Jay Terwilliger of Creative Realities discusses Business Model Innovation

1. Business
Model
Innova6on
Jay
Terwilliger
October
31,
2011
Value
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
2011
|
Arizona
Biltmore
|
Phoenix,
Arizona
©Crea&ve
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2. How
We
Define
Innova&on
“Business
Innova-on
is
the
process
of
envisioning
and
successfully
implemen-ng
new
ways
of
doing
anything
that
creates
value
for
an
enterprise
and
its
customers”
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
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35th
2011
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Phoenix,
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29
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2,
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p.
2

3. NATIONAL
ACADEMY OF
ENGINEERING
Product
Development
and
Management
Associa6on
35th
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Innova6on
Management
Annual
Global
Conference
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29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
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29
–
November
2,
2011
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p.
3

4. What
was
Apple’s
biggest
innova&on
in
the
past
20
years?
Product
Development
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Innova6on
Management
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IArizona
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Annual
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5. A
Business
Model
Innova&on
-­‐
iTunes
The
Digital
Media
Store
that
enables
their
future
growth
Movies
TV
Shows
Podcasts
Music
Books
Apps
iTunes
U
Social
Networking
for
Product
Development
and
Management
Associa6on
Digital
Media
Over
800
Universi&es
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Innova6on
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5

6. PlaWorm
Trajectory
2011:
Online
store
2011:
Online
store
for
music,
movies,
TV
moves
to
the
shows,
podcasts,
University
courses,
cloud
books
and
more
2003:
First
legal
online
store
for
the
purchase
of
music
2001:
January
Music
Player
Applica&on
for
Apple
Computers
Product
Development
and
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Innova6on
Management
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29
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IArizona
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Annual
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6

7. A
Business
Model
-­‐
iTunes
Turns
just
another
computer,
mp3
player,
cell
phone,
tablet,
TV
adapter
into
compe&&vely
advantaged
plaWorms
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
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2011
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Phoenix,
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29
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2,
2011
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©Crea&ve
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p.
7

