Reflection: Week 6

Tuesday: Phone Soap Analysis

Two Business Models: Which category does Phone Soap fall into? Two Sharks have different viewpoints. Mark Cuban thinks that Phone Soap can be a margin business whereas Lori thinks Phone Soap would perform better as a volume business.

Volume Business:

The volume business model states that a particular product sells in a given market because the market segment has a lot of people who are willing to buy the product, but will not spend a lot of money on it. The business, therefore, makes a low margin on each product, but is able to compensate by selling a large number of products.

Margin Business:

The margin business model says that a particular product sells in a given market because, even thought the market segment is relatively small, consumers are willing and able to spend a lot of money on the product. Therefore, the business makes a high margin off every product sold.

 

Limited Decision Making Process:

If Phone Soap were to be sold as a consumer product, it would be categorized as a limited decision making product. I will use the example of a consumer purchasing Phone Soap in Staples, a location the product is current sold at, to demonstrate the consumer buying process:
(1) Need Recognition: The consumer might not recognize their need for the product until they see it on the shelf at the store
(2) Information Search: The consumer will read the packaging and learn that their phone is 18 times dirtier than a public toilet. 
(3) Evaluation of Alternatives: Since this is a limited decision making product, the consumer may walk over to the cleaning isle and ask themselves what cleaning products could be used to clean their phone that are less expensive.
(4) Purchase: If the consumer recognizes the value of the product, they will purchase it!
Easy enough, right? Now, lets look at Phone Soap as if it were a business product. 

New Buy:

If Phone Soap were to be sold as a business product, it would be categorized as a new buy because it is new to the market and businesses would be purchasing it for the first time. A "new buy" buying situation is equivalent to an extensive research consumer buying decision. I will use the example of a hospital purchasing Phone Soap to demonstrate the business buying process:
(1) Need Recognition: Someone, perhaps a nurse that works in the waiting room of a particular branch of the hospital, hears about the product and realizes there is a need for it at the hospital. The nurse believes it will help keep the hospital sterile.
(2) Information Search: After passing the need recognition onto her supervisor, the nurse will no longer be involved in the buying process. Rather, someone in administration is now responsible for conducting research and determining whether other wings of the hospital see a need for it too.
(3) Evaluation of Alternatives: The administrative employee will ask conduct further research
(4) Purchase: Most likely, the administrative employee will submit a purchase order to a purchase agent who might have to contact other departments, such as accounting, in order to receive the account number the purchase will be charged to.

Where does my SMART project stand? 

A heated steering wheel will most likely perform in a volume business because there is a large market segment with the need for a heated steering wheel. I also think that the demand for the product would decrease if the price of it was high. Additionally, our heated steering wheel could be classified as a business product. For example, Stop and Shop delivery truck drivers have the same need for a heated steering wheel that regular automobile drivers do too, but I think the better option is to classify the wheel cover as a consumer product. I think it is more likely that a consumer will buy the wheel than a business.

Thursday: 

Market Research: 

During Thursday's class, we took a look at the surveys we created to conduct market research for the Phone Soap product. It was interesting to see what some groups thought were the most important questions to ask. We learned the importance of the order in which the questions are presented. It is best to start with general questions and get more specific as you go on. If the questions are too specific at the beginning, the people taking your survey might not continue through your other questions.

Additionally, we learned the importance of the word "and" as it pertains to a market research question. Using the word "and" in a questions is the equivalent of asking two questions. When you use "and" you will most likely end up with confusing results since the person taking the survey might respond "yes" or "no" instead of answering both parts of the question.

Finally, we learned that the best way to generate questions is through brainstorming. It is best to write down all possible questions first and then narrow down your list and put them in a specific order.

Value Proposition Canvas: 

Prior to the start of class, we were asked to watch a video that explained the concept of the value proposition canvas. The value proposition canvas is a tool used to help balance your product with the needs of the customer. It is important to note that the diagram shows a gap between the customer and your product. It is our job, as product developers in the SMART Project and market researchers, to find ways to close the gap between the customers and our product. Likewise, there exists a gap between the customer and the competition. While we are trying to bring our customers closer to our product, we are also trying to distance the customer from the competition. The best way to create space between the customer and our competition is to create value in our product. If we are able to create value,  then we will be able to stimulate habitual buying behavior from our customers--every company's dream.

SMART Project: ThermoWheel 

Our team met with our marketing consultant, Samantha Heffer, this week. The purpose of our meeting was to get her feedback about on our team memo, logo design, and market research. The most important outcome that came from this meeting is that we do not have enough market research. Sam gave us a variety of things to research such as how many new model cars come with heated steering wheels. It is important to look at those statistics because if new cars come with a heated wheel, our market size shrinks. Our team will be meeting over the weekend to conduct research and further refine the team memo.