Innovation and Premium Marketplace Performance
In contrast, the process of innovation has often been characterized as an unmanageable, somewhat mystical art - the domain of design wizards who are somehow able to distill the essence of value from the "fuzzy front end". Over the years, this sort of thinking has fostered the implication that creating breakthrough products is more a matter of chance than the result of process.
PVMsm provides a simple structured approach to this seemingly unstructured and unbounded challenge of defining innovative, valuable products - a process that creates breakthrough next generation products that correlate with higher marketplace performance.
By using PVM, new product development professionals can meet their main goal through a systematic method to: 1) discover and organize what people value when they interact with a product, 2) translate that knowledge into a product definition which maximizes the product's value, and 3) create product concepts which embody that value.
Because PVM product concepts embody what people will value, they produce premium marketplace performance.
Benefits for Product Developers
For example, during the development of a new line of large industrial fork lift trucks, it became obvious that operators spent a significant amount of their time driving backwards. Since the normal seat position made it uncomfortable to turn around for long periods of time, drivers often did not make the effort to fully look where they were going, an obviously dangerous situation. Competing design concepts addressed this problem in several ways, but only one pemitted the operator to shift their position sideways and easily drive in both directions without changing their alignment with the pedals and steering wheel. Furthermore, some customers wanted this feature enabled to the left or right side and some wanted a conventional seat position, facing forward, depending on their operations. Manufacutring cost was, of course, also important. Only one new and very inexpensive design solution (that actually made manufacturing assembly operations easier) met all these requirements. The precise recognition of the value of a number of very different stakeholder product interactions, combined with rapid evaluations of a wide range of modeled design solutions, quickly identified the best solution.
Since a PVM specification contains a wealth of information to help the marketer understand what customers actually value, it provides the ultimate database for designing effective literature, sales presentations, and advertisements. Furthermore, since PVM Value Maps also provide detailed comparisons of competitive products, the marketer gains critical insights into the most powerful value-based product differentiation and value-based pricing decisions.
For example, after Apple Computer used PVM to independently confirm the original Powerbooks value advantage to customers, it then featured a summary of these PVM results in its world-wide product launch press release package and sales presentations.
PVM takes a major amount of the guesswork out of a new product's marketplace performance. The PVM "score" for a product or product concept correlates with the value that product will achieve in the marketplace, measured in straight financial terms of either market share or price and margin. The Apple Powerbook project, for example, provides hard evidence of this capability. A year after the original PVM scores were published, PVM scores were shown to have predicted the market performance of both the Powerbook and all of its major competitors - with a correlation of + .85 (P<.01).
PVM's raw value creation and predictive capabilites gave Holiday Rambler executives the confidence to release a radically new motorhome product line. That product line then increased in sales from $6M to $200M in 2 years, and the key innovation PVM introduced (Suite Slidetm) has now transformed the industry. For years Lincoln Electric has utilized PVM marketplace predictions as a standard metric in its new product decision making process. It is common to hear executives there say "It looks like a good design. But, what's the PVM Value Map say?"
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