First Looks: Selling Blue Elephants: How to make great products that people want BEFORE they even know they want them (English, Spanish, German, Japanese, Mandarin … Arabic, Dutch, Korean and Cantonese Edition)

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Can you remember the world before the iPod? How about the world before chunky tomato sauce or brown mustard? Many of these products came about not through focus groups and polling, but rather through research and development labs and marketers developing the products they knew customers would want, before customers knew they wanted them. Today your customers can actually help you create your next product. Rule Developing Experimentation (RDE) is a solution-oriented learning experience. RDE is the systematized process of designing, testing and modifying alternative ideas, packages, products, or services in a disciplined way so that the developer and marketer discover what appeals to the customer, even if the customer can’t articulate the need, much less the solution. The book begins by presenting best practices in the RDE from some of today’s top companies: HP, Prego, Vlasic, and Mastercard. It then goes on to examine RDEs use in innovation and design, and goes on to examine its possible uses in the international, political, bioinformatics, and finance areas. Filled with real-life stories, this book will change the way people think about selling to their present and future customers.

Everyone thinks they need to break rules, but Moskowitz and Gofman skillfully show us how to develop and use the rules to define new perspectives and make better business decisions in virtually any field. An absolute must-read for any businessperson facing fierce competition!

Sean Bauld, Executive Vice President, Global Head of Marketing, Sales & Trading, Reuters

Over the last 15 years significant shareholder value has been destroyed by insightful and creative marketers resulting in the shocking statistic that more than 90% of launches and re-launches do fail. Moskowitz and Gofman are serious geniuses who have dedicated their work to help all of us increase our chances of success significantly. RDE is a new tool that all marketers should acquire if they love their profession and are serious about creating shareholder value out of every launch.

Tex Gunning, Group Vice President, Unilever Asia

In a series of well-written and engaging examples, Moskowitz and Gofman vividly illustrate the value of a truly scientific approach to understanding what consumers really want. But more than that, they show how experimentation is not only the spice of life, but can spice up all of our lives.
This book is as much fun to read as it is informative, and it is as deeply rooted in psychology as it is in the science of marketing. They really deliver the goods!

Professor Stephen Kosslyn, Chair, Psychology Department, Harvard University

Weve been teaching business students how to understand the mind of their customers for a long time. Finally, the ordinary reader, as well as business people, social scientists, and politicians, can share in these tools. Moskowitz and Gofman have flattened the playing field with their book Selling Blue Elephants. I applaud you both. Two thumbs up.

Professor Subrata Sen, Professor of Marketing, Yale University

We are in an age of the next killer application and it is elusive. Selling Blue Elephants is an absolute must read for any business moving from strategy to execution. Howard and Alex have built a process driven engine (RDE) that delivers actionable results that have a direct tie back to business directives. Bringing reality from concept is the key ingredient to a successful business ideaSelling Blue Elephants is the cookbook.

Peter Tripp, Vice President, Strategic Programs Office Global Outsourcing and Infrastructure Services, UNISYS

This book is a must read for anyone challenged with showing that systematic experimental design does not start and end in R&D but should be ingrained in the corporate mindset.

Dulce Paredes, PhD., Director, Consumer Sciences, Avon Products, Inc.

Really great products and really huge successes dont come from focus groups! And if you simply rely on trial and error, or guesswork, youll lose far more often than youll win. Now, theres a solution: Rule Developing Experimentation (RDE), the first systematized, disciplined, solution-oriented business process of experimentation.

In Selling Blue Elephants, RDEs creators reveal how to systematically design, test, and modify alternative ideas, packages, products, and services, to discover offerings your customers will be passionate about…even if they cant articulate the need, much less the solution!

Discover the seven easy steps that take you from cluelessness to clarity in just days… sometimes even hours. Watch RDE succeeding in companies ranging from Hewlett-Packard to Campbells, MasterCard to Maxwell House… and learn how to get the same outstanding results yourself, one step at a time, every time!

  • Discover how the world works in your market
  • Reveal the hidden rules that define your next breakthrough product
  • Create prototypes that answer the right questions, fast
  • Get at the truths your customers dont know how to tell you
  • Use automated tools to streamline the entire process
  • Streamline your research, and get actionable answers in just days
  • Extend RDE value throughout the enterprise
  • From messaging to corporate communications to investor behavior

About the Authors

Howard Moskowitz is President and CEO of Moskowitz Jacobs Inc. He is a well-known experimental psychologist in the field of psychophysics and an inventor of world-class market research technology. Widely published in the scientific press, Dr. Moskowitz is known worldwide as the leading thinker and creator of advanced research technology in the area of new product and concept development.

His background includes a Ph.D. in Experimental Psychology from Harvard University and seven years as a Senior Scientist at the U.S. Army Natick Laboratories. In July 2004, he was elected as an IFT Fellow for his contributions in the field of food science and technology. He was also awarded the American Marketing Associations 2005 Charles Coolidge Parlin Marketing Research Award, regarded as the Nobel Prize of the market research industry.

Dr. Moskowitz has spoken widely at both scientific and market research conferences, and guest-lectured at leading business schools including Wharton, Harvard, Yale, and the University of Texas at Austin. He also appeared weekly from 2004-2006 on ABC News Now as The Food Doctor, highlighting the food industrys most exciting innovations.

Alex Gofman, VP and CTO of Moskowitz Jacobs Inc., is the architect of several globally-recognized market research technologies and holds multiple patents. Widely published in the scientific press on the topics of technology-oriented experimental psychology, he has led new methodologies and algorithms development as well as other aspects of MJI operations since joining the firm in 1992, and is lead developer and architect of its IdeaMap family of products. He holds a BS and a MS in Computer Science from Donetsk National Technical University, where he graduated Summa Cum Laude in 1981.

Contents

FOREWORD xi

ABOUT THE AUTHORS xiii

ACKNOWLEDGMENTS xv

INTRODUCTION 1

PART 1 MAKING MONEY 17

CHAPTER 1 HEWLETT-PACKARD SHIFTS GEARS 19

CHAPTER 2 MAXWELL HOUSES CALCULUS OF COFFEE 27

CHAPTER 3 DIALING UP DELICIOUS: MAJOR DISCOVERIES FROM VLASIC AND PREGO 47

CHAPTER 4 HOW TO MAKE PEOPLE FEEL GOOD EVEN WHEN THEY PAY MORE 65

CHAPTER 5 DISCOVER MORE ABOUT YOUR COMPETITORS THAN THEY THEMSELVES KNOWLEGALLY! 87

PART 2 MAKING THE FUTURE 105

CHAPTER 6 RUBIKS CUBE OF CONSUMER ELECTRONICS INNOVATION 107

CHAPTER 7 BRIDGING COOL DESIGN WITH HOT SCIENCE 125

PART 3 FLYING TO VENUS 153


Review:

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, the more actionable the findings, all of which makes this a potentially expensive methodology. The co-authors are particularly effective in showing how such thinking extends to design elements, even packaging, in order to assess a product’s resonance on the marketplace. At times, I wish the co-authors would have toned down their use of superfluous jargon and their obvious pitch of ideamap.net as the source of their research software, but there is no doubt from this book that the subject of RDE is endlessly fascinating.

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