2-Class PRODUCT

CLASS WEEK 2:
2. Product
Dr. Rajesh Bhargave

Week 2 agenda
2a. New product development (NPD)
2b. Branding
2c. Design for needs and habits
• Case discussion: ‘Acquiring the first 1K customers’
Imperial College Business School Imperial means Intelligent Business 2

2a. New Product Development (NPD)

Why do established firms need to
introduce new products from time-
to-time?

Explain different pattern for profit vs. revenue…

New product development process
# Stage Description
1 Idea generation search for new ideas
2 Idea screening spot good ideas, drop bad ideas early
3 Concept development and consumer reactions to product form

testing
4 Marketing strategy develop strategy for introducing the product
development to market
5 Product development develop a physical product
6 Test marketing introduce the product in real settings (often

in small scale)

Market opportunity analysis
# Stage Description
1 Idea generation search for new ideas
2 Idea screening spot good ideas, drop bad ideas early
3 Concept development and consumer reactions to product form

testing
4 Marketing strategy develop strategy for introducing the product
development to market
5 Product development develop a physical product
6 Test marketing introduce the product in real settings (often

in small scale)

Timing matters
Quiz: Product Introduction Dates...
Go to Kahoot.it
(or Kahoot app)

“Buzz” discussion (chat w/ 1 or 2 people)
• Discuss why timing of a new product launch is so important:

– e.g., what are the risks of launching too late?
– e.g., what are the risks of launching too early?
• Think about potential customers for this product:

– Profile early adopters (who are they? what are
their needs?)
– Is this segment measurable, accessible,
substantial, differentiable, actionable?
– How will later adopters differ from early
adopters? (focus on preferences / needs
within this domain)

NPD topics
• FMCG industry
• Problem-solution vs. benefit sought perspective
• Market opportunity analysis
• NPD process
• Product life cycle (introduction, growth, maturity, decline)
• Fashion cycle (culture, satiation, need for uniqueness)
• Diffusion of innovation (definition)
• Five drivers of success for new products:
1. Relative advantage, 2. Simplicity, 3. Compatibility, 4.
Observability, 5. Trialability

2b. Branding

Review: “Value of brands to consumers”
• Take some time to collect your thoughts, then we’ll discuss:
• How do consumers use brands?

– Consider the brand ‘Cadbury’
• What are the 3Es of brand benefits?

– Consider the brand ‘Dove’
– Provide an example of each benefit

Review: “Value of brands to companies”
• Take some time to collect your thoughts, then we’ll discuss:
• What makes up a brand’s identity?
• Airline brands: how do they use the various sensory modalities?

(sight, sound, touch, taste, smell)
• How do companies benefit from having a high brand equity?

“Buzz” discussion on Lipton + share with another pair
• Research the brand ‘Lipton’ online

• List product line extensions (how “wide”/ “deep”)?
– How “wide”?
– How “deep”?
• List brand extensions
• What is the core meaning of this brand?
• Do the brand and product line extensions..

– Have a consistent meaning (“fit”)?
– Reinforce and add to brand equity?

Branding topics
• Athletic footwear (“trainers”) industry

• Brand vs. blind taste tests
• Brand, brand equity, branding, brand image, brand identity
• Utilitarian and hedonic perspective on brands
• 3Es framework (enable, entice, enrich)
• Product line extensions (depth/ width) and brand extensions
• Brand architecture (‘branded house’, ‘house of brands’)

2c. Design for needs and habits

What need(s) are met by food delivery services?
Discuss with one other person, then both pairs discuss

together
Buzz discussion task on ‘needs’
• Look at the three customer profiles depicted below

• Make some assumptions about who they are
• Label each customer profile: focus on needs/ preferences within
the category of “food delivery service” (not just demographics)
• Ask yourself how their needs differ on the what, why, when,
where, and how questions…

Identifying need profiles
Ask yourself:
• What benefits do customers want?
• Why do they want these benefits?
• When do customers want these benefits?
• Where do customers seek these benefits?
• How do customers want to use or experience these benefits?

Go to www.menti.com and use the
code 47 83 28

Listing 7 habits
A. 5 habits of yours that you’d like to continue
B. 1 habit that you’d like to break (eliminate or reduce)*
C. 1 habit that you’d like to adopt or stick to*
*You can keep B & C private (if you wish)

Personal habits
• Why is it so difficult to break ‘bad’ habits?
• Why is it so difficult to adopt new habits and make them stick?

Review: Habit-forming products
• Why is habitual usage/ purchase so important for companies?
• In the ‘hook’ model:
– What’s the difference between an internal and external trigger?
– Why are variable rewards more motivating? (vs. fixed)

Hook model

Examples of habit-forming brands
• Take some time to come up with these three, then we’ll discuss:
• Focus on examples that follow the Hook model of habit-formation

(i.e., not just habitual for other reasons)
• Think of one example from each of these areas:

– 1 app/ service (e.g., Deliveroo)
– 1 retail store
– 1 product/ service related to physical exercise (not an app)

Design for needs and habits topics
• Food delivery industry

• Needs, wants, benefits, demand
• Need as discrepancy between ideal state and actual state
• Identifying needs profile
• Importance of habitual usage/ purchase
• CLV: recency, frequency, monetary value, clumpiness
• Hook model of habit formation
• Designing actions for simplicity, 6 factors that influence task
difficulty

‘First 1K customers’ case

“Growth hacking”
• What does “growth hacking” mean to you?
• Examples from Airbnb, Etsy, and Uber?
• Other examples?

