AnnualResults
Market Studies
Underestimating the Dynamic Nature of the Market Led to Short-Term Strategy and Ineffective Spending
Static
Consumer Trends
Cost Structure
Competition
StaticDynamic
AnnualResults
Market Studies
Underestimating the Dynamic Nature of the Market Led to Short-Term Strategy and Ineffective Spending
Analyze Competitors’ Potential Moves to Strategically Launch New Products
Red, 7%Or-
ange,
60%
Purple, 31%
Green,
2%
STAR Market Share by Cummulative Value (Y1-
Y6)
1st TO STAR
MARKET
$2.07 MILLION
R&D COSTS
$3.3 Million
Marketing Costs
6 Additional Sales Hire
Competition Cost Structure Consumer Trends
Low
High
High
Competition Cost Structure Consumer Trends
CompetitorMarketing Spending
CompetitorProducts
Analyze Competitors’ Potential Moves to Strategically Launch New Products
Low Net Return for Epsilon-Targeted BallerCompetition Cost Structure Consumer Trends
TARGET EPSILON
$1.12 MILLION
R&D COSTS
$2.8 Million Marketing
Costs
BALLER RELAUNCH EXPENDITURES
0 1 2 3 4 5 6 7
-$1.5
-$1.0
-$0.5
$0.0
$0.5
$1.0
$1.5
$2.0
Net Contribution of Epsilon Targeted Baller
PeriodD
olla
rs (
Mill
ion)
Use Total Profit Equation to Determine if Net Return is Positive
Competition Cost Structure Consumer Trends
Product Baller Banness
Gross Margin 10% 25%
Year 2
Total Profit = ( Price –
Unit Cost x Volume )– Distribution
– Holding – Marketing
Use Total Profit Equation to Determine if Net Return is Positive
Competition Cost Structure Consumer Trends
Total Profit = ( ++Price –
--Unit Cost x Volume )– Distribution
– Holding – Marketing
Product Baller Banness
Gross Margin 10% 25%
Product Barack Bama
Gross Margin 36% 43%
Year 2
Year 8
Align Product Attribute Perceptions with Customer Needs
Year 5 Device Market Perceptual Map
Per
ceiv
ed S
peed
Val
ues
Perceived Complexity Values
Competition Cost Structure Consumer Trends
Others12%
Baller12%
Caster12%
Danil10%Faldo
16%
Gats12%
Gobble17%
Hammer10%
Year 5 Epsilon Market Share by Units
OthersBallerCasterDanilFaldoGatsGobbleHammer
Align Product Attribute Perceptions with Customer Needs
DATA
Yr. 3 Yr. 4 Yr. 5
R&D Product Release
R&D Timeline Schematic
Competition Cost Structure Consumer Trends
Choose Market Segments with Predictable Attribute Shifts
Competition Cost Structure Consumer Trends
1 2 3 4 5 60
1
2
3
4
5
0.200000000000001
1.3
2.3
4.1 3.9
2
Ideal Speed Value Changes for Epsilon
PeriodId
eal S
peed
Val
ues
1 2 3 4 5 60
1
2
3
4
5
1.5 1.4
0.699999999999999
1.8
1.11.4
Ideal Weight Value Changes for Beta
Period
Idea
l Wei
ght
Valu
es
Choose Market Segments with Predictable Attribute Shifts
Competition Cost Structure Consumer Trends
BAMA Fano Goober Dragon0%
5%
10%
15%
20%
25%
30%
35%
29%
19%
14%
9%
Y8 Leaders in Beta Segment by Units
Product Names
Mar
ket
Shar
e by
Uni
ts (
%)
Focus on In-Depth Analysis Prevented Rash Decisions and Led to Long-Term Strategy
Competition Cost Structure Consumer Trends
Year 40
2
4
6
8
10
12Budget Allocation
Sales ForceMarket StudiesR&D DevicesBlitz (MKT)Banness (MKT)Baller (MKT)
Perc
enta
ge (
%)
0 1 2 3 4 5 6 7 8-$5
$0
$5
$10
$15
$20
TeamRed Net Contri-bution
Period
Mill
ions
Competition Cost Structure Consumer Trends
Year 4 Year 60
2
4
6
8
10
12Budget Allocation
Sales ForceMarket StudiesR&D DevicesBlitz (MKT)Banness (MKT)Baller (MKT)
Perc
enta
ge (
%)
0 1 2 3 4 5 6 7 8-$5
$0
$5
$10
$15
$20
TeamRed Net Contri-bution
Period
Mill
ions
Focus on In-Depth Analysis Prevented Rash Decisions and Led to Long-Term Strategy
Create Long-Term Strategies by Analyzing Underlying Information in the 3Cs
Competition:Anticipate Changing Moves
Company:Analyze Cost Structure of Investments
Consumer:Align Products to Dynamic Trends