Picking a winning product
CEOs face strategic investment choices every day. The sum of those choices can decide how well the company performs in the long run.
The following formula is one way to evaluate the potential success of a new product or service in the marketplace. The ultimate goal is to score highly in all four categories.
- Providing high purchase motivators
A. It must be less expensive than existing products/services (lower price).
B. It must provide better features than existing products/services (greater benefits), e.g. BMW’s “sheer driving pleasure.” - Eliminating purchase barriers
A. It must not have any switching or adoption costs (easy to use).
B. It must be readily available (easy to buy), e.g. Dell’s online ordering system.
This approach, developed by Eric Mankin, president of Innovation & Business Architectures, allows companies to quickly evaluate their products and services against the competition. It can also serve as a roadmap in the R&D process.
In a recent article for Working Knowledge, a Harvard Business School newsletter, Mankin applied the formula to several products, including Procter & Gamble’s SpinBrush and the Upromise affinity investing program. Read the entire article.
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