Agenda For the Day

1
Agenda For the Day

• CREATING AND DELIVERING SUPERIOR VALUE - PRODUCT
  PRICING
• A.M.
• General Discussion on Product Strategy
• RIM Case
• Your Product Experiences
• PM
• General Discussion on Pricing
• Exercise
• Case Augat Electronics
• Your Pricing Experiences

2
Agenda Product Strategy

• Product
• Value Drivers
• New Product Development Challenges Issues
• Product Life Cycle
• Product Portfolio
• RIM Case
• Summary Conclusions

3
Product Definition

• Bundle of Benefits
• Benefits vs. Attributes
• Integration with other Elements

4
Product Value Hierarchy
Product Differentiation

• Extended Warranty
• Trade In
• Financing

• MealPreparation
• Fitness Books
• Exercise Plan

Augmented Product
Value Proposition

• Daily Newsletter
• Advice
• In-Depth Information

• Engine
• Tires
• Radio

Basic Product
Core Benefit

• Transportation

• Dieting Information

Traditional Sports Utility Vehicle
New Economy e-diets.com
5
Product Development Levers for Value Provision
Product Type
Core
Augmented

• Packaging
• Attributes and Features
• Customer-Specified Attributes and Features
• Mass-Customized Product

• Customer Service Programs
• Post-Sales Support
• Customer Care
• Customer Relationship Management
• Loyalty Programs and Privileges
• Availability of Complementary Products
• Upgrades
• Enabling Community
• Additional Functionality
• Fulfillment Capabilities

6
Handspring Product Availability Screenshot

• Handspring Visor complementary products include
• VisorPhone (cellphone)
• Wireless modems
• Radio
• Wireless messaging modules
• Pager
• Video mames
• E-books
• MP3 player
• Digital camera
• Voice recorder
• Universal remote control
• Memory expansion modules
• Finance and graphing calculator
• Global positioning system

7
Growth Avenues

• Existing customers with existing products
• New customers for existing products
• New products or services
• Better delivery systems
• Geographic expansion
• Acquisition or alliances
• New competitive arenas

8
Example Which Opportunity would you pursue?

• Product A enhancement to current offering
• Market size - 500 mil, mature stable but
  modest growth
• Competition well established players with very
  similar offerings, consolidation starting to
  occur
• Customers very demanding, high expectations,
  driving margins down

• Product B innovative offering that RD claims
  to offer superior value
• Market Size - 50 mil but expected to grow with
  player activity
• Competition first mover but others expected to
  be developing new offerings for this market
• Customers most unaware except for early
  adopters
• Margins high

9
Current Examples Whats going on?

• Auto Mercedes C Class, Jaguar - X Type, Volvo,
  Porsche Cayenne SUV, Bentley, BMW - Mini, Harley
  Davidson V-Rod
• Food Beverage - Pepsis Lemon Twist, Heinz EZ
  Squirt Purple Ketchup, Chicken McGrill, Trident
  Advantage
• Retail - Nike Goddess, Nike Weather, Roots
  Vitamins Roots Water, Columbia Sportswear -
  Watches
• Airlines - Air Tango
• Others????

10
Descartes Solutions Overview
11
Unequaled supply chain reach.

• 47 of the top 50 less-than-truckload (LTL)
  carriers
• 7 of the largest food and drug retailers
• 150 of the Global 500 companies connected
• 13 of the top 15 third party logistics companies
• 10 of the top 10 electronic and high tech
  companies
• 50 of the top 50 air messaging providers
• 11 of the top 20 ocean carriers
• 70 of ground transportation messaging in North
  America
• Approximately 80 of the North American air
  cargo messaging
• 50 of the worldwide air cargo messaging.

12
New Product Development

• Process Competencies
• Time, Cost, Quality, Relevancy Pressures
• Gating Frameworks
• Customer voice
• Simultaneous vs. Sequential
• Breakthrough Products

13
New Product Development Process
PortfolioManagement
Commer- cialization
IdeaGeneration

• Key Drivers
• Customer Needs
• Production
• Research and Development
• Competitors
• Market Dynamics

Test Marketing
ScreeningIdeas
BusinessAnalysis
ProductDesign
PrototypeDevelopment
14
Traditional Gated New Product Development Process
Idea Generation
Screening Ideas
Management Review
Product Design
Management Review
Prototype Development
Management Review
Business Analysis
Management Review
Test Market
Management Review
Commercialization
Management Review
15
Development Release Process
Percent level of confidence from development
perspective
30
75
90
0
International
Product Prioritization
Release Planning
Product (Innovation)
Develop Product Requirements and Refine Key
Project List
Prioritize Projects Internally and Define
Business Requirements
Generate Ideas
Develop Use Cases
Release Management Activities
Technology (Infrastructure)
GA
Release Review Board Meeting
Client Implement.

• Finalize/Communicate (internally) Release
  Scope
• Develop/Communicate Release Plan

Release Review Board Meeting

• Prioritize initiatives to one, comprehensive
  list

CheckFree i-Solutions
16
New Product Acceptance Factors

• Relative Advantage
• Compatibility
• Complexity
• Trial ability
• Observe ability
• Infrastructure

17
Electrohome Rental/Staging
18
The Roadie
19
THE ROADIE
20
The RoadRunner
21
Reasons For New Product Failure

• Too Small a Market
• Insignificant Point of Difference
• Poor Product Quality
• No Access to Customers
• Bad Timing
• Poor Execution of Marketing Mix

22
Build What You Can Sell!

• DONT
• Sell What You Can Build!

23
Product Development Portfolio

• Breakthrough to Extensions
• Balance of Risk, Timing
• Strategy Link Paths to Leadership
• Alliances
• Fusion

24
Product Portfolio
Low
High
Degree of Innovation
None
Breakthrough or Discontinuous
Incremental
Existing Products
New Products
Line Extensions
25
Technology Maps

• Define a stream of new products (breakthroughs
  derivatives) company plans to develop over time.
  
