{"id":58610,"date":"2022-01-18T08:52:00","date_gmt":"2022-01-18T12:52:00","guid":{"rendered":"https:\/\/www.shortform.com\/blog\/?p=58610"},"modified":"2022-01-25T12:42:48","modified_gmt":"2022-01-25T16:42:48","slug":"blue-ocean-product","status":"publish","type":"post","link":"https:\/\/www.shortform.com\/blog\/blue-ocean-product\/","title":{"rendered":"How to Create a Blue Ocean Product That Sells"},"content":{"rendered":"\n

How do you design a blue ocean product? What is the key to creating a product<\/a> in a yet uncontested market? <\/p>\n\n\n\n

To begin brainstorming<\/a> ideas for a blue ocean product offering, think of a product or service your company already sells, to use as a starting point. To help you come up with product ideas, Kim and Mauborgne explore some different approaches you can take to brainstorming. <\/p>\n\n\n\n

Here are seven potential routes you could take to brainstorm a blue ocean product that sells. <\/p>\n\n\n\n\n\n\n\n

1. Consider Your Customer\u2019s Alternatives<\/strong><\/h2>\n\n\n\n

When creating a blue ocean product, Kim and Mauborgne advise you to consider what alternatives your customers have for achieving the goal that your product fulfills. Especially consider alternatives that achieve the same end by different means. What are the key characteristics that might lead them to favor each alternative? How could you combine key characteristics from different options to create a new alternative that\u2019s uniquely attractive?<\/p>\n\n\n\n

For example, rock-climbing gear and video games are very different products that perform very different functions, but they are often used to fulfill the same basic goal of connecting with friends in a thrilling environment.<\/p>\n\n\n\n

Considering Your Market Alternatives <\/strong>

In Crossing the Chasm<\/em><\/a>, Moore approaches this subject from a slightly different angle. Specifically, where Kim and Mauborgne invite you to consider alternatives as a way to brainstorm new innovations, Moore assumes you\u2019ve already got an innovative product, and considers alternatives from the perspective of figuring out where your product fits into the market. 

Thus, he advises that you think about what other functions your technology might be used for. For example, maybe you\u2019ve been competing in the electric vehicle market, but then you realize that you could use the same basic technology to make electric farm tractors. If nobody else is currently doing that, your product would provide unique value<\/a>.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

2. Consider How Customers Weigh Price Against Performance <\/strong><\/h2>\n\n\n\n

According to Kim and Mauborgne, there are often groups of companies within an industry that pursue a similar strategy based on a balance of price and performance. For example, luxury car brands like Ferrari and Porsche could be considered one strategic group, while budget car brands would be another.<\/p>\n\n\n\n

As with alternative industries above, consider what characteristics motivate your customers to buy from one strategic group over another, and then concentrate on delivering those characteristics while eliminating needless ones<\/strong>.<\/p>\n\n\n\n

(Shortform note: In Positioning<\/em><\/a>, marketing consultants Al Ries and Jack Trout<\/a> assert that product maturity is often a key characteristic in how customers weigh price against performance. They say that if a product or technology is new and unproven, people tend to favor budget versions, because they can try it out without risking as much money on it. However, if the technology is mature, they are more receptive to premium versions. You can apply this to your own blue ocean product strategy<\/a> by considering your product\u2019s maturity and pricing accordingly.)<\/p>\n\n\n\n

3. Consider Different Buyers in the Chain<\/strong><\/h2>\n\n\n\n

Kim and Mauborgne point out that when looking for customers, companies often target the person with purchasing power. However, sometimes this is a different person with different preferences than the actual user. Consider targeting the end user\u2019s pain points, or persistent problems, especially if they\u2019ve traditionally been ignored, to create a product<\/a> with unique value.<\/p>\n\n\n\n

Types of Buyers<\/a><\/strong>

One of the key elements of Moore\u2019s strategy is to identify a niche market<\/a> of customers who have a compelling need that your product can meet. Thus, Moore echoes Kim and Mauborgne\u2019s assertion that offering a unique solution to your customers\u2019 pain points is a recipe for success. Moore differentiates between three types of buyers<\/a>:

1) The<\/strong> economic buyer<\/strong> is the person who pays for the product or authorizes the purchase.

2) The<\/strong> technical buyer<\/strong> is the person who sets up the product so it can be used.

3) The<\/strong> end user<\/strong>, or functional buyer,<\/strong> is the person who uses the product once it\u2019s set up.

For example, suppose your son, who recently got his driver’s license, wants to take up off-roading, and he convinces you to buy a protective roll bar for his vehicle. You\u2019re the one who pays for it, so you\u2019re the economic buyer. The mechanic who installs the roll bar is the technical buyer. Your son is the end user, or functional buyer.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

4. Consider Complementary Products<\/strong><\/h2>\n\n\n\n

Kim and Mauborgne note that products are rarely used in isolation. Consider what happens before, during, and after your product is used.<\/strong> Is there friction between any of these activities? If so, can you provide a bundled solution that would make things run more smoothly? Bundling complementary products to your product\u2014even at cost\u2014may add additional value.<\/p>\n\n\n\n

