Frederic Iselin
hec.fr/iselin
© F. ISELIN, HEC PARIS
1
Price
1. Generate the highest possible value
2. Share the value
Value Proposition: price of an offer, mainly based on customers’ perceived value
© F. ISELIN, HEC PARIS
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Source: Strategor ; Iselin
© F. Iselin, HEC PARIS
1
1. Because too many new products fail
THE SEGWAY
Presented as “An alternative to the automobile”
Riders look like circus performers
Price: $5,000
BP: 10,000 units sold/week, vs. 24,000 ,
/
,
,
in 5 years
From BtoC to BtoB: police forces and urban tour guides
© F. ISELIN, HEC PARIS
Sources: Schneider & Hall ; Urbany
3
2. Because too many pricing policies are not relevant
Start‐up
p
Fast 50
5
Family B i
Business
Prices too high
42 %
33 %
30 %
Optimized prices
37 %
50 %
50 %
Prices too low
21 %
17 %
20 %
“The main point, when you assess a company, is its pricing power. If you can increase your price of 10% without loosing clients, you have a very attractive business. If you must make a prier before the 10% price increase, you have a non attractive business”.
Warren Buffet
© F. ISELIN, HEC PARIS
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Sources : Iselin ‐ de Beaumont ‐ Derangère
© F. Iselin, HEC PARIS
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1. VALUE FOR THE CUSTOMERS: Business Opportunities; VALUE FOR THE CUSTOMERS: Business Opportunities; g
; Competition; CPUV
p
;
Market Segmentation;
2. VALUE FOR THE COMPANY: Differentiation; Value sharing; Business model
3. A VIEW FROM THE FIELD: Results from research; A process
© F. ISELIN, HEC PARIS
© F. ISELIN, HEC PARIS
5
Incremental
I
t l
Radical
(X5)
Out of 108 companies
86%
14%
Turnover
62%
38%
Profits
38%
62%
6
Source: Kim & Mauborne
© F. Iselin, HEC PARIS
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Listen
© F. ISELIN, HEC PARIS
Dream
7
Look
© F. ISELIN, HEC PARIS
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Thanks to JP Detrie
© F. Iselin, HEC PARIS
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Not a solution looking for a problem! SEGMENTATION
Customers’ frustration
Market’s Gap
?
Manager's pain
Outside inputs: suppliers, new regulations, etc.
© F. ISELIN, HEC PARIS
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Unique
Commodity
Necessity
Discretionary
 The higher the need, the higher the value potential
© F. ISELIN, HEC PARIS
10
Source: Colvin, 2009
© F. Iselin, HEC PARIS
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Cell phones  a new need for privacy and other people’s quiet
A real life silent chamber for $3,500
Restaurants weren’t willing to give up the square footage
Nightclubs’ customers mostly shifted from voice calls to texting
Final loss: $650,000, lethal for most new ventures
© F. ISELIN, HEC PARIS
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Source: Schneider & Hall
Tips may not be a must:5 times more new entrants
in profitable markets  ROI < 30%
Opportunities exist in stable markets too
Opportunities exist in declining markets as well!
© F. ISELIN, HEC PARIS
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Source: Bryce & Dyer, 2007
© F. Iselin, HEC PARIS
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© F. ISELIN, HEC PARIS
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Source: WinMs
1. VALUE FOR THE CUSTOMERS: Business Opportunities; VALUE FOR THE CUSTOMERS: Market Segmentation; Competition; CPUV
Market Segmentation; g
;
p
;
2. VALUE FOR THE COMPANY: Differentiation; Value sharing; Business model
3. A VIEW FROM THE FIELD: Results from research; A process
© F. ISELIN, HEC PARIS
14
© F. Iselin, HEC PARIS
7
A starting point may lead to a dead end
Segmentation is a must, because resources (ex: driller and gasoline) must be optimized
© F. ISELIN, HEC PARIS
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Small, robust and disposable products, at low prices
