White Paper - Quantifying Consumer Value for Improved Display Features
by Steve Marsland, Steve Jurichich (PhD) and Carl Cobb
August 27, 2007
What will consumers pay for improved display features in displays?
Investment in display technology has led to continued improvements in display performance. Yet there is little market analysis that quantifies critical market issues:
a) what will consumers pay for improved display features?
b) when a technology delivers several improved features, how do consumers value these feature packages?
c) how fast do consumers switch to improved displays?
d) how can consumer adoption be accelerated?
Accelerating the time-line for consumer adoption of new display technology is of critical importance to the developers of new technology. The time-line is also critical to companies incorporating improved displays in their products since the companies that can successfully lead the transition will gain market share and improved competitiveness.
Time and again a new, higher-cost, better-performing display technology took share from and eventually displaced an older, inferior technology. Examples abound:
The companies that anticipated these changes and leveraged them won market share and profitability. The companies that waited for the new technology to become cheaper than the old technology lost and in many cases went out of business.
MCG has developed a methodology to answer the key marketing questions and balance the equation between cost and price. This white paper explains this methodology which is broadly applicable to all display products and markets. MCG will continue to develop and enhance this methodology.
There are six steps to balance the cost/price equation and find the fast track as shown in the diagram below:
1) quantify what consumers will pay for improved features/feature sets (consumer value)
2) identify market segments (where consumers value features differently)
3) forecast performance improvements and model cost increases for each display technology alternative
4) find the winning alternative with the best value proposition to consumers by comparing consumer value to the forecast cost increase. This provides the target market segments for these architectures.
5) identify price points for fastest consumer adoption of the winning architecture and the consumer adoption speed at these price points.
6) perform sensitivity analysis to evaluate alternative scenarios.