Selling Blue Elephants: How to Make Great Products That People Want Before They Even Know They Want Them (Paperback)

The concept of Rule Developing Experimentation (RDE) should prove intriguing enough for any marketing manager looking to dive into the "blue ocean" of unstructured demand and untapped market space. The varying definitions of that ocean have led to RDE, the subject of this illuminating though somewhat presumptive book by market research mavens Howard Moskowitz and Alex Gofman. The source area of study will be familiar to anyone who has read W. Chan Kim and Renee Mauborgne's Blue Ocean Strategy: How to Create Uncontested Market Space and Make Competition Irrelevant and Chris Anderson's The Long Tail: Why the Future of Business is Selling Less of More, both works reflecting authors who feel that any venture into the great unknown requires some discipline. Using experimental psychology and adaptive management as their basis of argument, Moskowitz and Gofman offer seven steps toward successful produce launches: (1) Identify groups or classes of features that constitute the target product. (2) Mix and match the elements according to an experimental design to create a set of prototypes. (3) Show the prototypes to consumers and collect their responses on a rating question. (4) Analyze results using a regression module. (5) Uncover the optimal product by finding the best combination that has the highest sum of utilities. (6) Identify naturally occurring attitudinal segments of the population that show similar patterns of the utilities. (7) Apply the generated rules to create new products and services. The template is far easier to grasp in theory than in execution, a point validated by the co-authors who assume companies have a clear understanding of their value-add in the marketplace at a most granular level. The most challenging aspect is identifying the right breakdown of product features and then using the appropriate statistical formulas to recognize the response patterns in order to make tangible enhancements. Quantifying the process is an admirable effort by the co-authors, but it seems to apply easier to hard consumer goods than softer services. However, the more constructive argument relates to the shortcomings of the more nebulous findings to be produced from survey questions or focus group discussions, the traditional means of eliciting such customer-generated data. So much qualitative judgment, in particular, by marketing managers constrained by their own thinking, can hamper such findings as to render them next to useless, especially in an established marketplace. Moskowitz and Gofman point out how established name-brand companies who can afford to invest in RDE analysis (such as Hewlett-Packard and MasterCard) have yielded dividends from the approach. These companies typify markets that have become so saturated that the marketing leadership is forced to come up with new value propositions. This means testing a broad variety of feature combinations, and some may strike you as counterintuitive. It appears that the more combinations tested,

This is a good overview. It will give you ideas of how to rationalize a multi-product, multi-segment business to optimize it. A quick read - and keeps you up to date.

The authors argue Rule Developing Experimentation (RDE) is the key to developing new products. Unfortunately for shareholders, during the past 15 years marketers have dominated product development. The result: more than 90 per cent of product launches and re-launches fail. RDE is a process of designing, testing and modifying alternative ideas, packages, products, or services. It is disciplined. It reveals to the developer and marketer what appeals to the customer, even if the customer can't articulate the need. It contains seven steps: 1. Consider the problem; identify features that may comprise solutions. 2. Mix and match the features in experimental designs. 3. Show the prototypes to consumers. 4. Analyze their reactions. 5. Optimize your prototypes. 6. Identify attitudinal population segments. 7. Apply the rules to create new products. Howard Moskowitz is experimental psychologist in the field of psychophysics. Alex Gofman is widely published, technology-oriented experimental psychologist. They argue RDE delivers cost-effective actionable results tied to business directives. As a shareholder, I argue, RDE is worth a try.

When I first saw the title of this book, I was reminded of a skit I once saw featuring ventriloquist Edgar Bergin and Charley McCarthy. Charley asks Bergin "How do you kill a blue elephant?" and when Bergin asks the question, Charley's response is "Shoot him with a blue elephant gun." Charley then asks Bergin "How do you kill a pink elephant?" and after the straight line from Bergin, Charley's response is, "Squeeze him until he turns blue and then shoot him with a blue elephant gun." I laughed when I saw that memorable comedy bit and the fact that I can remember it decades later is an indication of how much of an imprint it made on me. The incongruity of that comedy bit has relevance to the message that the authors of this book are trying to make. Sometimes the making of a great new product is nothing more than taking an existing product (the pink elephant) and squeezing it so that it looks like a new product (the blue elephant). However, before that you need to know if there is a substantial market for the new product. In this book, the authors demonstrate a tactic that can be used to explore the possibilities for new products. It is called Rule Developing Experimentation (RDE) and it is a systematic process to develop and test new ideas for products or different ways to modify existing products to make them more desirable. The particular emphasis is on the development for a product that the potential market does not yet realize that it would want. As all marketing directors understand so well, this is an inherently complex problem. Nearly all businesses want to expand, and there is only two ways to do that. You can either sell more of your existing product line or develop new products. The strategy for the second requires a significant amount of predictive ability, which can only be generated by detailed study. The RDE process is a sound business strategy that can be applied almost anywhere. Several case studies of specific products are presented as examples of how things can be done, although the general tactics used are not specific to the product. If you have just attended a meeting where the CEO has said that your company must introduce new and profitable products quickly and you are responsible for it, there are two things that you should do. *) Sit down and take a few deep and relaxing breaths. *) Reach for this book. Both actions will help you solve the problem

This book is about using a systematic way to develop experiments, systematically gather the results of those experiments, and to intelligently analyze them to develop rules for use in product development, marketing programs, and even communications. This method they call RDE (Rule Developing Experimentation). The authors do not claim that this is a new idea, but rather that they have a better way of explaining it and demonstrating its power. They use business stories of developing new products for Maxwell House coffee, Prego spaghetti sauce, Vlassic pickles, and a variety of marketing programs to demonstrate what they are showing us. The authors, Howard Moskowitz and Alex Gofman, write clearly and with a great deal of conviction. My guess is that you will either find their style infectious or, if you are of a cynical bent, it will trigger a bit of naysayer in you. The basic steps to their method are: 1) Think about the problem and identify groups of features. 2) Mix and match the elements according to a special experimental design 3) Analyze the results gleaned from the experiments 4) Optimize according to the highest sum of utilities 5) Apply the generated rules to create new products, offerings, marketing programs, etc. Too often we grope in the dark looking for a bolt of lightening to flash out of the sky and show us the best way to compete in our market space. It rarely happens. Even with this method, most of the experiments will prove something one shouldn't do. However, something will have been learned, one will know more about the boundaries beyond which there be monsters, and one will gain more insight and skill in setting up future experiments. It seems convincing to me that this method can save time, money, and competitive position over the usually used random guesses that can consume entire companies when they are really wrong. The authors say that this can replace the facilitated focus group because they are a flawed method. While that might well be true, I can tell for sure that one can implement this methodology in a flawed way, as well. So, we should always be careful in how we use our tools and hesitate to blame the tool for using it improperly. Interesting.