I need lunch”
25
What is Sam’s “decision journey” (DMP)?
Sam likes to get outside of work during his 30 minute lunch break. He usually walks with a few of his coworkers to one of the nearby fast food places, but lately has been packing lunches– he’d like to eat healthier, but doesn’t want to make his friends change their lunch routine.
(c) 2015 Prof. Mary Caravella 26
Identify key decision criteria
(c) 2015 Prof. Mary Caravella 27
When Sam chooses a place to eat for lunch… What is non-negotiable? (“must
haves”) Can get in and out in 30 minutes
What other things does he consider? (potential “differentiators”) Healthy food Friends can get food they like too
Develop competitive decision matrix
(c) 2015 Prof. Mary Caravella 28
Criteria McDonalds Subway Our Healthy
Deli
Differentiators
Tasty, familiar food my friends like
Fries Subs Wraps None
Healthy food Small selection
2/3 selection
Full selection
Limited selection*
Less than 10 min away
Yes No Yes Yes
Must haves
Within 30 minutes
8 minutes away
15 minutes
away
8 minutes away
0 minutes away
Pricing < $8.00 /meal
$5.00/meal $5.00 core menu
$6.00 core menu
$4.00/meal + pre time
Very useful for determining and communicating competitive
situation and product development priorities
Decision criteria affect your POSITIONING How you distinguish yourself from competitors
in your customer’s mind
(c) 2015 Prof. Mary Caravella 29
Positioning Statement For (our target segment), our ( product/brand
) is (ONE important and most differentiating
decision criterion) among all (competing ways of solving targeted
problem) because ( single most important “supporting
evidence” )
Some direction..
1. Will what we design create value for customers? Work to understand all the dimensions of customer
value: functional, social and psychological, that customers evaluate against costs
Understand which product attributes are must haves and which are differentiators
Use brands to signal (and deliver) intangible benefits
2. How will customers find us? Work to understand the customer decision journey
(DMP) Understand what is most likely to trigger a search,
where they are most likely to search and what causes them to stop searching
Use brands to create mental shortcuts related to your positioning
(c) 2015 Prof. Mary Caravella 30
Reach out if I can help [email protected]
(c) 2015 Prof. Mary Caravella 31