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The Business Model Innovation Factory: How to Stay Relevant When The World is Changing by Saul Kaplan

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Chapter 9

Experimenting with Business Models in the Real World

Consumer product companies have long employed test markets to trial new products and new marketing campaigns in the real world before risking national or global rollout. Consumer product marketers have long looked for representative conditions and demographics as test markets to provide a good understanding of the way a product will be received by the market by simulating as closely as possible actual commercialization conditions. They don't rely solely on traditional market research studies including conjoint analyses to identify product feature trade-offs, customer surveys and focus groups, price sensitivity studies, and focus groups. Consumer product marketers want to know how the product will do in real market conditions. Marketing mix can only be optimized based on observing real market performance, not on the results of quantitative and qualitative market research reports and what consumers say they will do behind the two-way glass of a focus group facility. Real market experience is required. Why not employ the same approach to explore and test new business models?

It's easy to come up with new business model ideas on paper. It's easy to do pro-forma analyses of how a new business model might work. It's easy to write fancy reports embellishing the potential of a hypothetical new business model. None of these theoretical exercises matters without testing new business model concepts in the real world. Until a ...

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