8. How
To
Envision
the
Future
and
Get
Tradi6onal
There
First
CRI
Future
Pull
Model
(Induc6ve)
(Deduc6ve)
4 1
1
Long-
Long-
3 Term
Future
History
3
Term
Future
History
2
Near Near
Present Present
Future Future
3 2
3
Not surprisingly, what the Sometimes, what the
organization does now is organization does now is
always relevant in this no longer relevant in this
future! future!
Product
Development
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Innova6on
Management
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IArizona
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9. Apple
Example
Year
01
02
03
04
05
06
07
08
09
10
11
iPhone
4
iPhone
iPodphoto
Nano
Digital
iPod
Touch
Hub
??
Enabler
App
Store
iTunes
Store
iPad
iTunes
Mac’s
iMovie
Apple
TV
iPhoto
iDVD
Product
Development
and
Management
Associa6on
GarageBand
P
PlaWorm
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10. Why
are
you
here?
• I’m
“interested”
in
the
subject
• Our
business
model
is
broken/under
aeack
• Our
world
is
changing
and
business
as
usual
isn’t
/won’t
con&nue
to
work
• Our
business
model
is
no
longer
profitable
• We
have
an
idea
that
won’t
work
in
our
exis&ng
business
model
• We
need
more
growth
than
just
new
products
can
generate
• We
have
latent
competencies
we
could
leverage
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Innova6on
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11. Here’s
the
Plan
• The
framework/context
for
this
session
• Crea&ng
Value
is
the
goal
• Let’s
iden&fy
some
new
Business
Models
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Development
and
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Innova6on
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12. What
is
a
business
model?
A
business
model
is
a
framework
Create
for
crea&ng
and
delivering
economic,
social
and/or
other
forms
of
value,
and
capturing
that
value
for
the
business.
Value
Why
is
this
important?
To
create
sustainable,
compe&&ve
advantage
Deliver
Capture
Product
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Innova6on
Management
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13. Think
in
3
dimensions
• Sustainable
Compe&&ve
Advantage
Create
happens
when
all
three
of
the
Value
components
are
aligned,
cohesive
and
working
in
harmony.
• A
new
business
model
can
be
created
in
an
exis&ng
space
by
changing
one
or
two
Value
of
the
three
elements….
Deliver
Capture
Product
Development
and
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Innova6on
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14. Successful
Business
Models
The
real
power
is
when
each
element
works
in
concert
Target
Need
Unique
Benefit
Create
Value
Resources
Revenue
Deliver
Capture
Ac&vi&es
Cost
Structure
Profitability
Product
Development
and
Management
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Innova6on
Management
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IArizona
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15. Think
in
Dimensions
What
Value
am
I
crea&ng…
for
whom?
What
How
do
I
best
resources
and
capture
that
ac&vi&es
will
value?
Transac&on?
best
deliver
Price?
that
value?
Costs?
Product
Development
and
Management
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Innova6on
Management
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29
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IArizona
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16. So
what’s
our
objec&ve?
1. No
one
“owns”
it
now
2. It’s
worth
owning
3. You
have
a
way
to
own
it.
1. You
are
the
“only”
player
• You
and
the
2. You
can
charge
enough
of
a
premium
customer
drive
price
to…
price
based
on
3. Recover
our
investment
&
value,
not
on
a
make
money
compe6tor’s
price
Source: Milind Lele, Monopoly Rules
Product
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Innova6on
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29
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17. Think
in
Dimensions
Create
Customer
Value
Proposi6on
• What
is
the
segment?
• What
are
their
unique
needs?
• What
can
I
offer?
• Is
it
meaningful?
• How
differen&ated
Deliver
Key
Resources
• Physical
Assets
(plant,
equipment,
loca&on,
etc.)
Value
Capture
• Human
• Organiza&onal
Profit
Formula
• Informa&onal
• Revenue:
• Etc.
• How
you
will
charge
• Cost
Key
Ac6vi6es
• What
it
will
cost
• Things
you
do,
how
you
do
them
Product
Development
and
Management
Associa6on
• Processes
35th
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Innova6on
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• Etc.
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18. Apple
iPod
The
“Offer”
• Cool,
Personal,
Portable
Music
The
product:
• Great
design
• Incremental
technology
99¢
-­‐69¢
30¢
The
Innova&on:
• Online,
digital
music
Value
Product
Development
and
Management
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Innova6on
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19. Ownable
Space
–
The
“Value”
Opportunity
Begins
with
a
clearly
definable
segment
with
enough
prospects,
an
unmet
need
and
money
to
spend
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
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29
–
November
2,
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IArizona
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20. The
Value
Proposi&on
Simply
put:
“Why
should
you
buy
my
offer
versus
someone
elses?”
Product
Development
and
Management
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Innova6on
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29
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IArizona
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21. The
Heart
of
the
Model
is
the
Value
Proposi&on
For target end user Describe
target
Who wants/needs Describe
compelling reason to buy
The Business Describe
Provides key benefit Describe
Unlike existing Describe
alternatives Uniqueness --
key differentiators, which may include a relative
price point
Product
Development
and
Management
Associa6on
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Innova6on
Management
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Conference
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29
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22. Ford’s
Automobile
Value
Proposi&on
"I will build a motor car for the great multitude... It will be so
low in price that no man making a good salary will be unable to
own one and enjoy with his family the blessing of hours of
pleasure in God's great open spaces.”
-- Henry Ford
1922
"The
day
will
come
when
the
whole
no-on
of
car
ownership
is
an-quated.”
-­‐-­‐
Bill
Ford
Great,
grandson
October,
2000
(If
you
are
guaranteed
mobility
on
demand
from
a
local
network,
will
you
s&ll
want
to
pay
for
a
car?)
Product
Development
and
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Innova6on
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23. Let’s
look
at
an
“easy,”
familiar
Industry
Car
Rental
Original
Industry
insight:
Air
travel
offers
people
a
way
to
travel
fast
from
point
A
to
Point
B…
and
then
they
have
no
way
to
get
to
and
around
their
ul&mate
des&na&on
(Unmet
Need).
Original
Industry
belief :
“People
need
to
rent
cars
when
they
travel”
Product
Development
and
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23

