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In mid 2012, Nautilus (manufactures and markets exercise equipment) was seeing sales of its Schwinn Upright Bikes decline. A 6 person team was tasked with turning this around. Instead of continuing to interface with buyers at Dick's Sporting Goods and Sports Authority the team focused on their Most Important Customer, the consumer. As a result of uncovering the consumer's unmet needs, the team was able to make some key changes to their Upright Bikes. Three new versions of the A10, 170 and 130 Bikes were introduced in September, 2013 and sales are already up 2X. See what the team did, what they found out and what changes they made.
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1
Schwinn Cardio Product Line Case Study
Jake Petersen, Director NPD, Nautilus
Copyright Value Innovations, 2004-2013 All rights reserved 2
BackgroundMarch, 2012: Directors of PD and PM attend an MVI Workshop
May, 2012: Director of PD attends the first MCI Workshop
June, 2012: Sales of Schwinn Upright Bikes are declining Decision made to set up a project and use the VIP
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 3
150 Upright Stationary Exercise Bike
Fully Adjustable Perimeter weighted flywheel Quiet magnetic ECB resistance system 16 resistance levels
Two other models: 170 and A10
Copyright Value Innovations, 2004-2013 All rights reserved 4
Objectives Increase market share of retail Schwinn
Cardio Product Line What will it take to win in this highly
competitive market? Primary focus on consoles
Introduce the Value Innovation Process® to Nautilus
Uncover customer insights that can be leveraged on other products
Project Definition
Copyright Value Innovations, 2004-2013 All rights reserved 5
Deliverables “To Be” value curve from the perspective of
the most important customer (MIC) Elements ranked & compared to “Best in
Class” Plan for “HOW” to deliver on “To Be” value
curve elements
Project Definition
Copyright Value Innovations, 2004-2013 All rights reserved 6
Project Kick-off: 6/5/12Round 1 Interviews: 6/19/12Round 2 Interviews: 6/26/12Round 3 Interviews: 7/17/12Recommendations: 7/27/12
RKL Note: VIP cycle time, 7 weeks!!
Project Definition
Value Chain
8Copyright, Value Innovations, Inc 2004-2014 All rights reserved
Nautilus
Amazon
Consumer
Sporting Goods Store
Consumer Consumer
Value Chain
Copyright, Value Innovations, Inc 2004-2014 All rights reserved
9
3 Questions to identify the Most Important Customer
1. Who has to fix the problem?
2. Who loses financially?
3. Who sees the Value?
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 10
Who has to fix the
problem?
Who stands to lose
financially?
Who sees the Value?
Amazon X XSporting Goods Company X
Dept Merchandiser X X
Buyer X
User/Consumer X X XXX
The 3 Question Template
11Copyright, Value Innovations, Inc 2004-2014 All rights reserved
Nautilus
Amazon
Consumer
Sporting Goods Store
Consumer Consumer
Value Chain
Up until March, 2012 Nautilus talked exclusively to Buyers
In June, 2012 Nautilus determined Users/Consumers were the Most Important Customers
Value Curves
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 13
“As Is”
Low High# Programs
# Programs
IpodNo = 0, To Speakers = 2.5, Data = 5
SpeakersNo = 0, Yes = 5, Premium = 7.5
ConnectivityNo = 0, USB = 5, W ireless = 10
FanNo = 0, Yes = 5, Premium = 7.5
Console Looks1-10 Subjective
Screen SizeSmall = 2.5, Med = 5, Large = 7.5
Interface1-10 Subjective
TrackingNo = 0, Yes = 5, Premium = 7.5
Reading Rack1-10 Subjective
BrandNLS Survey PM '11 Unaided %
0.0 2.8 5.5 8.3 ##
1
2
3
4
5
9
10
11
Cardio ConsolesValue to Home UserNautilus FINAL
6
7
8
20
No
No
Yes
6
Small
No
7
20+
Data
Prem
Prem
8
Med/Lrg
Yes
11
Schwinn 840 Best in Class
Contextual Interviews
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 16
Seven interviews conducted over a five day period for rounds 1, 2, and 3
Two participants were paired in each interview
Participants were located across the United States, owned a piece of cardio equipment, and worked out consistently at home
Interviews were conducted via the phone for rounds 1 and 2
Round 1 interviews were recorded and transcribed
Contextual Interview Details
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Used Webex for round 3 interviews so that participants could see the concepts presented
Interview questions were sent out 2 to 3 days ahead of time
Participants were given a $100 gift card after the third interview
Contextual Interview Details
The New Products
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 19
“To Be”
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 20
Copyright Value Innovations, 2004-2013 All rights reserved 21
Low High# Programs
# Programs
IpodNo = 0, To Speakers = 2.5, Data = 5
SpeakersNo = 0, Yes = 5, Premium = 7.5
ConnectivityNo = 0, USB = 5, W ireless = 10
FanNo = 0, Yes = 5, Premium = 7.5
Console Looks1-10 Subjective
Screen SizeSmall = 2.5, Med = 5, Large = 7.5
Interface1-10 Subjective
TrackingNo = 0, Yes = 5, Premium = 7.5
Reading Rack1-10 Subjective
BrandNLS Survey PM '11 Unaided %
0.0 2.8 5.5 8.3 ##
1
2
3
4
5
9
10
11
Cardio ConsolesValue to Home UserNautilus FINAL
6
7
8
20
No
No
Yes
6
Small
No
7
Speakers
Prem
Prem
9
Lrg
Yes
7
20+
Data
Prem
Prem
8
Med/Lrg
Yes
11
Schwinn 840 To Be Best in Class
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 22
Primary Upgrade: Over-sized console with 26 total programs including a second displayAdditional Upgrades for the User:
Second console display MP3 music input port Speakers Console fan Water bottle holder Transport wheels Extra-wide seat Oversized pedals with toe straps Comprehensive warranty coverage
Copyright, Value Innovations, Inc 2004-2014 All rights reserved 23
1’ 33” Videohttp://www.amazon.com/Schwinn-100336-170-Upright-Bike/dp/B00D4LEEYA/ref=sr_1_1?s=sporting-goods&ie=UTF8&qid=1384297188&sr=1-1&keywords=schwinn+170+upright+bike
Copyright Value Innovations, 2004-2013 All rights reserved 24
The New Products
Copyright Value Innovations, 2004-2013 All rights reserved 25
What’s Happened?September, 2013 - Introduced: 3 Upright Bikes A recumbent bike An elliptical October, 2013 User feedback from Amazon..very positive 150 suggested retail price, $499. Offered
at $299 Sales up dramatically
Copyright Value Innovations, 2004-2013 All rights reserved 26
What’s Changed?Nautilus:Now doing face-to-face interviewsUse Value Curves on all projects even if the project is not going through the VIP