Hello everyone. I'm James Lenz with the University of Illinois and I'll be your instructor with the course Quantitative Customer Insight Techniques. What I want to do in this first lecture is give you an overview of myself, a background about myself as well as an overview of the course. The course is set up in four modules. My background is I've worked in industry for the last 35 years on various machines and then part of that, I've been involved in over 100 new product developments. Just to give a little bit of background on some of the machines I worked on. One of the first ones was the space shuttle. Booster ignition and liftoff. I was working in St. Louis at the time. We developed the flight controls for the space shuttle, which involved three simultaneous computers and a fourth computer to do fault checking of that computer. After that, I also then worked on almost all the fighter jets, the F15, the F18, the Harrier, doing landing gear controls, flight controls, and other unique things such as building the windshield that can withstand bird strikes as well as other types of sensory systems for targeting different vehicles, and flying the plane in unusual patterns. After that, I worked with commercial airplanes. So, with Boeing 777, 757, 767, in fact, did the door control systems on the Airbus A380. I was involved in developing entirely new sensor for that, that enabled that airplane then to have very high reliability in its operations. After that, I worked with automobiles, worked with General Motors and Ford, with Honda, I'd worked on 127 new safety features involved in automobiles. The last 15 years of my career, I worked with what was called, off-road equipment, tractors, combines, and bulldozers. So, basically, if you log the speed of those vehicles and the time I worked on I mean it's sort of a slope that goes down. When I tell people, in order to keep up in your career today, it's hard to keep up with new people like yourselves that are coming into the industry with new ideas and new things. What I found is, the way I can keep up is to work on just slower and slower machines. As part of my work in industry, I've documented many of my ideas and thoughts about how you do new product development, and it's in a handbook that I've created. It will be made available to you through the course as well as it's available at Amazon, both in an ebook version as well as a paper version. If you like a paper version, you're welcome to go out and purchase it at the Amazon site. One thing about market research is when you look around you, you can see that this is needed and what goes on. As an example, I was just in Paris, two ice cream stores that were within 50 meters of each other. They both sell actually the exact same ice cream called, Berthillon, which is a well-known ice cream in Paris. Here's one store that's got people lined up waiting to get in and another store that just has one customer basically. Why does one business have ten times more customers than the other? What causes this? Well, this is what our course we're trying to understand is developing quantitative techniques to understand this customer behavior and how do we understand this? Another example, again in Paris, same thing but now it's a Falafel sandwich store. Here's one store that has 20 times more people lined up waiting for to order a sandwich, and about less than 50 meters away, like maybe you could almost see the other line, is this other sandwich shop that has just again one customer. What is the customer behavior? What have these two stores figured out? What does one really understanding the market preferences and the customer preferences in this marketplace? We'll be working on this type of problem and try to see how we can understand this better. And, of course, we want customers for our products that are like the long lines. In our course, we've developed this, we've broken up into four modules, idea generation, concept testing, test marketing, and estimating the size of the market. I'll go through each of these here in a second, but first, I want to just give you a little background again about the whole purpose of innovation and how does innovation work. So if you think about new product development, what I talk about and many people in business school talk about is the S Curve, it's when things first start from effort and they grow in time and at the end of this time, you have produced a new product. What's also fascinated me about new product development is what goes on before the S Curve, what happens before that. That's where I've built a career and an understanding of trying to illustrate this. This tends to be one of the great mysteries in business today, is putting a process and understanding behind what happens before this point. Through these courses, you're going to walk through this activity. Typically, this activity takes about 10 years, but we're going to do it here in a few weeks to get you through this activity of learning, what goes on before you can actually really do a product launch and develop product for the marketplace? There's three barriers, what I found in my studies and my own experience. Again, being involved over 100 new product developments. The first is what to start with. That's what the first module here will deal with is what to start with. The second barrier is identifying a true unmet need and this is a work that will lead to at the end of this course. The third barrier's establishing this risk versus benefits analysis so that you can really make a decision for launching that product. Another way to think about this as I call it, it's intervention plus commercialization equals innovation. It really is two activities. Typically, the invention activity goes on before the commercialization activity because it's less expensive. I showed this here with a little bit smaller bump. The cost of commercialization activity is actually sometimes