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Driving Top Line Growth
WCBF ConferenceSeptember 8, 2005
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2All materials and information are the property of Breakthrough Marketing Technology, LLC Copyright 2005. No reprinting or use without express permission.
Who We Are Breakthrough Marketing Technology is a
business consultancy focused on business growth We provide advice, training and coaching Our approach is
Strategic Seamless Customized
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3All materials and information are the property of Breakthrough Marketing Technology, LLC Copyright 2005. No reprinting or use without express permission.
Breakthrough Marketing Technology & Six Sigma
Developed and led Six Sigma training at AlliedSignal under Larry Bossidy Growth Green Belt -Addressed failure modes in
the growth process by improving marketing execution
Marketing for Black Belts Executed Six Sigma marketing projects
Led first business to be awarded Growth Green Belt
Winner of Specialty Chemicals business unit Quest for Excellence Six Sigma competition
Led Six Sigma marketing research and training in the U.S. and AsiaBreakthrough Has Extensive Experience with Breakthrough Has Extensive Experience with
Marketing and Six SigmaMarketing and Six Sigma
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Outline Strategic marketing and growth New product development Market validation foundation Voice of the customer and market research Market research to generate your demand
curve Segmentation based on valued benefits Agency briefings
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What Is Strategic Marketing? The development, design, and coordination of the
delivery of the entire offering (value proposition) to the targeted market
The task of creating, promoting, and delivering goods and services to consumers and businesses
Anticipating and meeting customer needs The process of planning and executing the
conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals
Marketing Leads Go-to-market Activities to Marketing Leads Go-to-market Activities to Drive Top Line GrowthDrive Top Line Growth
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Go-to-market with New Products – New Markets
ProductsProducts
Mar
kets
Mar
kets
Exist
ing
New
Existing New
TargetedTargetedMarketingMarketing
NewNewProductProduct
DevelopmentDevelopment
New New BusinessBusiness
DevelopmentDevelopment
New New MarketMarket
DevelopmentDevelopment
TargetedMarketingProcess
GrowthProcess
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The New Product Development Process
ConceptConcept DevelopmentDevelopment
MarketMarket ValidationValidation
BusinessBusiness CaseCase
GenerationGeneration
CommercialCommercial LaunchLaunch
MeasureMeasure andand
ControlControl
CControlontrolIImprovemproveAAnalysisnalysisMMeasureeasureDDefineefine
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Why Market Validation Number one cause of New Product
Development failures Brings Voice of the Customer into the project
at the beginning Early sense of business viability More effective use of technical resources Kills concepts that objectively need killing
Rigorous Approach to Market Validation Rigorous Approach to Market Validation Enables Fact-based DecisionsEnables Fact-based Decisions
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Market ValidationThe work of market validation is to: Determine market size, growth, and
attractiveness Identify possible segments and their relative
value for your concept Begin process of defining product requirements Determine possible competitive alternatives Identify any external forces that may accelerate
or dampen prospects; look for outliers Test for expansion potential to other geographical
markets Generate the elements of your QFD
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Market Validation
• Project scope• Competitive alternatives• Project plan & timing• Concepts to test
• Market opportunity• Segments to target• Value chain• CTCs• Value proposition hypothesis• Business model alternatives
• Project go or defer decision• New project charter• Resourcing• Alternative business models
• Learnings• Recommendation basis• Sources of information• Project plan
• Develop initial value proposition• Build initial value chain• Generate interview guide• Conduct interviews• Collect market research
EstablishEstablish CharterCharter
Conduct Conduct Market Market
AssessmentAssessment Generate Generate
CTCsCTCs Measure Measure
and and ControlControl
EvaluateEvaluate LearningsLearnings
CControlontrolIInnovatennovateAAnalysisnalysisMMeasureeasureDDefineefine
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Market Back Approach to Growth
Engage the market to determine the concept’s viability
Understand how the value adding process (value chain) operates
Develop a value proposition to specifiers and end users
Obtain first estimate of the potential revenue opportunity
Determine what resources will be required to develop the opportunity for commercial sales and how to shorten the development cycle
Provide business management with facts from direct contact with the marketplace to decide which concepts merit moving forward with resourcing. Balance depth and speed in this disciplined approach using an organized set of activities.
