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# THE MARE MODEL - PowerPoint PPT Presentation

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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Presentation Transcript

### 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

• Estimate the superiority premium for the customer

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.

Component Steps

• How consumer needs can be met better?

Vonage: A Failed Technology Model

Component Steps

• How consumer needs can be met better?

• Barriers to Success

• Customer Related Barriers

• Market Related Barriers

Wallet Phone Then and Now

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.

### 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

### 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.

### BETTER MEETING NEEDS

Tools

Kim and Mauborgne’s Buyer Utility Table

Consumer experience analysis

### BETTER MEETING NEEDS

Tools

Henderson’s competing solutions table

### 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

FDA Survey of Eating Behavior

### 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

### 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

### CONSUMER BARRIERS

Primary Outputs

A summary evaluation of potential barriers that might lower the superiority premium

Tools

Switching Costs

Tools

Switching Costs

Tools

Switching Costs

Tools

Compatible

Tools

Compatible

Complex

Tools

Compatible

Complex

Observable

### CONSUMER BARRIERS

Tools

Compatible

Complex

Observable

http://www.cbsnews.com/stories/2009/06/22/national/main5101892.shtml

Tools

Compatible

Complex

Observable

Ease of trial

### CONSUMER BARRIERS

Tools

Infrastructure Analysis

### MARKET BARRIERS

Tools

Previous “Attempts”

### MARKET BARRIERS

Tools

Previous “Attempts”

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/

### MARKET BARRIERS

Tools

Previous “Attempts”

Market size

Cannibalization

### 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.

### MARKET BARRIERS

Tools

Previous “Attempts”

Market size

Cannibalization

Ability to deliver

http://thewondrous.com/30-stupidest-inventions-ever/

### MARKET BARRIERS

Tools

Previous “Attempts”

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.

### MARKET BARRIERS

Tools

Previous “Attempts”

Market size

Cannibalization

Ability to deliver

Superior competitor in wings

Distribution and support

http://www.inc.com/magazine/19810601/4639.html

### MARKET BARRIERS

Tools

Henderson’s Peripheral Vision

Segments

Roles and responsibilities

Different processes

Disjunctures

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.

Tools

Analogous Products

http://www.slingbox.com/go/home

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.