An Effectual approach Prof Dr EJ Nijssen Eindhoven University of Technology 1 Session 3 Effectual segmention and positioning to maximize the value of ID: 628157
Download Presentation The PPT/PDF document "Entrepreneurial Marketing" is the property of its rightful owner. Permission is granted to download and print the materials on this web site for personal, non-commercial use only, and to display it on your personal computer provided you do not modify the materials and that you retain all copyright notices contained in the materials. By downloading content from our website, you accept the terms of this agreement.
Slide1
EntrepreneurialMarketing
An Effectual approachProf. Dr. E.J. Nijssen, Eindhoven University of Technology
1
Session 3: Effectual segmention and positioning to maximize the value of your new product
Nijssen, E. (2014).
Entrepreneurial Marketing: An Effectual Approach. Routledge.
Available from
Routledge
at:
http://www.routledge.com/books/details/9780415722216/Slide2
Objective lecture2
Explain that most applications of new technologies tend to underperform for the average customer in the marketplaceIntroduce a smart way
to map the market3-D Abell modelIntroduce
effectual segmentation and positioningDevelop assumptions about best, first segment to attackCreate a basis for testing using multiple iterations of experimentingSlide3
New products often
have benefits and drawbacks3Perceptions; relative to reference point
Improvements vs. shortcomings
weigh differentlyGourville (2006) WHAT CUSTOMERS INNOVATION GAIN LOSEElectrical cars Clean environment Easy refueling E-books Easy portability Durability
Screw-top wine caps Less
spoilage Elegance of the experienceWind turbines No polluting energy Unobstructed
views
Online
grocery
shopping
Home
delivery
Ability
to select
freshest
products Slide4
Cause of the problem
4New technologies and their applications tend to underperform in
beginning (Christenson 1997); they
still need to mature and iron out kinks.Such technology development follows normal S shaped curve patterns and obeys to laws of technological progress.Slide5
Christensen's framework of technological
evolution 5
technology 1
technology 2acceptable range of functionality
performance demand at the upper end of the market
performance demand at the lower end of the market
time
disruptive
technology
Christensen
(1997)Slide6
Firms/Entrepreneurs generally working with first customers to help "define" the market6
technology 1
technology 2
acceptable rangeupper range
lower range
time
Sensemaking processes
e.g. work with first customer to define/ seek legitimation
So
, we
should
proactively
look
for
customers
who
like
the
new
technology’s
new
benefits
but
do
not
mind
its
drawbacks (
which
often
resolve
if
the
technology
matures
)Slide7
Abell’s 3 D representation of the market: Example Restaurantsbusiness people
cheapSpeed/convenience
ambiance
Eating out experienceSelf serviceFull ServiceCustomer segments
Customer needs
Technologies
Culinary quality
Teenagers
Parents with children
Double income no kids
7
Eg
MacDonalds
/
Kentucky
fried
-
-
-
-
-Slide8
Please note8The technique
helps to conceptualize your market and explore boundary conditionsIt explicitly links supply and
demandproducts are in the matrix; they
are the linking mechanismA new technology and its benefits, but alos emerging segments (and their new needs) can be added on axes; So, dynamic orientation.Note
: no single solution existsSlide9
Abell's 3 dimensional market
representation and innovation's role9
C
ustomer segmentsCustomer benefits
T(
original
)
T(
new
)
Imagine a market with 4 customer segments (C1 through C4). C1 and C2 are the most demanding customers (most needs/benefits). Imagine that part of their needs are not well covered by the new technology. W
ho benefits most from the new benefits of the new technology/application?
C1 C2 C3
C4
=
part
of
existing
needs
not
/
less
well
covered
by
new
technology
=
needs
covered
by
original
technology
Technologies
=
extra, latent
needs
covered
by
new
technologySlide10
How digital cameras penetrated segment by segment
Digital
Analog
/
chemical
Prof
photogr’s
Amateurs
Leisure/
fun
Manual
adjustment
C
onvenience
Excellent
quality
image
Customer needs
Customer
segments
Technologies
Speed
No-print
First target segment is the
customer
segment
with
highest
fit
with
technology’s
current
performance
10Slide11
How digital camera technology blurred industries
Mobile phone market
Video
Webcams11
Digital
Analog
/
chemical
Prof
photogr’s
Amateurs
Leisure/
fun
Manual
adjustment
C
onvenience
Excellent
quality
image
Customer needs
Customer
segments
Technologies
Speed
No-printSlide12
Example: Alternative bicycleFor About $20, Cardboard Bicycle Could Change The World, Inventor Says..\..\YouTube\cardboard bicycle
bicycle.flvVideo:
cardboard
bicycle (excercise)Please identify, using the 3D matrix (
technology, benefits
, customer groups) shown, the (international)
market
for
this
productSlide13
Commutor
Relax
/ Leisure
Sportsl
uggage option
comfort
Easy to
ride
/
transportation
Customer needs
Customer
segments
Technologies
Adjustable
gear
(wind/
mountain
)
light
sustainable
low
price
Drawbacks:
Sensitive to side wind
Durability
…
Factor-in in decision
durable
Internal
transp’t
(
warehouse
)
Rentals
steel
carbon fiber
Peddle
Electrical
Peddle recline
cardboard
metal cord
Poor
/
Emerging
Countries
Prestige,
personalization
,
disposable
, souvenir….
Possible solution; conceptualization
13Slide14
Effectual segmenting, targetting and positioning
14
Firm competencies and customer value objectives
Evolving customer segments
Identify customers with highest customer value score of the application & early technology develop’t
Benefits of the new application & technology
Choice of first target segment
Segmentation
Targeting
Positioning statement
Positioning statementSlide15
Formulating a positioning statement15
TECHNOLOGICAL ADVANTAGE:
What are the strong points of the new technology, the startup and its application?
DISCRIMINATOR:What makes the new application unique? Identify and label the Unique Selling Points compared to competitive alternatives
CUSTOMER INSIGHT:
Market segment that likes benefits best? Why? What is the unfulfilled need addressed and frustration resolved? Why is this a problem?
REASONS TO BELIEVE:
Evidence why the application /technology will outperform alternatives (and target segment does not mind draw-backs of the new, evolving technology)
Positioning statementSlide16
LessonsAbell’s 3 D presentation of the market is
useful for understanding relationships between technology/suppliers and customers/needsIt can be
used to explore the impact of a new
technology and application on the market and help identify the target segmentAs new technology enters the market generally from below (underperforming from many existing customers point of view) you need to proactively identify the most attractive customer segmentUsing positioning the
unique aspects (USPs) of the new
application can be emphised for the this
customer
segment
Note
that
the
customer
segment
may
involve
an new
,
emerging
set of
customersSlide17
The Effectual versus Traditional marketing approach
TRADITIONAL APPROACHIdentify latent need
New
productSatisfaction
ASSUMPTIONSPredict future
Lineair process
EFFECTUAL APPROACH
New
product
Discover
application
/
customer
Satisfaction
Unpredictable
future
Iterative
use
;
experimentation
&
networking
Affordable
loss
17