at low prices
+ distribution
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© F. Iselin, HEC PARIS
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Collective use
A phone to keep in touch with my kids
A phone for teenagers (ex: Summer Camp)
A phone for foreigner A phone for foreigner
visiting friends
An emergency phone
A back‐up phone for my car
Low Implication
A phone for specific use (ex: Meetic)
A phone for Expatriates
A phone for Seniors, sponsored by their children
A phone that I can loose
A phone for interim workers
High Implication
Solo use
© F. ISELIN, HEC PARIS
Source: From B. Salha
17
Main Street
Mature
Main Street
Main Street
Early
Declining
End of
life
Enthusiast
Visionary
Early adopter
© F. ISELIN, HEC PARIS
More & more
Pragmatists
Early
majority
Majority
1st conservatives
18
Late Majority
Conservative
Laggards
Sceptic
Source : from G. Moore
© F. Iselin, HEC PARIS
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Main Street
Mature
Main Street
Main Street
Early
Declining
Early
Adopters
Enthusiast
Visionary
Early adopter
End of
life
More & more
Pragmatists
© F. ISELIN, HEC PARIS
Early
majority
Majority
1st conservatives
Late Majority
Conservative
Laggards
Sceptic
Source : from G. Moore
19
PRODUCTS
PIONNIERS
PIONNIERS ATTRIBUTES’
WINNERS
WINNERS ATTRIBUTES’
Photocopiers
Xerox – 3M
Speed + Resolution
Canon (BtoC)
Price + size + resolution
PDA
Apple (Newton)
Writing recognition
Palm (3Com)
Price + size + PC synchro
Laptops
Apple
Functionalities
IBM
Price + size
VCR
Ampex
High‐resolution recording
JVC –
Sony
Price + size + weigh
Online bookstore
Books.com
Ergonomic
g
Amazon.c
om
Price + ergonomic + availability
il bilit
Bikes
Triumph Harley Davidson
Speed + power
Honda
Price + size
Razors
Cuthroat Razors
High density’s steel + durability
Gilette
Price + disposable blades
+ ease of use © F. ISELIN, HEC PARIS
20
Source: From Buisson & Silberzahn, 2010
© F. Iselin, HEC PARIS
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A snowboard to whom?
© F. ISELIN, HEC PARIS
A gel against burns to whom?
21
Substrate soil‐‐free soil
growing
Anoraks
Buildings
LIQUID RETENTION
HEAT INSULATION
ULTRA‐FINE
ULTRA‐
GLASS WOOL
Aircraft
Hot
gases
Battery separators
SOUND PROOFING
FILTRATION
Cold
gases
Housing
Vehicles
Ear plugs
Liquids
© F. ISELIN, HEC PARIS
Nappies
22
Source: IdF Technologie
© F. Iselin, HEC PARIS
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1. VALUE FOR THE CUSTOMERS: Business Opportunities; VALUE FOR THE CUSTOMERS: Market Segmentation; Competition; Market Segmentation; Competition; CPUV
Competition; CPUV
2. VALUE FOR THE COMPANY: Differentiation; Value sharing; Business model
3. A VIEW FROM THE FIELD: Results from research; A process
© F. ISELIN, HEC PARIS
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The most successful launch in electronic products’ ever: 19.5M units sold worldwide
Y1,, @ €499 ((vs. IPhone = 6M))
A “New Market” between the laptop and a the smartphone?
Mostly comparable to PC and smartphone usages’, according to data (IPad’s usage in
France):
•
87% @ home; 91% for Internet access; 68% to watch videos; 53% for gaming
•
Most downloaded applications (18,5% each): books and games ((= IPhone)
Thus:
•
Cannibalization of the laptop (especially pocket PCs’) market
•
10% of users are willing to pay for online contents: not an usage’s innovation
•
Cannibalization of the press market
© F. ISELIN, HEC PARIS
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Source: Amiot
© F. Iselin, HEC PARIS
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There is no value without reference
The competitors should be determined by the
usage of the new offer
Breakthrough innovation  substitutes
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Why considering one single reference offer?

