Schwinn Cardio Product Line Case Study Jake Petersen, Director NPD, Nautilus 1
Sep 11, 2014
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
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150 Upright Stationary Exercise Bike
Fully Adjustable Perimeter weighted flywheel Quiet magnetic ECB resistance system 16 resistance levels
Two other models: 170 and A10
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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
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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
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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
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Nautilus
Amazon
Consumer
Sporting Goods Store
Consumer Consumer
Value Chain
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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?
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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
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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
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“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
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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
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“To Be”
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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
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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
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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
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The New Products
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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
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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