• Used for
• Commitment to new product development
• Allocation of resources
• A flexible blueprint that must be updated
  regularly

26
Product Platforms and Derivatives
27
Architecture/Technology Platform
i-Series Engine 4.0
28
CheckFree i-Solutions Operating Environments
29
Christie Digital Solutions
Immersive
Control Room Display Systems
Digital Cinema
Fixed Installations
Rental Staging
30
Sales by Product Line
31
Versioning Information based Products - Shapiro
Varian, HBR Nov-Dec 98

• Versioning Dimensions - Examples
• Comprehensiveness
• Manipulation
• Community
• Annoyance
• Speed
• Data Processing
• Image Resolution
• Support

32
Example Kurzwell Applied Intelligence Voice
Recognition Software
33
Product Life Cycle

• Conceptual Foundation Diffusion of Innovations
• Product Definition Issues
• Number of Cycle Shapes
• Descriptive vs. Predictive
• External Internal Issues
• Shorter Cycles

34
DISCIPLINES AND LIFE CYCLE
Alternative Customer Intimacy
Product Leadership
C H A S M
Solution Sale
Technology Sale
Visionaries
Pragmatists
Conservatives
Laggards
35
RIMs Launch of Blackberry

• Targeting the right customers
• Understanding adoption process for new technology
• Value proposition initial , subsequent offers
• Market exposure access
• Key relationships
• Competitive arena
• Technology market evolution

36
Business Planning

• To evaluate new business opportunities and major
  transitions in the product strategy.

New
Markets
Current
Current
New
Products
37
Business Plan

• Analysis of Industry and Customers
• Define by market segmentation based on user needs
• Prioritize attractiveness based on size, growth
  and profitability
•  Analysis of Competition
• Target segments based on sustainable competitive
  advantage 
• Statement of Purpose
• Generate a clear sense of direction for our
  business and its partners
• Create purpose statement (strategic direction to
  move in the 3-5 year time horizon). Includes what
  user needs segment will be served,
  product/service value proposition, the basis for
  sustainable competitive advantage, and an
  articulated vision of the future world.

38
Business Plan

• Five Year Objectives
• Define a point of focus or finish line with
  measurable objectives
• Provide vision, using one or two clever
  differentiators, that stands the test of time
• Identify key success factors
• Products and Services
• Define utility, services and vendor attributes
  necessary to meet customer expectations and beat
  the competition
• Development and Introduction Plans
• Provide product roadmaps, communications plan,
  and partnering plans

39
Business Plan

• Financial Analysis
• Project revenues, profitability using a range of
  optimistic and pessimistic assumptions
• Contingency Planning
• Define external and internal issues and their
  probablilities using scenario planning
• Recommendations
• First Year Plan

40
Product Lifecycle
41
Technology Market Model
Main Street
Tornado
Paging in 98
Wireless email in 98
Bowling Alley
Chasm
Typical Customer
Innovators
Late Majority
Laggards
Early Adopters
Early Majority
Source Geoffrey Moore, Crossing the Chasm
42
Product Plan

• The communication vehicle used to convey the key
  messaging of a new product to the rest of the
  organization
• Customer Needs Analysis
• Total Available Market
• Target Market
• Product Positioning
• Value Proposition
• Features and Benefits
• Competition
• Pricing
• Whole Product
• Channel Strategy
• Financial Targets

43
Value Proposition
Identifies centerpoint of target segment

• For target customers
• Who have the following problem
• Our product is a new product category
• That provides breakthrough capability.
• Unlike reference competitor,
• Our product key point of differentiation.

Focuses on segments compelling reason to buy
Sets up product leadership axis
States the product leadership benefit
Reputable product leadership alternative
States the customer intimacy commitment
Source Geoffrey Moore, Crossing the Chasm
44
BlackBerry Value Proposition

• For business e-mail users who want to better
  manage the increasing number of messages they
  receive when out of the office, BlackBerry is a
  mobile e-mail solution that provides a real-time
  link to their desktop e-mail for sending,
  reading, and responding to important messages.
  Unlike other mobile e-mail solutions, BlackBerry
  is wearable, secure and always connected.

45
Whole Product
Potential Product
Products room for growth
Augmented Product
Maximum chance of purchase
Expected Product
Minimum products/services
Generic Product
Shipped in the box
Increase reliance on partners
46
BlackBerry Whole Product
Technology roadmap
Customer training
White papers
ROI information
Competitive info
Accessible product info
BlackBerry Handheld
Software Upgrades
Beta program
Retail display
Brand
Accessories
BlackBerry Desktop
Value-add services
Global presence
Provisioning
BlackBerry Enterprise Server
Network performance
Billing
BlackBerry User Manual
SLA (Service Level Agreement)
Market Coverage
Customer references
Packaging
Evaluation process
Warranty
Order Processing
Marketing Communications
BlackBerry Infrastructure
Technical sales rep
Forward Logistics
Monitoring services
Street price
Promotions
Product demos
Reverse Logistics
Wireless service
Vendor feedback
Customer Support
Financing/leasing/ins.
Service Manual
Professional services
Sales Representation
Development environment
Value-add applications and services
ISV program and third party solutions
Core enhancements
47
RIM Case - What Now?

• Unbundle its expertise
• Open its platform, license its software
• Market expansion - segments, geography
• Expand functionality - value proposition
• Partner
• Acquire
• What do you think?

48
Summary

• Product think benefits
• Product related value drivers
• Integrated with other marketing elements
• Evolution product/market/competition/strategy
• Process capabilities
• Customers Perspective
• Commercialization challenges
• Partnerships relationships