It is very complicated to benchmark with several competitors

Better than the best means somethingg
The Reference Offer may be used as the differentiation tool, except if:

Several usages are integrated by the new offer

The Reference Offer is not for sale on the
market
© F. ISELIN, HEC PARIS
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© F. Iselin, HEC PARIS
13
1. VALUE FOR THE CUSTOMERS: Business Opportunities; VALUE FOR THE CUSTOMERS: g
;
p
; CPUV
Market Segmentation; Competition; CPUV
2. VALUE FOR THE COMPANY: Differentiation; Value sharing; Business model
3. A VIEW FROM THE FIELD: Results from research; A process
© F. ISELIN, HEC PARIS
27
CPUV = Benefits – sacrifices (over time) / Reference Offer
Who are your “Angels”? Who are your “Devils”?
Perceived benefits: Mostly, response to dissatisfaction Perceived sacrifices: Mostly Transfer Costs
© F. ISELIN, HEC PARIS
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© F. Iselin, HEC PARIS
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Purchase
Delivery
Use
Supplements
Maintenance
Disposal
How long does it take to find the product you need?
How long does it take
to get the product delivered?
d li
d?
Does the product require training or expert assistance?
i
?
Do you need other products and services to make this product work?
Does the product require external maintenance?
Does use of the product create waste items?
Is it the place of purhase attractive and accesible?
How difficult is it to unpack and install the new product?
How effective are the product’s features and functions?
If so, how costly are they?
How secure is the transaction enviroment?
Do buyers hace to arrange delivery themselves?
themselves? If yes, how costly and difficult is it?
Does the product or service deliver far more power or options than
or options than required by the average user? Is it overcharged with bells and whistles?
How much time do they take?
How rapidly can you make a purchase?
How easy is it to dispose of the product?
How easy is it to maintain and upgrade the product?
Are there legal or environmental issues in disposing of the product safely?
How constly is maintenance?
How costly is disposal?
How much pain do How
much pain do
they cause?
How easy are they to obtain?
© F. ISELIN, HEC PARIS
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Source : Kim & Mauborgne;
CPUV = Benefits – sacrifices (over time) / Reference Offer
P
i db
fit M tl
t di ti f ti
Perceived benefits: Mostly, response to dissatisfaction Who are your “Angels”? Perceived sacrifices: Mostly Transfer Costs
Who are your “Devils”?
CPUV > PRICE
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© F. Iselin, HEC PARIS
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1. End consumer:
Get a cold drink quickly (‐15° in 3’) and keep it cold (> 30’) anytime and anywhere

CPUV “A”
2. Food Company:
Gain a boost from a dynamic product offering better margins