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Research Approaches to Market Back Approach (VOC)
Subjective Questions - Open-ended questions and leading discussions directed at revealing specific understanding the range and scope of underlying practices, needs and wants
Analytical Surveys - Close-ended (multiple choice or ranking or ratings) on uses, values, and options
Experiments - Responses to proposed concepts which simulate buyer or customer behavior
Motivational or Inner Mind Probes - Open-ended questions, discussions and exercises designed to indirectly reveal underlying motivations
Voice of the Customer is an essential component of creating and delivering value with the growth process
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The Research Process
DefineDefine Research Research
and itsand itsElementsElements
DesignDesign thethe
StudyStudy
ExecuteExecute thethe
StudyStudy
AnalyzeAnalyze ResultsResults
andand ModelModel
ReportReport
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How Research is Done Ways to Conduct Interviews (Modality)
• Personal Interview Phone Surveys Mail Surveys Phone-Mail (Fax)-Phone Conference (Show) Intercepts On-Line (Panels)
Differences Applicable to Different Methods Different Completion Rates Varying Costs Varying Reliability Varying Workability (Foreign)
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Perceived Value Measurement Methods
Concept Testing Full Profile Conjoint Choice Analysis (Discrete Choice Modeling) Compositional Conjoint Profiling Rating Methods
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Measuring The Value of Product Features
Popular Conjoint Methods Complex, difficult, and fault sensitive Designed for consumer markets Based on trade-offs of hypothetical products
Compositional Conjoint Simple, short, easily executed, fault tolerant
method Ranking of features with price discounts For use with experienced buyers With well understood features and benefits
Conjoint methods focus on the relative value of features but give a poor estimate of total product value
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Example:Consumer Segmentation
•2 clear benefit segments emerge
•Timesavers•Protection seekers
•A third segment may exist, but there is not enough data to confirm it
•Loss of time is a stronger driver than battery damage
Average Values of Benefits by Segment
0%10%20%30%40%50%
Ave
rage
Val
ue
Mean Time Savings (56%) Protection (44%)
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VOC and Conjoint Analysis VOC is customer assessment (interviews, surveys, focus groups, etc.) in an effort to identify
customer needs and wants. Conjoint is a survey & analysis tool that allows the business to quantitatively understand
customer needs.
Growth, Share, and Lifecycle The growth/share analysis is one of the more traditional looks at a product’s market position.
The analysis typically takes the form of a 2X2 matrix.
Segmentation and Value Proposition Framework A framework used to rank the segments, develop value proposition for each segment, and
allocate resources
Value Mapping Value Mapping generates a graphical summary of the relationship between customers’ desired
product attributes, the competitive choice set, and the price the customers are willing to pay.
Competitor Analysis Data analysis technique used to compare competitors across the conjoint attributes and other
key criteria (i.e. new product development, price, sales force support, etc.)
Value Pricing Tools
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Example:What They Are Likely to Pay
Costs
Manual $13.20
Remote $18.00
Demand
90 Percentile $37.66
75 Percentile $42.54
Median $57.15
Average $59.20
Optimum Price Range at 90 % of Maximum Earnings
Maximum $60.00
Minimum $42.00
Likelihood of Purchase 70%
Acceptable
Earnings 90%
Demand for Remote Battery Brain at 70% Likelihood of Purchase
0.0%
20.0%
40.0%
60.0%
80.0%
100.0%
$0 $25 $50 $75 $100 $125 $150
Price
-20%
0%
20%
40%
60%
80%
100%
Smoothed DemandSmoothed EarningsRangeManual PurchasersRemote PurchasersEarnings
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Analysis Drives the Agency Briefing
SegmentationSegmentationBased on consumer Based on consumer value of benefitsvalue of benefits
PricingPricingBased on likelihood to Based on likelihood to purchase and purchase and earningsearnings
PositioningPositioning
Motivating MessageMotivating Message
Fact Based Briefings are Inputs to Effective Fact Based Briefings are Inputs to Effective MarcomMarcom
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Marketing to Drive Top Line Growth
The process of planning and executing the conception, pricing, promotion, and distribution of ideas, goods and services to create exchanges that satisfy individual and organizational goals
Marketing with Six Sigma Leads the Way by Marketing with Six Sigma Leads the Way by Interpreting VOC SignpostsInterpreting VOC Signposts