I spent a day this week with a very large etail company (who happens to be a customer so I won't name them). I am really impressed with the initiatives that this company is working on. They clearly know their strengths and are focused on things like analytics as they understand its key to building competitive barriers to less pure clicks-and-bricks competitors. That being said, I think etail could dial up their game a bit on game-changing initiatives. Amazon with their Kindle (which I love by the way) is a clear difference. But how are they really game-changing how they sell things?
I really believe etail is under-leveraging their online nature. Etail partnering with more sophisticated PMs could engage customers with prototype concepts and develop a much deeper relationship in the process. For example, all the product pages that I have seen on the big etail sites are of actual products with "Buy" being the key focus. What about concept pages with "Definitely Would Buy" on them? Most etail customers are highly-involved folks who love products and would love to scout out for the latest and greatest "New Thing". Keep the discussions underneath the product, the price (perhaps even do some interesting pricing models on the page?) and everything else. If a concept gets adequate interest, make it and provide it perhaps at a discount to the initial folks who showed interest.
The trade-off for product companies would obviously be awareness by competition of new concepts (though this could be obviated through IP protection and speed-to-market). But the pros vis-a-vis in-depth concept testing with involved consumers could be strong. And you could build product pipelines at earlier on in the product lifecycle to assist with monetization.
For etail, concept selling could be incredibly potent. It leverges significant competitive advantages against brick-and-mortar, drives people to your site to see what's new and builds a sales pipeline BEFORE the product is on the market. Pretty darn cool if you ask me.
Showing posts with label scoping. Show all posts
Showing posts with label scoping. Show all posts
Saturday, June 13, 2009
Sunday, June 7, 2009
Differentiate or Neutralize?: A core first product decision
An early decision of utmost importance to a product development effort is whether a new product's strategic intent is differentiation or neutralization. Some people believe that neutralization is never a strong product objective. Let's for a second put aside that argument and look at why the decision is so important.
When you are making a decision on a portfolio level, or on a feature level, to neutralize, you are essentially looking to match competition on particular feature or specification. Key in this decision is to minimize your spend and to make certain that you don't overinvest. Potential overinvestment can result from development functions wanting to add value to the feature and take it beyond its requirements. To clarify this, I believe it helps to consistently and emphatically state the neutralizing strategic purpose of the product or feature.
Differentiation, on the other hand,oftentimes can yield a more troubling failure -- that of underinvestment in time and / or resources. Interestingly, when you see underinvestment in time and / or resources on your supposedly differentiated products, I believe it can also be because of the overinvestment in neutralizing products. Making people aware of these trade-offs is essential to driving strong focus from development functions and ensuring that the portfolio mix matches your business needs.
So, is there ever a need for neutralization? I would contend that few companies do not do some amount of neutralization. The iPod was not the first MP3 player in the market. And it did not differentiate on what would have been the obvious criteria: sound quality. Rather, Apple choice music distribution, user experience and design as its differentiating features.
Based on reading about Steve Jobs, it appears that Mr. Jobs has an incredible intuitive sense of what consumers care about but think their existing products already deliver, what consumers care about but don't think their existing products already deliver and what consumers just don't care about. I would suggest that Apple focuses its efforts on the things that consumers care about and don't think existing products deliver. This is usually centered upon making technology easier to deal with and addressing the softer challenges, while being "good enough" on the basics. Apple, in other words, has a crystal clear sense of not only when to differentiate but also of when to neutralize. This seems to me to be an essential decision of any good PM.
When you are making a decision on a portfolio level, or on a feature level, to neutralize, you are essentially looking to match competition on particular feature or specification. Key in this decision is to minimize your spend and to make certain that you don't overinvest. Potential overinvestment can result from development functions wanting to add value to the feature and take it beyond its requirements. To clarify this, I believe it helps to consistently and emphatically state the neutralizing strategic purpose of the product or feature.
Differentiation, on the other hand,oftentimes can yield a more troubling failure -- that of underinvestment in time and / or resources. Interestingly, when you see underinvestment in time and / or resources on your supposedly differentiated products, I believe it can also be because of the overinvestment in neutralizing products. Making people aware of these trade-offs is essential to driving strong focus from development functions and ensuring that the portfolio mix matches your business needs.
So, is there ever a need for neutralization? I would contend that few companies do not do some amount of neutralization. The iPod was not the first MP3 player in the market. And it did not differentiate on what would have been the obvious criteria: sound quality. Rather, Apple choice music distribution, user experience and design as its differentiating features.
Based on reading about Steve Jobs, it appears that Mr. Jobs has an incredible intuitive sense of what consumers care about but think their existing products already deliver, what consumers care about but don't think their existing products already deliver and what consumers just don't care about. I would suggest that Apple focuses its efforts on the things that consumers care about and don't think existing products deliver. This is usually centered upon making technology easier to deal with and addressing the softer challenges, while being "good enough" on the basics. Apple, in other words, has a crystal clear sense of not only when to differentiate but also of when to neutralize. This seems to me to be an essential decision of any good PM.