Discuss in your syndicate group
1. Pre-mortem analysis: Etsy
2. Brand building: Airbnb
3. Habit-formation: Uber

1) Pre-mortem analysis
• Do a pre-mortem analysis of Etsy
• Process for a pre-mortem analysis:

– First, imagine Etsy struggles to reach 1K users, and fails as a
platform.
– Then, outline some reasons why Etsy would fail.
• Draw on concepts from our coverage of NPD.
https://hbr.org/2007/09/performing-a-
project-premortem

2) Brand building
• Apply 3Es framework to outline the benefits of the Airbnb

brand to guests and hosts.
• To answer the above question, analyse the brand:

– Airbnb wanted their brand to evoke what kinds of associations?
– What steps did the company take to achieve this brand image?
– Describe components of Airbnb’s current brand identity.

3) Habit formation
• Analyse Uber (of today) using the ‘Hook’ model.
1. Triggers: list internal and external triggers to use Uber
2. Action: How are Uber’s actions simpler vs. competition? (e.g.,

taxi, rental car, car ownership, etc.?)—use the 6 factors
3. Variable rewards: List the different rewards to Uber usage (e.g.,

Maslow’s hierarchy); how are these rewards variable by nature?
4. Investment: How do Uber users invest in the service? What

additional benefits do they receive through repeat usage?

Review of Week 2

Review learning objectives (NPD)
Do you know how to…?
• Initiate New Product Development (NPD)?

• Plan the NPD process?
• Generate new ideas for products?
• Design new products to facilitate adoption by customers?
• Evaluate market opportunities for new products?

Review learning objectives (Brands)
• Develop a brand that provides value to customers?

• Utilise branding to grow a company’s profitability?
• Leverage brands to develop additional offerings?

Review learning objectives (Needs & Habits)
• Figure out what your customers’ needs are?

• Design your offering to fulfil one or more needs?
• Identify profiles of customers that differ in their needs?
• Design habit-forming products and services?


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CLASS WEEK 2:

Dr. Rajesh Bhargave

2a. New product development (NPD)

2c. Design for needs and habits

• Case discussion: ‘Acquiring the first 1K customers’

Imperial College Business School Imperial means Intelligent Business 2

Imperial College Business School Imperial means Intelligent Business 3

Imperial College Business School Imperial means Intelligent Business 4

Imperial College Business School Imperial means Intelligent Business 5

2 Idea screening spot good ideas, drop bad ideas early

3 Concept development and consumer reactions to product form

6 Test marketing introduce the product in real settings (often

Imperial College Business School Imperial means Intelligent Business 6

2 Idea screening spot good ideas, drop bad ideas early

3 Concept development and consumer reactions to product form

6 Test marketing introduce the product in real settings (often

Imperial College Business School Imperial means Intelligent Business 11

Imperial College Business School Imperial means Intelligent Business 12

• Discuss why timing of a new product launch is so important:

• Think about potential customers for this product:

Imperial College Business School Imperial means Intelligent Business 14

Imperial College Business School Imperial means Intelligent Business 15

Imperial College Business School Imperial means Intelligent Business 16

• Take some time to collect your thoughts, then we’ll discuss:

• How do consumers use brands?

• What are the 3Es of brand benefits?

Imperial College Business School Imperial means Intelligent Business 17

• Take some time to collect your thoughts, then we’ll discuss:

• What makes up a brand’s identity?

• Airline brands: how do they use the various sensory modalities?

• How do companies benefit from having a high brand equity?

Imperial College Business School Imperial means Intelligent Business 18

• Research the brand ‘Lipton’ online

• What is the core meaning of this brand?

• Do the brand and product line extensions..

Imperial College Business School Imperial means Intelligent Business 19

• Athletic footwear (“trainers”) industry

Imperial College Business School Imperial means Intelligent Business 21

Imperial College Business School Imperial means Intelligent Business 22

Discuss with one other person, then both pairs discuss

• Look at the three customer profiles depicted below

Imperial College Business School Imperial means Intelligent Business 24

Imperial College Business School Imperial means Intelligent Business 25

Imperial College Business School Imperial means Intelligent Business 27

A. 5 habits of yours that you’d like to continue

B. 1 habit that you’d like to break (eliminate or reduce)*

C. 1 habit that you’d like to adopt or stick to*

*You can keep B & C private (if you wish)

Imperial College Business School Imperial means Intelligent Business 28

• Why is it so difficult to break ‘bad’ habits?

• Why is it so difficult to adopt new habits and make them stick?

Imperial College Business School Imperial means Intelligent Business 29

• Why is habitual usage/ purchase so important for companies?

• In the ‘hook’ model:

– What’s the difference between an internal and external trigger?

– Why are variable rewards more motivating? (vs. fixed)

Imperial College Business School Imperial means Intelligent Business 30

Imperial College Business School Imperial means Intelligent Business 31

• Focus on examples that follow the Hook model of habit-formation