24. Industry
Value
Proposi&on
For target end user Travelers
(Primarily
Air)
Who wants/needs A
car
at
their
flight
des&na&on
compelling reason to buy
The Business The
Car
rental
business
A
range
of
vehicle
op&ons
at
Provides key benefit every
airport,
with
a
minimum
of
travel
interrup&on
and
hassle.
Unlike existing
alternatives Uniqueness --
key differentiators, which may include a relative Hertz:
Faster
(#1
Gold
reserva&on/
price point pickup)
Product
Development
and
Management
Associa6on
Avis:
(Beeer
service
“ Try
Harder”)
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25. The
industry
business
model
Create
Customer
Value
Proposi6on
• Quick
and
easy
personal
transporta&on
available
wherever
your
travels
take
you.
Deliver
Key
Resources
Capture
• 6500
loca&ons
worldwide
• 550,000
vehicles
Profit
Formula
• Airports
worldwide
–
prime,
on-­‐site
where
possible
Value
• Revenue:
• Pay
by
day
• Premium
for
one-­‐way
Key
Ac6vi6es
• Mileage
• Gold
–
go
to
directly
to
car,
agreement
• Gas,
insurance,
etc.
complete
at
car
• Gold
–
charge
your
card
• Buy
and
sell
vehicles
profitably
• Cost
• Worldwide
reserva&on
center
(1970)
• Instant
return
(1987)
• Buy
and
sell
“Fleets”
of
cars
in
Product
Development
and
Management
Associa6on
• #1
Gold
–
no
lines
or
paperwork
(1989)
close
rela&onship
with
35th
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Innova6on
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• Premium,
fun
and
specific
brand
vehicles
manufacturers
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• Hertz
Car
Sales
• Plate
Pass
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26. Which
eventually
led
to
commodi&za&on
• Faster/easier
• Beeer
service/
cleaner
cars
• Lower
price
• Etc.
Product
Development
and
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26

27. Time
for
Business
Model
Innova&on
• Where’s
the
opportunity?
• What’s
working/what’s
not?
• What
other
segments
exist/have
needs
that
could
create
value?
Product
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and
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p.
27

28. Enterprise
Changed
the
Game
Exis&ng
Industry
belief:
“People
need
to
rent
cars
when
they
travel”
Enterprise
Insight:
“People
need
to
rent
cars
when
they
are
at
home”
– Personal
vehicle
is
being
repaired
– Personal
vehicle
is
not
sufficient
for
temporary
need
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
28

29. Enterprise
Value
Proposi&on
People
who’s
vehicle
is
temporarily
unavailable
or
For target end user insufficient
for
need
Who wants/needs Convenient,
Temporary
compelling reason to buy Transporta&on
The Business Enterprise
Rent-­‐a-­‐Car
A
range
of
vehicle
op&ons
near
Provides key benefit your
home
Unlike existing We
are
local,
we
will
pick
you
up
if
alternatives Uniqueness -- you
need
it,
and
we
are
available
key differentiators, which may include a relative
price point
at
and
through
most
auto
repair
shops
or
dealers
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
2011
|
Arizona
Biltmore
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
29

30. The
business
model
Create
Customer
Value
Proposi6on
• Quick
and
easy
personal
transporta&on
available
where
you
live
and
need
it
Deliver
Key
Resources
Capture
• 5399
loca&ons
in
North
America
(within
15
miles
of
90%
of
U.S.
Pop)
Profit
Formula
Value
• Suburban
real
estate
in
smaller
• Revenue:
footprints
than
compe&&on
(closer
and
less
costly)
• Dealers
pay
as
loaners
• Insurance
Co’s
pay
as
temporary
replacements
• Low
cost
daily,
miles,
etc.
for
Key
Ac6vi6es
direct
customers
• We’ll
pick
you
up
• Cost
• Rental
through
auto
dealers,
repair
shops,
etc.
• Buying
power
of
purchaser
of
7%
(pick
up
and
deliver
there)
of
all
new
vehicles
in
U.S.
Product
Development
and
Management
Associa6on
• Insurance
pays
directly
35th
Product
and
telephone
reserva&ons
Annual
Global
Conference
• Online
Innova6on
Management
• Small,
rural
loca&ons
cost
less
to
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
own/operate
October
29
–
November
2,
2011
|
Phoenix,
Arizona
• No
“buses,
e0
©Crea&ve
Reali&es,
Inc.
p.
3 tc.”