Monday, June 1, 2009
Google AdWords for Concept Testing / Consumer Research?
One of the most frequent complaints I hear from Product Managers is about the lack of available dollars for consumer research. Here's one potential option that may have value to you if you're nearing release of a product and need to fine-tune your market positioning: Use Google AdWords!
The idea is simple: Create a landing page for your new product, along with an option for users to sign-up to hear more information when the product is available. Throw together several ads which test several different product positioning options. Use Google's relevant keywords to quickly define who might be looking for your product. Then horse-race the ads.
I know this is not representative and may yield issues when confidentiality is critical. But I really think the potential for AdWords for research is pretty interesting. You can learn a lot from click-through of the ads itself. You can have the ad not shown in geographies where your competition is based. You can even have your landing page change for folks coming from competitive websites if competition is an issue. Furthermore, I suspect with some solid work on this methodology by some intelligent market research people that it could be made representative and operational norms could eventually be developed.
Bigger benefits: Set-up time and costs are low and it can be as expensive or as inexpensive as you desire. And so long as you don't mislead (no "buy-now" stuff), you could use your landing page to develop a community of loyal users before the product is even launched. So long as you listen to them of course!
So far, my use of this methodology has only been as one tool to test a product name on a product improvement, though I think it has broader merit. Thoughts?
The idea is simple: Create a landing page for your new product, along with an option for users to sign-up to hear more information when the product is available. Throw together several ads which test several different product positioning options. Use Google's relevant keywords to quickly define who might be looking for your product. Then horse-race the ads.
I know this is not representative and may yield issues when confidentiality is critical. But I really think the potential for AdWords for research is pretty interesting. You can learn a lot from click-through of the ads itself. You can have the ad not shown in geographies where your competition is based. You can even have your landing page change for folks coming from competitive websites if competition is an issue. Furthermore, I suspect with some solid work on this methodology by some intelligent market research people that it could be made representative and operational norms could eventually be developed.
Bigger benefits: Set-up time and costs are low and it can be as expensive or as inexpensive as you desire. And so long as you don't mislead (no "buy-now" stuff), you could use your landing page to develop a community of loyal users before the product is even launched. So long as you listen to them of course!
So far, my use of this methodology has only been as one tool to test a product name on a product improvement, though I think it has broader merit. Thoughts?
Thursday, May 28, 2009
Is and Is Not Lists in Product Requirements
I love this tip for improving the definition of your products. If you want a really clear idea of what your product is, articulate what it is not with an "Is not" list.
The "Is Not" list does not exist to spell out a bunch of irrelevant and silly product features that would be unlikely to find their way into your product. Instead, it is confined to the close call features that might exist in future products and that cause a great deal of debate. The "Is Not" list quickly also focuses on the most difficult product definition decision, which is not what to do but what not to do.
I have seen this used to tremendous success in more design-oriented product briefs to really help provide a vivid picture of a product before it's created. It can narrow very clearly the range within which a team further defines and executes the product.
An Is / Is Not list....
- Does provide contrasts but does not list opposites.
- Is about making features apparent, but not about listing apparent features.
I think you get the picture!
Source: Results Without Authority: Controlling a Project When the Team Doesn't Report to You -- A Project Manager's Guide
The "Is Not" list does not exist to spell out a bunch of irrelevant and silly product features that would be unlikely to find their way into your product. Instead, it is confined to the close call features that might exist in future products and that cause a great deal of debate. The "Is Not" list quickly also focuses on the most difficult product definition decision, which is not what to do but what not to do.
I have seen this used to tremendous success in more design-oriented product briefs to really help provide a vivid picture of a product before it's created. It can narrow very clearly the range within which a team further defines and executes the product.
An Is / Is Not list....
- Does provide contrasts but does not list opposites.
- Is about making features apparent, but not about listing apparent features.
I think you get the picture!
Source: Results Without Authority: Controlling a Project When the Team Doesn't Report to You -- A Project Manager's Guide
Wednesday, May 27, 2009
The Herfindahl-Hirschman Index: A tool for competitive analysis in scoping opportunities
Scoping is one of the most important roles that we play as Product Managers in terms of defining the value of an opportunity in a given market. Scoping's key activity is defining the addressable market opportunity. The challenge with this activity description is that "addressable" is a subjective term. One of the key questions I pose in determining market addressability is the industry structure in terms of the competitive market share.
