Chp 2 Innovation: Concept Definition

Question 1

Aspects of Concept Definition

Answer 1

Intended target
group/segments
 Which segments can be identified?
 How attractive are these segments?
 Which segments should be served?

Intended positioning
 Which product attributes are relevant for potential customers?
 How are competitive products positioned in the market?
 Along which dimension should the product be positioned
in the perception of customers?

Unique selling proposition
 Which unique selling proposition (USP) should a product
deliver?
 Which positioning can help to differentiate the product
from competition?
Product features
 How should the attribute values be defined?
 What are requirements with regard to product design/aesthetics
and product image?

Question 2

Positioning

Answer 2

Positioning is the act of deliberately defining how you are the best at something [relative
to competitors] that a defined market cares a lot about.

Question 3

Positioning: 4 Styles of Framing

Answer 3

1. Dominate an existing category
2. Dominate a segment of an existing category
3. Reframe an existing category
4. Create a new category

Question 4

Positioning: Dominate an existing category

Answer 4

Use an existing frame and dominate the category
* Applicable to market leaders, difficult for startups
* Reinforces the way the category is defined currently
and the criteria that prospects currently use to pick a
solution
* This means establishing a strong presence and leadership position within a well-defined market category. Companies aiming to dominate an existing category typically focus on outperforming competitors in terms of market share, brand recognition, and customer loyalty.

Question 5

Positioning: Dominate a segment of an existing category

Answer 5

Use a sub-market frame and win in a niche category
* Use an existing frame, make the case for why you are
the best choice in a sub-market of the overall category
* Advantage: framing the product around something that
prospects already understand
* Disadvantage: target market is smaller than the entire
category

Instead of targeting the entire market category, this strategy involves focusing on a specific segment within that category and aiming to become the dominant player within that segment.

Question 6

Positioning: reframe an existing category

Answer 6

Re-frame an existing category to un-seat the leaders
* Also makes use of the existing Category
* Goal is to change the way the market evaluates solutions
in this category — in a way that disadvantages the
current leaders
* Applicable when there is an innovative breakthrough
(technology, business model) challenging the status quo
of a market (retaliation risk)

Reframing an existing category involves shifting the way customers perceive and understand that category. This could entail introducing new perspectives, emphasizing different aspects of the product or service, or challenging existing norms and assumptions associated with the category.

Question 7

Positioning: create a new category

Answer 7

Create a new category with an entirely new frame
* Often merging existing categories (or pieces of them)
and staking a claim to something completely new
* Need to convince the world that this new category
needs to exist and isn’t simply a sub-segment of an
older category
* Need to educate prospects on what the category is and
that they should care
* Opportunity to shape the boundaries of the category
and how prospects evaluate solutions in it (risk of
freeriding)

This paradoxical term refers to the process of introducing a novel product or service that is so innovative or disruptive that it essentially creates its own market category.Companies pursuing this strategy often aim to be pioneers in their industry, capitalizing on untapped opportunities and gaining a first-mover advantage.

Question 8

Psychological effects to consider regarding product positioning: Context effects

Answer 8

1. Attraction effect
2. Compromise effect
3. Substitution effect

Question 9

Attraction effect

Answer 9

The decision for A or B can be influenced by introducing C. C being a decoy so that the middle option is chosen.

Question 10

Compromise effect

Answer 10

consumers tend to buy the middle option between a high and low extreme

Question 11

substitution effect

Answer 11

Consumers more or less randomly
switch between similar alternatives. Introduce something similar but not dominating

By introducing C, market share will be taken from B.