© F. ISELIN, HEC PARIS
1.
CPUV “B”
31
Source: M. Santii
Economic:
Reduction of costs
Exchange value in relation to the savings generated
Easily measurable, few risks (based on existing foundation)
2.
Amplification:
Extend the horizon, increase productivity and/or revenues
More difficult to measure
 But there is no value that is not perceived!
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© F. Iselin, HEC PARIS
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1. Underestimating sacrifices
2. Overestimating benefits
$5 Bn Investment: Nov 1998 ‐ Aug. 1999
© F. ISELIN, HEC PARIS
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Low HIGH Source : M. Santii ; Buisson & Silberzahn
HIGH Low © F. ISELIN, HEC PARIS
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Source: Santi
© F. Iselin, HEC PARIS
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80% of suppliers think their new offer provides clients with “improved use”
When resource allocation doesn’t match CPUV
© F. ISELIN, HEC PARIS
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Source : Millier
Define value attributes (i.e. “Why customers buy”?)
Value attributes depend on: Product or service, type of customer, country, etc.
The seller should put himself in the shoes of customers: DITLOC
h
ll h ld
h
lf
h h
f
© F. ISELIN, HEC PARIS
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Sources: Kelly & Coaker; Beckman & Barry; Santi
© F. Iselin, HEC PARIS
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VALUE ATTRIBUTES
Basic
Discriminating
Exciting
Positive (attractive)
CLIENT
ATTITUDE
Neutral (state of the art)
Negative (turn‐off)
© F. ISELIN, HEC PARIS
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Source: Mc Grath et MacMillan, Sometimes a sacrifice, sometimes a benefit
Breakthrough innovation: How to compare pricings?
Breakthrough innovation: How to compare pricings?
Integrating pricing in value attributes: missing one differentiation’ss lever
Integrating pricing in value attributes: missing one differentiation
lever
Price means value if it’s the only available attribute
© F. ISELIN, HEC PARIS
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© F. Iselin, HEC PARIS
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Reference Offer
Value Attributes
Criteria
weighting
CPUV
Product choice
5
8/10
40
Store locations
4
3/10
12
Store layout
4
5/10
20
Product quality
4
5/10
20
P od ct availability
Product
a ailabilit
4
7/10
28
Salesperson service
2
3/10
6
Mean CPUV
© F. ISELIN, HEC PARIS
Evaluation
E l
i
126
39
Source: From de Fresse de Montval
1. VALUE FOR THE CUSTOMERS: Business Opportunities; Market Segmentation; Competition; CPUV g
;
p
;
2. VALUE FOR THE COMPANY: VALUE FOR THE COMPANY: Differentiation; Differentiation; Value sharing; Business model
3. A VIEW FROM THE FIELD: Results from research; A process
© F. ISELIN, HEC PARIS
40
© F. Iselin, HEC PARIS
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© F. ISELIN, HEC PARIS
41
Source : Urbany
Reduce,, or eliminate the attributes that do not generate value
Reduce
for the customer, especially if they weigh on the costs
Raise or create new attributes to increase perceived value
© F. ISELIN, HEC PARIS
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Sources : Kim & Mauborgne; Mc Grath et MacMillan; Buisson & Silberzahn
© F. Iselin, HEC PARIS
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Value
‐
+
Restaurant Removed
Architecture A hit t
Salon Room size Reduced
Reception 24/24 Furnishing B d
Bed comfort
f t
Increased
Hygiene Silence Totally new !
Price
1 * 2 **
© F. ISELIN, HEC PARIS
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Source : M. Santi
1. VALUE FOR THE CUSTOMERS: Business Opportunities; Market Segmentation; Competition; CPUV g
;
p
;
2. VALUE FOR THE COMPANY: VALUE FOR THE COMPANY: Differentiation; Value sharing; Value sharing; Business model
3. A VIEW FROM THE FIELD: Results from research; A process
© F. ISELIN, HEC PARIS
44
© F. Iselin, HEC PARIS
22
Pricing: the best way to increase revenues
Impact on BP: credibility and founding needs’
Very difficult to change, both increasing or decreasing
