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THE MARE MODEL

THE MARE MODEL. Value to the Consumer (Superiority Premium). VALUE TO THE CONSUMER (Superiority Premium). Purpose of the Section Explain how customer needs can be filled better than current options Account for any barriers to commercialization

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THE MARE MODEL

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  1. THE MARE MODEL Value to the Consumer (Superiority Premium)

  2. VALUE TO THE CONSUMER (Superiority Premium) • Purpose of the Section • Explain how customer needs can be filled better than current options • Account for any barriers to commercialization • Estimate the superiority premium for the customer

  3. VALUE TO THE CONSUMER Basic Logic In order to be successful, you have to meet consumer needs better than the competition. If your “better” product isn’t valued by consumers, it won’t sell. Lastly, you must know if consumers are willing to pay enough to make a profit.

  4. VALUE TO THE CONSUMER Component Steps • How consumer needs can be met better? Vonage: A Failed Technology Model

  5. VALUE TO THE CONSUMER Component Steps • How consumer needs can be met better? • Barriers to Success • Customer Related Barriers • Market Related Barriers Wallet Phone Then and Now

  6. VALUE TO THE CONSUMER Component Steps • How consumer needs can be met better? • Barriers to Success • Customer Related Barriers • Market Related Barriers • Estimate the value of the competitive advantage.

  7. BETTER MEETING NEEDS Key Inputs Means-end map ACE matrix Competing Solutions Table Primary Output What concrete attributes will be changed Effect of change on abstract attributes How those changes will create greater benefits than existing options

  8. BETTER MEETING NEEDS Tools Kim and Mauborgne’s Buyer Utility Table From Kim, W. Chan and Renee Mauborgne (2000), “Knowing a Winning Business Idea When You See One,” Harvard Business Review, 78 (5), 129-38.

  9. BETTER MEETING NEEDS Tools Kim and Mauborgne’s Buyer Utility Table Consumer experience analysis

  10. BETTER MEETING NEEDS Tools Henderson’s competing solutions table

  11. BETTER MEETING NEEDS Tools “Finding the Right Job for your Product” - “job descriptions“ of the situation the customer found themselves in when they used the product. What are they doing currently How can we do the job better Bad Eating Habits FDA Survey of Eating Behavior

  12. BETTER MEETING NEEDS Tools “Finding the Right Job for your Product” What are they doing currently What are activities associated with consuming the product How can a new product influence the process

  13. BETTER MEETING NEEDS Tools “Finding the Right Job for your Product” - “job descriptions“ of the situation the customer found themselves in when they used the product. What are they doing currently How can we do the job better What are activities associated with consuming the product How can a new product influence the process What is driving non-consumption How can these barriers be overcome Why people don’t diet

  14. CONSUMER BARRIERS Primary Outputs A summary evaluation of potential barriers that might lower the superiority premium

  15. CONSUMER BARRIERS Tools Switching Costs

  16. CONSUMER BARRIERS Tools Switching Costs

  17. CONSUMER BARRIERS Tools Switching Costs

  18. CONSUMER BARRIERS

  19. CONSUMER BARRIERS Tools Adoption process Compatible

  20. CONSUMER BARRIERS Tools Adoption process Compatible Complex

  21. CONSUMER BARRIERS Tools Adoption process Compatible Complex Observable

  22. CONSUMER BARRIERS Tools Adoption process Compatible Complex Observable Size of advantage http://www.cbsnews.com/stories/2009/06/22/national/main5101892.shtml

  23. CONSUMER BARRIERS Tools Adoption process Compatible Complex Observable Size of advantage Ease of trial

  24. CONSUMER BARRIERS Tools Infrastructure Analysis

  25. MARKET BARRIERS Tools Previous “Attempts” Business model http://www.blackweb20.com/2010/08/06/twitters-popularity-doesnt-translate-into-profitability http://venturedig.com/tech/monetizing-social-networks-the-four-dominant-business-models-and-how-you-should-implement-them-in-2010/

  26. MARKET BARRIERS Tools Previous “Attempts” Business model Market size Niche Magazines http://www.vbjusa.com/ http://www.mentalfloss.com/magazine/ http://www.nylonmag.com/ http://www.twinsmagazine.com/ http://www.interweave.com/Magazines/ http://www.softwarebyrob.com/2010/09/30/your-market-is-smaller-than-you-think/