The Herfindahl-Hirschman Index is an interesting tool to make determinations with regard to market competitiveness. The Index is calculated by adding the sum of the squares of the percentage market shares of the firms within the industry. The answer can range from 0 to 10,000. What this Index can help do is a few things:
1) If a market shows a high HHI, it is useful to quickly look for barriers to entry of some sort among the market leader. These could be IP barriers, manufacturing scale efficiencies or relationships. This quick look can identify the challenges that your new product concept must overcome to succeed int he marketplace.
2) Where the HHI is high but you cannot readily identify barriers, besides acting as a caution to dig deeper, it may suggest a huge potential opportunity as the space has not yet attracted sufficient competitive pressure.
3) If HHI is low, it is useful to try and gauge profitability of the market given a quick back-of-the-envelope calculation of costs with your Operations group to see if you could make money in the market. It could be that the market is so highly competitive that there is little to be gained by your entry. On the other hand, a highly profitable market with low HHI could be an opportunity for market consolidation.
4) HHI is also useful for pinpointing target market segments to attack if your objective is to assault a competitors line as a wedge versus a typical flanking maneouver if you lack the agility or versus a direct assault if you lack the cash flow or institutional strength.
Some companies build HHI into their early Scoping gate reviews. This may be ok as one variable in an equation, but I find that it tends to oversimplify a complex figure. The real value is in its interpretation.
The Herfindahl-Hirschman Index is an interesting tool to make determinations with regard to market competitiveness. The Index is calculated by adding the sum of the squares of the percentage market shares of the firms within the industry. The answer can range from 0 to 10,000. What this Index can help do is a few things:
1) If a market shows a high HHI, it is useful to quickly look for barriers to entry of some sort among the market leader. These could be IP barriers, manufacturing scale efficiencies or relationships. This quick look can identify the challenges that your new product concept must overcome to succeed int he marketplace.
2) Where the HHI is high but you cannot readily identify barriers, besides acting as a caution to dig deeper, it may suggest a huge potential opportunity as the space has not yet attracted sufficient competitive pressure.
3) If HHI is low, it is useful to try and gauge profitability of the market given a quick back-of-the-envelope calculation of costs with your Operations group to see if you could make money in the market. It could be that the market is so highly competitive that there is little to be gained by your entry. On the other hand, a highly profitable market with low HHI could be an opportunity for market consolidation.
4) HHI is also useful for pinpointing target market segments to attack if your objective is to assault a competitors line as a wedge versus a typical flanking maneouver if you lack the agility or versus a direct assault if you lack the cash flow or institutional strength.
Some companies build HHI into their early Scoping gate reviews. This may be ok as one variable in an equation, but I find that it tends to oversimplify a complex figure. The real value is in its interpretation.
Saturday, May 23, 2009
An overview of New Product Introduction
The Gate process is a great way to view a product design effort and to uncover the roles of a PM within it.
Robert Cooper in Winning at New Products: Accelerating the Process from Idea to Launch, Third Edition
outlines a typical Stage-Gate model as comprising the following stages:
1) Discovery
2) Scoping
3) Business Case (I will call this Planning)
4) Development
5) Testing and Validation
6) Launch
Walking through these phases can provide a quick overview of what's broadly expected of a PM.
1) Discovery
Discovery is the phase through which new ideas are uncovered. Discovery phases can be as simple as conducting team brainstorms - or can be more elaborate, including the use of in-depth consumer insights work to uncover unmet functional needs or the use of metaphors to re-position existing product concepts to address unmet emotional needs. At the end of this phase, a basic list of ideas is developed and put through some sort of idea screen to limit the idea list to a palatable number for the Product team at the Scoping stage.
2) Scoping
At the Scoping phase, PM conducts basic analysis to determine the addressable market for the screened product concepts of the previous phase. Scoping may involve looking at many different variables, but one technique I particularly like is to subject a product concept to two lenses: 5S and 4C. 5S refers to synchronized (is it aligned with my company / team direction?), sustainable (is there something in this concept that can withstand the test of time - e.g., competitive pressures, technology change, etc.?), sufficient (is the idea in conjunction with the other parts of the portfolio adequate to attain the company's strategic objectives?), selective (does the idea say what it won't do as well as it says what it will?) and scalable (is the idea feasible to roll out broadly?). 4C refers to the lens of consumer, customer, company and competition. Scoping through these lenses provides a way to quickly understand a market's size, whether you have any right to participate in that market and how aligned the market is with your company's direction. Some companies use a Marketing Requirements Document (MRD) to align the organization at this phase.
3) Planning
The Planning phase of the Stage-Gate process (called by Cooper the "Business Case") involves expanded resource use coordinated by PM and Program Managers to clarify the concept, assess more deeply the technical feasibility and costs (both unit costs and development costs) of creating the product and more thoroughly validate the market opportunity. The more thoroughly validated market opportunity assessment can include, in more mature industries where norms are available, volume models based on preliminary concept tests or, in less mature industries, validation of volumes from sales and customer-facing teams. The market opportunity assessment, technical feasibility and cost analysis should provide the core tools by which to conduct a more thorough financial analysis of the product concept, providing NPV and company cash-flow impacts of the development. Some companies use a Product Requirements Document (PRD) to align the organization at this phase.