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Source: Bertini & Gourville, 2012
Hypotheses:
 Product sold @ €100 X 1m units : € 100M of revenues
 € 30M of fixed costs
 € 60 of variable production costs per unit An increase of 5% on…
Pre‐Value
Post‐Value
Pre‐Profit
Post‐Profit
… leads to a profit increase of
Price
€100
€105
€10 M
€15 M
50%
Variable costs per unit
€60
€57
€10 M
€13 M
30%
Volume of sales
1 M
1.05 M
€10 M
€12 M
20%
Fixed costs
€30 M
€28.5 M
€10 M
€11.5 M
15%
© F. ISELIN, HEC PARIS
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Source : La strategie prix
© F. Iselin, HEC PARIS
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Pricing: the best way to increase revenues
Impact on BP: credibility and founding needs’
Very difficult to change, both increasing or decreasing
Increasing price may lead to a profit loss:
 Baggage fees: flying experience worse for everyone
 Carry on luggage vs. checking
 Security lines move more slowly
 Overhead bins fill quickly and beyond capacity
 Loading and unloading planes take much longer
© F. ISELIN, HEC PARIS
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Source: Bertini & Gourville, 2012
Costs based pricing
Pros: Quite easy process; Profit care
Cons: Don’t take CPUV in consideration
Competition based pricing
Pros: More easy process; “Collective wisdom of the Industry”; Low risks
Cons: Don’t take CPUV in consideration
Value pricing
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48
Source: Cram 2006
© F. Iselin, HEC PARIS
24
Strategic pricing
Price is an objective by itself: resource allocation must match
Nicolas Hayek requires a $40 pricing, vs. $75 for Asian quartz watches
Plastic vs. leather; 51 pieces vs. 150; Ultrasound welding vs. screws
Overall costs: ‐30 % Direct Approach
Especially if RO = DIY: PSM method (Price Sensitivity Meter) :
1. At what price level would you consider that the product will be a valuable purchase?
2. At what price would you think the product is expensive, but still may consider buying it?
3. At what price would you consider that the product is too expensive to buy?
4. At what price would you consider that the product is too cheap to show a good quality?
Optimal pricing: When the same amount of people find the price too high and too low (questions #3 and 4)
Questions #1 and 2: Acceptable ends
© F. ISELIN, HEC PARIS
Sources: Kim & Mauborgne, 2005 ; Cram 2006
49
Paying attention to price fairness:
F i
Fair
U f i
Unfair
Pricing insensitivity area: from 0.2 % (financial products) to 17% (cosmetics)
Amount of purchase / reselling price (BtoB) or income (BtoC)
Home Gym
Home Gym
+ DVD
Beware of Bundles:
51
49
35
65
Home Gym
Gym Membership © F. ISELIN, HEC PARIS
50
Gym Membership Source : Chernev 2012
© F. Iselin, HEC PARIS
25
Final price:
12 F
VAT 0,67 F
VAT: 1,33 F = +200%
Reseller 0,67 F
Reseller: 1,33 F = +200%
Logistics 0,25 F
4,38 F
Taxes 0,28 F
Brewer 2,00 F
Is it enough ?
Can Manuf. 0,50 F
Value created
Brewer: 0,4 F = +20%
4,09 F
7,62 F
Can Manuf.: 0,03 F = +20%
Costs
3,53 F
© F. ISELIN, HEC PARIS
ThermaGen: 1 F
Source : M. Santi
51
Reference Offer
Value Attributes
Criteria
weighting
NO « Premium »
E l
Evaluation
i
CPUV
Evaluation
E l
i
CPUV
Product choice
5
8/10
40
6/10
30
Store locations
4
3/10
12
8/10
32
Store layout
4
5/10
20
8/10
32
Product quality
4
5/10
20
8/10
32
P od ct availability
Product
a ailabilit
4
7/10
28
6/10
24
Salesperson service
2
3/10
6
8/10
16
Mean CPUV
© F. ISELIN, HEC PARIS
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52
166
Source: From de Fresse de Montval
© F. Iselin, HEC PARIS
26
Because the environment will lead you to set‐up low prices CPUV
Range of price
Costs
If CPUV > 30%, price > 29%
© F. ISELIN, HEC PARIS
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1 offer (Price > Costs)
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© F. Iselin, HEC PARIS
27
A software company, specialized in very complex processes (10 math experts
worldwide): how to optimize the storage of 70,000 containers in Hanoi’s harbor (4 to 9
in a row)
An emblematic start‐up in France: $200 M income, IPO
Customer’s were charged $2M: ROI within 2 months!