  27. MARKET BARRIERS Tools Previous “Attempts” Business model Market size Cannibalization http://www.wizatbusiness.com/cannibalism-in-the-auto-industry/2010/05/

  28. MARKET BARRIERS Cannibalization and Xerox PARC The Xerox Palo Alto Research Center, often dubbed Xerox PARC, was started in the early 1970s by the Xerox corporation. Based on the East Coast, the manufacturer of copy machines felt that its core business was threatened by the emerging computer revolution, with its promise of a paperless office. In a very smart move, they set up a research center in Stanford Research Park, and hired talented computer scientists, many from the leading university, to invent the office of tomorrow. In 1979, when Steve Jobs toured PARC, the researchers had already pioneered several technologies that would revolutionize computing forever. They had a network of computer working together using Ethernet. They had developed object-oriented programming, a new way to write software much more effectively. They were working on the laser printer. But most of all, they had built the world’s first computer to use a graphical user interface (GUI), the Alto. The Xerox Alto had a strange device called a mouse, that you could use to move a cursor around the screen. You could open files and folders, copy and paste content inside them. It was simply a breakthrough. The Xerox PARC did not keep its technology hidden from outsiders. Informed circles knew about the center’s advances, especially at Stanford and in the Valley as a whole. Everybody pretty much sensed that this technology would have a huge impact on the industry — everybody but Xerox themselves. The conservative management on the East Coast never grasped the extent of what their researchers in California had come up with. They simply dismissed it as futile. The Lisa team was briefed about Xerox PARC’s technologies by insiders, including JefRaskin, the manager of the Macintosh project. Steve negotiated a deal with Xerox to be given a complete tour of the facilities. Here’s how he described his experience later: Within ten minutes, it was obvious to me that all computers would work like this someday. Steve Jobs in Triumph of the Nerds Several researchers and engineers were lured away from PARC by Apple, such as Larry Tesler and Bruce Horn, to develop a GUI for Lisa. The biggest challenge was to design an actual product, not a fancy prototype too expensive to build. After all, one of the reasons Xerox dismissed the Alto was its astronomical price tag: $20,000! That was twenty times as much as the Apple II. From http://www.allaboutstevejobs.com/bio/long/03.html

  29. MARKET BARRIERS Tools Previous “Attempts” Business model Market size Cannibalization Ability to deliver http://thewondrous.com/30-stupidest-inventions-ever/ http://en.wikipedia.org/wiki/Quadraphonic_sound

  30. MARKET BARRIERS Tools Previous “Attempts” Business model Market size Cannibalization Ability to deliver Superior competitor in wings "Getting there with 4 feet of space your first year in Toys-R-Us is huge," said Mark Grill, an independent rep selling Marshmallow Fun products to Toys R Us. "Nerf has 20 or 25 feet." Marshmallow Fun has a long way to reach Nerf's numbers. Hasbro Inc.-owned Nerf is a powerhouse brand, with annual sales of about $200 million. Between new markets and the new blaster, Hasbro said Nerf sales increased 32 percent in the third quarter.

  31. MARKET BARRIERS Tools Previous “Attempts” Business model Market size Cannibalization Ability to deliver Superior competitor in wings Distribution and support http://www.inc.com/magazine/19810601/4639.html

  32. MARKET BARRIERS Tools Henderson’s Peripheral Vision Segments Roles and responsibilities Different processes Disjunctures

  33. VALUE THE COMPETITIVE ADVANTAGE Key MARE Model Inputs Means-ends map ACE matrix Ability to fill consumer needs better Evaluation of potential barriers Evaluation of competitive offerings or substitutes Primary Outputs A specific number/metric that captures the net added value of the new product to the customer.

  34. VALUE THE COMPETITIVE ADVANTAGE Tools Superiority Premium Analogous Products http://www.slingbox.com/go/home

  35. VALUE THE COMPETITIVE ADVANTAGE Tools Price Corridor of the Masses From Kim, W. Chan and Renee Mauborgne (2000), “Knowing a Winning Business Idea When You See One,” Harvard Business Review, 78 (5), 129-38.

  36. VALUE THE COMPETITIVE ADVANTAGE Tools Price Corridor of the Masses

  37. VALUE THE COMPETITIVE ADVANTAGE Tools Price Corridor of the Masses

  38. VALUE TO THE CONSUMER

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