4) Development
In my experience, Program Managers usually take over the Development phase of the Stage-Gate process. At this stage, the Program Manager will work with Product Development to coordinate the creation of a product that meets the requirements laid out by PM in the marketing and product requirements. Detailed specifications will be developed to enable product performance that meets requirements and these specifications will be used by engineering to assess whether they can be attained within the cost constraints laid out in the financials.
5) Testing and Validation
In this phase, a Quality organization may take over. Having been involved in-depth usually in the Development phase, Quality will test the product against the specifications and requirements to ensure execution. This phase may also include Packaging and Advertising testing to ensure the package is "intrusive" and drives the necessary awareness to fulfill the needs of the business model.
6) Launch
Here, a product is moved from NPI to sustaining and the sustaining plans are activated. This may include Customer Service support, Technical Support, etc. At this stage, Sales will focus on product placement and Marketing will drive product trial through advertising (both conventional and word-of-mouth), sampling and merchandising.
I will focus in most of my posts on in-depth looks at tools that may be applied at each of these different phases.
Robert Cooper in Winning at New Products: Accelerating the Process from Idea to Launch, Third Edition
outlines a typical Stage-Gate model as comprising the following stages:1) Discovery
2) Scoping
3) Business Case (I will call this Planning)
4) Development
5) Testing and Validation
6) Launch
Walking through these phases can provide a quick overview of what's broadly expected of a PM.
1) Discovery
Discovery is the phase through which new ideas are uncovered. Discovery phases can be as simple as conducting team brainstorms - or can be more elaborate, including the use of in-depth consumer insights work to uncover unmet functional needs or the use of metaphors to re-position existing product concepts to address unmet emotional needs. At the end of this phase, a basic list of ideas is developed and put through some sort of idea screen to limit the idea list to a palatable number for the Product team at the Scoping stage.
2) Scoping
At the Scoping phase, PM conducts basic analysis to determine the addressable market for the screened product concepts of the previous phase. Scoping may involve looking at many different variables, but one technique I particularly like is to subject a product concept to two lenses: 5S and 4C. 5S refers to synchronized (is it aligned with my company / team direction?), sustainable (is there something in this concept that can withstand the test of time - e.g., competitive pressures, technology change, etc.?), sufficient (is the idea in conjunction with the other parts of the portfolio adequate to attain the company's strategic objectives?), selective (does the idea say what it won't do as well as it says what it will?) and scalable (is the idea feasible to roll out broadly?). 4C refers to the lens of consumer, customer, company and competition. Scoping through these lenses provides a way to quickly understand a market's size, whether you have any right to participate in that market and how aligned the market is with your company's direction. Some companies use a Marketing Requirements Document (MRD) to align the organization at this phase.
3) Planning
The Planning phase of the Stage-Gate process (called by Cooper the "Business Case") involves expanded resource use coordinated by PM and Program Managers to clarify the concept, assess more deeply the technical feasibility and costs (both unit costs and development costs) of creating the product and more thoroughly validate the market opportunity. The more thoroughly validated market opportunity assessment can include, in more mature industries where norms are available, volume models based on preliminary concept tests or, in less mature industries, validation of volumes from sales and customer-facing teams. The market opportunity assessment, technical feasibility and cost analysis should provide the core tools by which to conduct a more thorough financial analysis of the product concept, providing NPV and company cash-flow impacts of the development. Some companies use a Product Requirements Document (PRD) to align the organization at this phase.
4) Development
In my experience, Program Managers usually take over the Development phase of the Stage-Gate process. At this stage, the Program Manager will work with Product Development to coordinate the creation of a product that meets the requirements laid out by PM in the marketing and product requirements. Detailed specifications will be developed to enable product performance that meets requirements and these specifications will be used by engineering to assess whether they can be attained within the cost constraints laid out in the financials.
5) Testing and Validation
In this phase, a Quality organization may take over. Having been involved in-depth usually in the Development phase, Quality will test the product against the specifications and requirements to ensure execution. This phase may also include Packaging and Advertising testing to ensure the package is "intrusive" and drives the necessary awareness to fulfill the needs of the business model.
6) Launch
Here, a product is moved from NPI to sustaining and the sustaining plans are activated. This may include Customer Service support, Technical Support, etc. At this stage, Sales will focus on product placement and Marketing will drive product trial through advertising (both conventional and word-of-mouth), sampling and merchandising.
I will focus in most of my posts on in-depth looks at tools that may be applied at each of these different phases.
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