31. Time
for
Business
Model
Innova&on
• Where’s
the
opportunity?
• What’s
working/what’s
not?
• What
other
segments
exist/have
needs
that
could
create
value?
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
31

32.
Value
Proposi&on
For target end user City
Dwellers
Frequent
transporta&on
without
Who wants/needs the
cost
and
hassle
of
car
compelling reason to buy ownership
in
a
city
The Business zipcar
“Wheels
when
you
want
them”
A
convenient,
hassle-­‐free
and
cost
Provides key benefit effec&ve
alterna&ve
to
owning
your
own
car
in
the
city
Unlike existing You
can
reserve
a
car
remotely,
alternatives Uniqueness -- pick
it
up
a
nearby
off-­‐street
key differentiators, which may include a relative parking
area
and
use
it
for
any
price point
length
of
&me
(over
60
minutes)
Product
Development
and
Management
Associa6on
you
need
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
2011
|
Arizona
Biltmore
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
32

33. Ownable
Space
–
The
“Value”
Opportunity
A
clearly
definable
segment
with
enough
prospects,
an
unmet
need
and
money
to
spend
The
Future?
The
Lease
The
Metro
The
Repair
&
The
Traveler
Temporary
Use
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
33

34. Tips
&
Tools
Are
you:
– Reinven&ng
your
exis&ng
Business
Model?
– Crea&ng
a
new
business
model?
– Suppor&ng
a
new
plaWorm
with
a
new
business
model?
Each
is
a
different
challenge,
with
different
assump&ons,
“sacred
cows”,
opportuni&es
Product
Development
and
Management
Associa6on
35
Product
Innova6on
Management
Annual
Global
Conference
th
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
th
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
34

35. Think
in
Dimensions
Create
Customer
Value
Proposi6on
• What
is
the
segment?
• What
are
their
unique
needs?
• What
can
I
offer?
• Is
it
meaningful?
• How
differen&ated
Deliver
Key
Resources
• Physical
Assets
(plant,
equipment,
loca&on,
etc.)
Value
Capture
• Human
• Organiza&onal
Profit
Formula
• Informa&onal
• Revenue:
• Etc.
• How
you
will
charge
• Cost
Key
Ac6vi6es
• What
it
will
cost
• Things
you
do,
how
you
do
them
Product
Development
and
Management
Associa6on
• Processes
35th
Product
Innova6on
Management
Annual
Global
Conference
• Etc.
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
35

36. #1:
Get
clear
on
theValue
Proposi&on
“If
you
don’t
know
where
you’re
going…
any
road
will
take
you
there.”
-­‐
The
Cheshire
Cat
to
Alice
in
Wonderland
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
36

37. Ques&ons
to
ask
yourself
• Is
the
segment
large
enough
(now/soon)
– (worthwhile)?
• Is
it
growing?
(Future
Trends)
– (sustainable)
• Is
the
problem/need
clear
and
important?
– (Importance)
• How
is
the
need
currently
being
addressed?
– (exclusivity/differen&a&on)
• Can
I
envision
an
“elegant”
solu-on
that
is
not
available
or
easily
duplicated?
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
37

38. Useful
frameworks
Map
the
flow
of
your
business
model
Organize
the
key
elements
of
your
model
Understand
Your
competencies
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
38

39. The
Business
Model
Map
• Visualize
your
business…
Map
it!
– Butcher
paper,
post-­‐its
and
your
imagina&on
– Start
with
your
target
&
needs
and
work
backward
• How
do
they
learn
about
you?
• How
do
they
interact
with
you?
• What
is
the
transac&on?
• How
is
it
made/fulfilled?
• How
is
it
delivered
– Where
do
you
add
value?
Where
would
a
partner
add
more?
• Change
it
–
Op-mize
it
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
2011
|
Arizona
Biltmore
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
39
p.
39

40. Business
Model
Elements
Framework
• Working
with
your
map,
consider
the
key
elements
of
your
Business
Model
• Consider
choices,
alterna&ves,
opportuni&es
to
innovate
• What
will
you
own?,
what
will
you
outsource/partner?
• Use
the
map
to
see
how
they
all
work
together
and
influence
each
other
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
2011
|
Arizona
Biltmore
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
40