“One of the biggest frustration of my business life, but according to previous
major investments, my customer were not ready to share a significant amount of
this value with Us”
Does this story could have been different?
© F. ISELIN, HEC PARIS
55
1. VALUE FOR THE CUSTOMERS: Business Opportunities; Market Segmentation; Competition; CPUV g
;
p
;
2. VALUE FOR THE COMPANY: VALUE FOR THE COMPANY: Differentiation; Value sharing; Business model
3. A VIEW FROM THE FIELD: Results from research; A process
© F. ISELIN, HEC PARIS
56
© F. Iselin, HEC PARIS
28
1. VALUE FOR THE CUSTOMERS: Business Opportunities; g
;
p
;
Market Segmentation; Competition; CPUV 2. VALUE FOR THE COMPANY: Differentiation; Value sharing; Business model
3. A VIEW FROM THE FIELD: Results from research; A process
A VIEW FROM THE FIELD: Results from research; © F. ISELIN, HEC PARIS
57
1 196 managers 
280 completed answers
97 % alive start‐up
60 % IT
Average maturity: 5,4 years
50 completed answers (Fast 50)
59 completed answers (Family)
 60% industrial
 100% BtoB
© F. ISELIN, HEC PARIS
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© F. Iselin, HEC PARIS
29
5 / 19 questions to assess RO’s CPUV
0 pt.
1 pt.
2 pts.
3 pts.
Before
the
would
B f
h launch
l
h off your business,
b i
ld you say
that your prospects were unsatisfied with their
current offer?
Not at all
I don’t know
Not quite
Quite
Absolutely
Could you quote the value attributes
(productivity, ergonomics, etc.) of your reference
offer?
< 2 precise
attributes
2 precise
attributes
3 precise
attributes
Before your offer was on the market, did your
prospects bought an alternative product or
service?
No
Yes
Competitor
s from
All actors
t
off
other
your
industries industry
Do it
yourself
Who are your competitors?
Do you try to differentiate your offer from one
competitive offer, the one you consider the most
threat full?
© F. ISELIN, HEC PARIS
Not at all
I don’t know
Not quite
Quite
Both3
Absolutely
59
How did you conduct your market study (several possible answers, in %)?
80
72
60
40
20
17
Consulting Firm
© F. ISELIN, HEC PARIS
5
11
JE
Consultant
14
DIY
No Study
60
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30
Before you the launch of your new offer, would you say that your prospects were unsatisfied :
Absolutely? Quite? Not quite? No? Don’t know?
% of answers
Absolutely
27
Quite
16
40
8
Not Quite
Q
No
9
Don’t know
© F. ISELIN, HEC PARIS
61
Number of potential applications from technology considered (before launch):
1? 2 to 5? More than 5? Don’t know?
% of answers
16
2 to 5
2 to 5
1
59
22
More than 5
3
5
© F. ISELIN, HEC PARIS
Not any
62
© F. Iselin, HEC PARIS
31
Who were your targeted customers (during launch, top priority)?
Numerous? Highest Means? Highest WTP? Just ready to buy? Fastest Payers? Other?
% of answers
Numerous
25
Other
15
38
Just ready to buy
12
Highest WTP
4 6
Highest Means
Fastest Payers
© F. ISELIN, HEC PARIS
63
Number of targeted segments (during launch)
1? 2 to 3? 4 to 5? More than 5? 1? 2 to 3? 4 to 5? More than 5? Not Any?
Not Any?
% of answers
3 to 4
29
2
20
40
1
8
3
More than 4
Not any
© F. ISELIN, HEC PARIS
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© F. Iselin, HEC PARIS
32
95% of mature start‐up are aware of competitors
Type of competitors taken in consideration
Type of competitors taken in consideration
(several possible answers, in %)
60
62
45
30
29
15
26
18
Direct
© F. ISELIN, HEC PARIS
Indirect
DIY
Both 3
65
Do your customers need to make efforts (i.e. training, etc.), to be able to use your product or service (in %):
Absolutely? Quite? Not quite? No? Don’t know?
% of answers
N Q i
Not Quite
29
Quite
16
38
16
1
Absolutely
No
Don’t know
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66
© F. Iselin, HEC PARIS
33
HIGH Low HIGH Low © F. ISELIN, HEC PARIS
67
Source: Santi
Results from R&D are not used to create higher value
© F. ISELIN, HEC PARIS
Start‐up
Fast 50
Family Business
Higher Value
26 %
29 %
60 %
Identical Value
54%
54 %
36 %
Lower Value
l
20 %
17 %
4 %
68
Sources : Iselin ‐ de Beaumont ‐ Derangère
© F. Iselin, HEC PARIS
34
1 offer (Price > Costs)
© F. ISELIN, HEC PARIS
69
Premium
Economic
Low‐Cost
Oxymoron
Constraint
Me‐too
Dead‐Ends
Start‐‐up
Start
7 %
25 %
5 %
16 %
5 %
11 %
31 %
Fast 50
12 %
28 %
10 %
10 %
7 %
7 %
26 %
Family
Business
41 %
7 %
2 %
3 %
16 %
22 %
9 %
From 37% (Start Ups) to 50% (only) of relevant positioning
From 37% (Start‐Ups), to 50% (only) of relevant positioning
17% to 21% of products/services could be priced higher
Maturity implies:
 More Premium’s positioning
 Less Oxymoron's and Dead‐End’s positioning
© F. ISELIN, HEC PARIS
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Sources : Iselin ‐ de Beaumont ‐ Derangère
© F. Iselin, HEC PARIS
35
Nb of start up
Nb. of start‐up
% total
% total
Total
280
100
Best Support Score
93
33 %
Lowest VP’s Score
42
15 %
Best Best VP
VP s Score
Best VP’s
25
9 %
9%
Nb. of start‐up
Nb of start up
% total
% total
Total
280
100
Best Funding Score
156
56 %
Lowest VP’s Score
86
31 %
Best VP’s
Best VP
Best VP s Score
19
7 %
7%
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28% could position their price above their reference offer: 7% do it
Pricing based on:

