verhaert innovation day 2011 – dany robberecht (verhaert) - product differentiation strategies
DESCRIPTION
Speaker of Verhaert at the 8th edition of our Innovation Day on October 21st 2011.TRANSCRIPT
INNOVATIONDAY 2011
CONFIDENTIAL
Dany Robberecht
Verhaert – Director Consulting [email protected]
Product differentiation strategies – the holy grail in product innovation
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commoditizationbecome uniqueexpectationsconclusion
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Differentiating a product or service means creating a product or service which is
perceived industry wide as being
unique. It results in brand loyalty and
lower sensitivity to price. I'm willing to pay extra for my …
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A successful differentiation is focusing on delivering (perceived) value add to users and on competitive advantage. In other
words the story telling component is
as essential as the distinctive benefit of your innovation. Eventually it
should lead to a strong experience.
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perfo
rman
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brand Abrand B
In the product economy we try to over class each other with ‘better’ features.
time© C. Christensen
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brand Abrand B
customer absorption level
perfo
rman
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time
The rules of the game change when willingness to pay ends because
products become good enough.
© C. Christensen
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brand Abrand B
customer absorption level
perfo
rman
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time
How to be perceived valuable? You seek recognition, strong story telling or distinctive benefits to satisfy
needs. The experience economy becomes the rule.
?
© C. Christensen
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An example …
In our product economy we
often tell bizarre stories. Stories that not engage our users, neither they improve our competitive position. Despite the efforts of a whole company they don’t deliver anything.
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If you manage it poorly, then this
is your destiny.
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But, we all love commodities. They offer economies of scale, thus accomplish efficiency in manufacturing as they target high volume markets. If
we only could maintain our
margins, YES!
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the other side of the coin
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CONFIDENTIAL
There are two strategy choices: do whateveryone else is doing, only better,cheaper or faster. Or do something differentand truly distinctive.
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It starts with being different
therefore you must think differently
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Let’s unveil the puzzle piecesand construct our puzzle.
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Canon’s professional L series – though used extensively by non-pros - is
recognized easy because of its
distinctive color. It doesn’t add functions, but connects users to the brand.
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Brompton folding bikes do not excel in weight, neither in usability, but
everybody knows it’s a
Brompton because of the iconicdesign.
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ALU modem
Materials, color, finishing, styling, modus
operandi provide foothold for iconic products. Recognition and
visibility combined with strong story telling are the foundation of iconic products. Users are willing to pay a
premium price as they create value.
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recognition
in-storewalkingmodels
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Often technology benefits are
difficult to explain to users. Dyson’s
bladeless fan promises a smooth airflow with no unpleasant buffeting because it has no blades. Users will buy it for another reason I suppose.
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user research often leads to better
insights of unmet needs. It provides
foothold for distinctive features. Companies can build a succesful
product strategy based upon these distinctive benefits, especially when they are visible and recognized easy.
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reduce
eliminate create
raise
attributesjuggling© Verhaert
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What are great functionalities? Those that
create experiences …Products having these abilities typically
show a low churn rate. Especially in mature markets it is essential to keep your customer base, as the market faces a low or even zero-growth.
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experience driven services
In 1991 the concept was launched as a pilot project. Today it foresees
athletes with custom made shoes. The concept includes scanners at the POS, a sales website and marketing collateral. At the back
end the manufacturing concept was rigorously changed as well as the product architecture and logistics.
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If creating superior products is not ambitious enough for your company then
you seek the blue ocean by creating a new market. You want to
discover how to tap into refusing non-consumers by addressing latent needs. However it is difficult to
reinvent the meaning of a product or service, this strategy is very rewarding.
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On-the-gohealth
1994
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Back in a minute
1961
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Streamand share
2008
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+
brand Abrand B
customer absorbtion level
perfo
rman
ce
time
How to be perceived valuable? You seek recognition, strong story telling or distinctive benefits to satisfy
needs. The experience economy becomes the rule.
?
© C. Christensen
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make goods
createcommodities
services
experiences
market pricing premium pricing
Chooseyourstrategy
© Verhaert
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Understandfocus and risks
© Verhaert
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+ competitiveadvantage
© Verhaert
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manage perceivedvalue
Create distinctive performances and attributes. Translate into iconic designs. Resulting in user experiences
and brand value.
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