41. Get
real
about
competencies
&
Value
Core
Future
Basic
Latent
• How
will
you
“own”
this?
– What
unique
power/value
do
you
really
bring?
– What
necessary
value
will
you
have
to
obtain?
• Objec&vely
assess
your
competencies
– Consider
competencies
in
four
“buckets”
– Kid
yourself
now,
and
your
will
pay
for
it
later.
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
2011
|
Arizona
Biltmore
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
41

42. Test,
learn,
refine…
Create
the
Value!
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
2011
|
Arizona
Biltmore
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
42

43. Let’s
Play
1. Pick
an
Industry
2. Iden&fy
a
Segment
with
a
Need
3. What’s
a
key
element
that
could
trigger
a
whole
new
business
model?
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
43

44. Example:
More
Cars
for
people?
• What
segments
might
develop?
– Seniors
–
who
can’t
afford
cars
the
way
they
used
to
– High
School
– College
– Global
workforce
• What’s
the
insight?
–
Value
Proposi&on
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
44
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.

45. End
p.
45

46. Business
Model
Innova&on
w/NPD
• The
following
story
is
for
use
if
the
subject
of
BMI
in
the
course
of
NPD
is
of
interest
to
a
significant
por&on
of
the
audience.
• It’s
of
a
client
who
engaged
in
Business
Model
innova&on
when
the
product
they
wanted
to
develop
was
not
possible
within
their
exis&ng
business
model
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
46

47. Think
beyond
the
product
• Situa&on:
– 80%
of
Bacardi
rum
sales
were
in-­‐home
use
– Only
17%
of
in-­‐home
use
was
in
the
types
of
exo&c
drinks
people
enjoyed
in
bars
• Problem/Need
– People
who
enjoy
exo&c
rum
drinks
in
bars
and
STOP
restaurants,
want
to
enjoy
them
at
home
but
find
it
too
difficult
to
make
a
quality
version
themselves
(Bacardi
Business
• Solu&on:
Model
doesn’t
– Create
quality,
all-­‐natural
exo&c
drink
mixers
fit)
(margarita,
pinacolada,
daiquiri,
mojito,
etc.)
• Result:
– Bacardi
receives
5%
of
mixer
sales
as
royalty
– Sales
of
rum
for
in-­‐home
use
increased
2-­‐3%
represen&ng
a
profit
of
$50
Million
annually
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
2011
|
Arizona
Biltmore
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
47

48. The
Heart
of
the
Model
is
the
Value
Proposi&on
For target end user Adult
Spirits
Users
when
at
home
Who wants/needs To
be
able
to
easily
prepare
restaurant/bar
quality
exo&c
drinks
for
personal
and
social
compelling reason to buy occasions
The Business Bacardi
Frozen
Mixes
business
All-­‐Natural,
quality
exo&c
drink
mixes
that
Provides key benefit you
just
add
the
rum
and
blend
Unlike existing Bacardi
mixes
are
all-­‐natural,
and
frozen
for
fresh,
quality
taste
that
is
not
available
in
alternatives Uniqueness -- alterna&ves
that
are
highly
processed,
high-­‐
key differentiators, which may include a relative sugar,
ar&ficially
sweetened
liquid
or
dry
price point forms
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
2011
|
Arizona
Biltmore
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
48

49. The
Basics
Create
Customer
Value
Proposi6on
For
Adult
drinkers
who
enjoy
exo&c
mixed
drinks
at
bars
and
restaurants,
but
can’t
serve
or
enjoy
them
at
home
because
they
are
too
difficult
to
make
and
exis&ng
mixes
are
of
poor
quality.
Deliver
Key
Resources
Capture
• Frozen
food
manufacturing
Profit
Formula
• Frozen
food
distribu&on
• Revenue:
• Supermarket
distribu&on
Value
• 5%
Royalty
on
every
sale
of
frozen
mix
• Incremental
2%
sales
increase
equal
to
$50
Million
Key
Ac6vi6es
• Cost
• Partner
• Minimal
A&P
Product
Development
and
Management
Associa6on
35th
Product
Innova6on
Management
Annual
Global
Conference
October
29
–
November
2,
Product
IArizona
BManagement
Annual
GArizona
35th
2011
| nnova6on
iltmore
|
Phoenix,
lobal
Conference
October
29
–
November
2,
2011
|
Phoenix,
Arizona
©Crea&ve
Reali&es,
Inc.
p.
49