Recommendations (customers, shareholders)
shareholders):: 25 %

Competitors: 21 %

Market study:
study: 19 %

Costs: 18 %

Value added to customers
customers:: 12 %

Others: 5 %
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0
1
2
3
Before the launch of your business, would you say that your prospects
were unsatisfied with their current offer?
Could you quote the value attributes (productivity, ergonomics, etc.) of
your reference offer?
Before your offer was on the market, did your prospects bought an
alternative product or service?
Who are your competitors?
Do you try to differentiate your offer from one competitive offer, the one
you consider the most threat full?
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1. VALUE FOR THE CUSTOMERS: Business Opportunities; g
;
p
;
Market Segmentation; Competition; CPUV 2. VALUE FOR THE COMPANY: Differentiation; Value sharing; Business model
3. A VIEW FROM THE FIELD: Results from research;
A VIEW FROM THE FIELD: A process
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1. FROM ASSETS TO APPLICATIONS
Cars? Planes? Boats
Boats??
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1. FROM ASSETS TO APPLICATIONS
2. CUSTOMER’S SEGMENTATION Applications/Markets/Early Adopters
 Shipyards? Shipyards’ suppliers? Owners
Owners? Insurers?
 Tanker owners? Super yachts owners?
Super yachts owners? Pleasance boating owners?
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1. FROM ASSETS TO APPLICATIONS
2. CUSTOMER’S SEGMENTATION Applications/Markets/Early Adopters
3. REFERENCE OFFER:
Identification & CPUV’s Evaluation
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1. FROM ASSETS TO APPLICATIONS
2. CUSTOMER’S SEGMENTATION Applications/Markets/Early Adopters
3. REFERENCE OFFER:
Identification & CPUV’s Evaluation
4. DIFFERENTIATION Eliminate‐Reduce‐Create‐Raise
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1. FROM ASSETS TO APPLICATIONS
2. CUSTOMER’S SEGMENTATION Applications/Markets/Early Adopters
3. REFERENCE OFFER:
Identification & CPUV’s Evaluation
4. DIFFERENTIATION Eliminate‐Reduce‐Create‐Raise
5. CHECK ON NO’s CPUV
Focus groups & quantitative study
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1. FROM ASSETS TO APPLICATIONS
2. CUSTOMER’S SEGMENTATION Applications/Markets/Early Adopters
3. REFERENCE OFFER:
Identification & CPUV’s Evaluation
6. COSTS’ OPTIMIZATION
Check consequences of differentiation
4. DIFFERENTIATION Eliminate‐Reduce‐Create‐Raise
5. CHECK ON NO’s CPUV
Focus groups & quantitative study
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1. FROM ASSETS TO APPLICATIONS
2. CUSTOMER’S SEGMENTATION Applications/Markets/Early Adopters
7. PRICE POSITIONING
Based on CPUV’s gap and costs
3. REFERENCE OFFER:
Identification & CPUV’s Evaluation
6. COSTS’ OPTIMIZATION
Check consequences of differentiation
4. DIFFERENTIATION Eliminate‐Reduce‐Create‐Raise
5. CHECK ON NO’s CPUV
Focus groups & quantitative study
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1. FROM ASSETS TO APPLICATIONS
8. GROWTH 
8. GROWTH  PRAGMATISTS
Crossing the chasm
2. CUSTOMER’S SEGMENTATION Applications/Markets/Early Adopters
7. PRICE POSITIONING
Based on CPUV’s gap and costs
3. REFERENCE OFFER:
Identification & CPUV’s Evaluation
6. COSTS’ OPTIMIZATION
Check consequences of differentiation
4. DIFFERENTIATION Eliminate‐Reduce‐Create‐Raise
5. CHECK ON NO’s CPUV
Focus groups & quantitative study
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There is no value that is not perceived
There is no value that is not relative
Use 1, or combine 2 levers (Value and Price), to differentiate
Use either: methodology, tools or spirit
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Frederic Iselin
hec.fr/iselin
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