42629 lecture 12 pt2
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Transcript of 42629 lecture 12 pt2
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Protovation – Market testingThomas J. Howardhttps://sites.google.com/site/thomasjameshowardhomepage/[email protected]
Unless otherwise stated, this material is under a Creative Commons 3.0 Attribution–Share-Alike licence and can be freely modified, used and redistributed but only under the same licence and if including the following statement:
“Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark”
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2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
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9 Guesses
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2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
3Blank 2012, Crossing the Rubicon: Entrepreneurial education at the crossroads
![Page 4: 42629 lecture 12 pt2](https://reader036.fdocuments.in/reader036/viewer/2022062319/5555ff58d8b42a8a5f8b53c5/html5/thumbnails/4.jpg)
2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
4Blank 2012, Crossing the Rubicon: Entrepreneurial education at the crossroads
![Page 5: 42629 lecture 12 pt2](https://reader036.fdocuments.in/reader036/viewer/2022062319/5555ff58d8b42a8a5f8b53c5/html5/thumbnails/5.jpg)
2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
5Blank 2012, Crossing the Rubicon: Entrepreneurial education at the crossroads
![Page 6: 42629 lecture 12 pt2](https://reader036.fdocuments.in/reader036/viewer/2022062319/5555ff58d8b42a8a5f8b53c5/html5/thumbnails/6.jpg)
2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
6Blank 2012, Crossing the Rubicon: Entrepreneurial education at the crossroads
Hypotheses Testing and Insight
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Determine Your Market
• Should be divided into seven key parts1. Consumption2. Markets3. Distribution system4. Market entry5. Buyers6. Selling Arrangements7. Prices
Material from:
Khaled Ayesh 2009, “How to Prepare Innovative Feasibility Study in transitional economy”, Consulting Group for Development, CGD
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1. Consumption• What is the current consumption of
the product or service?• What are the current trends in
consumption? Is consumption increasing or decreasing?
• How is the product or service being consumed? (Packaging, volumes)
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1. Consumption… cont.• What is the quality of the product that
is being consumed? • Who consumes the product? What are
their demographics? (Age, income, educational levels, marital status, family size)
• Are these demographic segments growing or shrinking?
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2. Markets
• What is the current structure of the marketplace?
• Who is currently supplying these products to customers?
• What will be the reaction of these firms if a new firm enters the market?
• Can a firm compete with existing firms or other potential entrants?
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2. Markets ……cont.• What are the implications for a firm
who wants to expand its market?– What are the costs?– What revenues can be expected?
• Where are the markets (customers) located? Are they local, regional, national, or international? What will it cost to serve them?
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3. Distribution System
• Will it be necessary to provide delivery services?
• What delivery schedules will be required?
• What common carrier options are available?
• Should the firm provide delivery itself?• Should delivery equipment be
purchased or leased?
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4. Market Entry
• How will the product or service be introduced to the market?
• Will the product be marketed under the company’s name or under some other name?
• What will attract buyers? (Low prices, advertising, promotion, customer service, or some other method)
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5. Buyers
• Will you sell directly to consumers or go through a “middleman” buyer?
• What types of buyers will purchase the product?
• Where are they located?• What product specifications will they
require?
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5. Buyers ……cont.
• Have potential buyers expressed an interest in the product?
• What type of purchasing commitments are buyers willing to make?
• How reliable are the buyers?• What type of payment schedules will
be encountered? How severely will this affect the firm’s cash position?
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6. Selling Arrangements
• What type of selling services will you need to provide?
• Will you need to employ a sales force or go through a buyer?
• If you employ a sales force, how many people will this require? What is their compensation plan?
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6. Selling Arrangements ….cont.• How will they be selling the product? • What are the costs of these
activities?• Should you have sales offices located
throughout your geographic market area?
• Why have you chosen one method of selling activities over another?
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7. Prices
• Setting a price is a critical activity in the market portion of the study.
• The price must be high enough to cover all costs and provide you a profit, but low enough that customers will purchase the product or service.
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7. Prices ………cont• To help determine the price, look at:
– Past prices of the industry– Current price trends– Expectations of buyers (brokers)– Expectations of consumers– Quality levels of substitutes or
competitors• These factors only help you set a
price. They can’t set the price for you
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2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
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Sun cream on demand
What are the burning question related to the
market feasibility of this product?
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2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
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The burning questions about market feasibility of sun cream
1. How much variety is required in SPF ?2. What are the primary location for sales/need?3. Will customers change their mindsets/habits?4. How many (% & Vol.) people forget to bring SC?5. What are customers willing to do to receive the
product?6. What is the required dosing sizes?
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2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
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Choose a couple of the questions and discuss how you could test the
feasibility using a prototype10mins
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2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
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Protovate your market
Taking your own project and your list of burning
questions, design 2 market feasibility tests.
10mins
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2012Original material by Thomas J. Howard for course 42629 – Innovation and Product Development Department of Mechanical Engineering, The Technical University of Denmark
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Questions
?