For example, suppose you sell kitchen appliances, and you discover that your customers tend to juggle a phone or laptop while they\u2019re cooking because they\u2019re referring to recipes online. So you bundle a tablet PC with your appliances and provide a magnetic bracket to mount it conveniently on the refrigerator door.<\/p>\n\n\n\n

(Shortform note: The authors\u2019 recommendations for offering complementary products corresponds to another key element of Moore\u2019s strategy: assembling the \u201cwhole product.\u201d<\/a> Like Kim and Mauborgne, Moore points out that your core product offering typically only provides part of the whole solution that the customer needs. For example, if your product is a smartphone, they also need a data plan to make use of it. In cases where it\u2019s not practical to furnish the complete solution yourself, Moore recommends forming alliances with other companies who can provide the other pieces of the puzzle. This ensures that your customer can get the \u201cwhole product.\u201d)<\/p>\n\n\n\n

5. Consider Adding Function or Emotion<\/strong><\/h2>\n\n\n\n

Kim and Mauborgne observe that most industries tend to gravitate toward either functionality<\/em> or emotion<\/em>. <\/p>\n\n\n\n

For example, cosmetics tend to lean heavily toward emotion: They are designed and marketed under the assumption that people will buy them because they want to feel<\/em> beautiful. Meanwhile, house paint leans more toward function: It is designed to provide objective benefits like durability, ease of application, and the ability to precisely match an existing color.  <\/p>\n\n\n\n

To innovate your product, Kim and Mauborgne recommend that you consider making an emotional product more functional <\/strong>by stripping away emotional trappings, or making a functional product more emotional.<\/strong> So, to continue our examples, what if you took a more objective, \u201chouse paint\u201d approach to selling cosmetics by citing how long-lasting a product is? Or what if you created a line of \u201ccosmetic\u201d house paint that (together with your advertising) makes homeowners feel better about themselves and their homes for using it?<\/p>\n\n\n\n

(Shortform note: Be careful not to go too far in the direction of functionality\u2014sales expert Oren Klaff argues that to pitch a product successfully to a prospective customer, you must appeal to the primitive, emotional side<\/a> of the brain first. Otherwise, it will filter out your message, and it will never reach the rational part of the brain. In light of this, making a functional product more emotionally engaging makes sense, but stripping away emotional frills to make a product more functional could be a risky proposition. If taken to the extreme, it might make it difficult to sell.)<\/p>\n\n\n\n

6. Consider the Impact of Trends<\/strong><\/h2>\n\n\n\n

Kim and Mauborgne assert that trends can inspire blue oceans, but they caution that blindly projecting current trends and trying to keep up with them is not a blue ocean strategy. Instead, they argue that only trends meeting the following criteria are meaningful:<\/p>\n\n\n\n

  1. The trend must have a decisive impact on your industry. For example, if your business is building airplanes, trends in clothing fashion aren\u2019t likely to affect you.<\/li>
  2. The trend must be driven by forces or movements beyond your control (or your competitors\u2019 control), such that it\u2019s irreversible. For example, the trend toward globalization of commerce seems inevitable because it\u2019s driven by human nature and market dynamics beyond any company\u2019s control.<\/li>
  3. The trend must have a clear direction. If you can\u2019t tell where the trend is leading, then it\u2019s not useful. For example, trends in clothing fashion rarely follow a predictable trajectory.<\/li><\/ol>\n\n\n\n

    Once you\u2019ve identified the relevant trends, the authors advise you to consider what the market will look like if the trend is taken to its logical conclusion.<\/strong> Then assess how you could tailor your product to provide unique value to the new markets the trend creates.<\/p>\n\n\n\n

    The Key to Projecting Trends<\/strong>

    Management consultant David Mattin argues that there is a simple key to understanding trends so that you can use them to your advantage in business: Instead of focusing on how things change over time, learn what doesn\u2019t<\/em> change.<\/a> Understanding constants like human nature allows you to predict how new developments will play out.

    This principle relates to all three of Kim and Mauborgne\u2019s criteria for useful trends:

    1) First, the experience and expertise you\u2019ve gained in your industry so far is something you can\u2019t go back and change. This is one reason to focus only on trends that impact your line of business.

    2) When a trend is irreversible, it\u2019s usually because the forces driving the trend are based on unchanging principles. If you understand the timeless constants of human nature, you\u2019ll be in a good position to assess whether a trend is reversible or not.

    3) If you understand the constant forces that are driving a trend, you\u2019ll be able to extrapolate it to its logical conclusion. Understanding what won\u2019t<\/em> change is what allows you to predict what will, making the trend\u2019s direction clear.<\/td><\/tr><\/tbody><\/table><\/figure>\n\n\n\n

    7. Consider the Needs of Potential Customers<\/strong><\/h2>\n\n\n\n

    As you brainstorm ways to redefine the market, Kim and Mauborgne advise you to reach beyond existing demand and include potential customers<\/strong> in your assessment, as well as actual customers. If you can solve a problem that is preventing people from buying products in your industry, you may create a blue ocean product that attracts demand from both within and outside your industry. For example, drivers in rural areas generally consider electric vehicles out of the question because their typical driving distance is longer than the battery life of the vehicle. If you could produce an electric car that would go 600 miles between charges, you might be able to tap into a rural customer base.<\/p>\n\n\n\n

    The authors divide potential customers into three tiers:<\/p>\n\n\n\n