twice even three times more expensive than the invention activity. In our first course here, we'll be going through this invention activity. This quantitative customer insight techniques is really targeted around understanding this technical feasibility and addressing these barriers of what to start with and identifying a true unmet need. In the course that follows this is called translating customer needs into a development plan and that course will then address the second major activity, the market feasibility of the commercialization activity of preparing yourself for a business plan that can lead to a product launch. In our course, this course on quantitative customer insight techniques, there's four modules. The first module is idea generation. I think it's just important for everyone to have an experience of coming up with an idea and exploring that idea, and understanding the business potential of that idea. I've lectured probably 200 times in various business schools around the world from China to Japan, to London and so on and I always ask the audience, have they come up with ideas? I'm always a little bit flabbergasted at how fewer people believe that they've come up with ideas. And I actually believe everybody comes up with ideas. So I want you to experience this a little bit. And maybe it's hard work. It is hard work coming up with ideas but this will be the activity of the first modules. Invention begins with an idea, innovation begins with an invention. So let's start with this idea. I'll be bringing this over and over back to you again and again is, what is your idea? Through this module, there'll be a couple of short quizzes and then an assignment of documenting your new product idea. We'll have a template for you to fill out that helps lead that assignment. The second module is called concept testing. In this module we'll explore methods. Again, the famous one is called conjoint analysis, to help you determine these customer benefits. An important part of understanding and thinking about your idea, is there's three more critical development issues. One is called technical readiness and one's is called product defined, how well is the product define. The third is the market forecast. We'll be giving you some tools and some insights to how to think about these factors and bring them to your own idea and analysis. Again, at the end of this module, there'll be some quizzes as well as there will be an assignment to prepare your own survey that you will use as part of this course. The third module is called test marketing. In this module, you'll learn many different tools and methodologies to how to collect data and analyze the data that's related to the market. From your survey idea, as part of the assignment will be to collect data against your survey. We'd like to do this survey on your own product idea but I found that to be difficult here in this online course environment. I've structured a very fun way I think for you to do this type of assignment and collect data and go through the experience of collecting data and analyzing data related to a market issue. The fourth module is then estimating the size of the market. This will show you techniques again about how to determine the sales revenue. Not only do you know if your product can make money, but you want to know how much money it can make. When I was working with another company in St. Louis, we're involved in a new product development and it wasn't enough just to have ideas and show that there was potential for sales, they wanted ideas that could generate $100 million of sales. Otherwise, they weren't interested in those ideas. As they were with some other companies some companies were interested in $5 million ideas so ideas that couldn't produce that size or revenue were just not interesting to them. It's interesting when you think of ideas. It's also important to understand the business potential of these ideas. That helps you set the types of organizations that are going to be interested in those ideas and so at the end of this module, there will be quiz or two during the module as well as some data analysis of the data that you've collected in the survey. The key word we want to use here is value add. What value add is there because of your idea? What market share can be attained with this type of idea? In summary, here, of the course, you'll be taken on quantitative customer insights techniques. You'll have your own product idea or maybe it's a service idea or maybe it's an app or so on. Again, I'll use the word product over and over again. But really, it can be anything, product or service is fine as an idea. Certainly, businesses are built on both of those methodologies. We'll also define a survey to evaluate the critical decision points. We'll collect data from your survey, and we'll determine the most important product features. And so, we'll do this in a way that the assignment will take you through one type of product. You'll be learning to apply it to your own idea and build your own idea. I'm hoping at the end of this course, if nothing else, you've got an idea that you can talk to your friends about, that you can say, "Hey, I understand the business aspect of this idea, and here's what the potential is." Probably in the process of doing that, you reinvented the idea two or three times or changed it or perfected it. It fits more into a customer need than what you first originally thought. Finally, the last thing about this course, is we'll prepare you for developing a business case as part of the following course, which is translating customer needs into a development plan. This course is really set up, as I showed you before, to help prepare you for the second major barrier associated with developing a new product, which is the market feasibility research. With that, is the end of this welcome or overview of the course, and we'll see you at the next lecture.
