Chapter 7: Brand Value to a User
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Brand Val u e t o User
C HAPTER 7
B
R A N D
V
A L U E
T O
U
S E R
Users select a brand based on the economic return they expect to realize
from it. Each task addressed by the brand, if used, creates value for the
user. At any point in time, a brand has a specific value to a user based
on which functionality is used to accomplish a goal. Or, the
manufacturer may adjust the value by adding more tasks or make
existing tasks better. The value of a brand, for a specific user, is defined
as that users value for each of the tasks the brand addresses. Brand
value as are all value determinations in the UTSQ is established for
a specific time period. Over time the user may adjust the value of
specific tasks and/or the brand may modify the tasks addressed.
FRAMEWORK
Decreasing impact of increasing
functionality
As mentioned above, brand value changes according to needs of users
and actions by manufactures. User needs change based on their
requirement to realize economic value from the product. They may
need more functionality and/or need easier access to and execution of
existing functionality.
Manufacturers generally go for increased functionality by the addition
of new tasks rather than improving existing ones. Adding tasks
improves marketing by increasing the size of the checklist and is sexier
for the engineers.
If brand value is defined as the maximum economic value a user could
realize and if by improving tasks that already exist the product would
provide more value, the manufacturer has, by adding functionality
alone, decreased the brand value to some users. As functionality is
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HEURISTIC: LIMITED DURATION
OF FEATURE W ARS
In a new domain the brands tend
to compete with the feature list,
i.e. the number of tasks
addressed by the brand. As the
domain matures, the brands
compete more and more on
characteristics within a task
ease of use and/or intuitiveness
of interface, cost of ownership,
time required to get started, etc.
UTSQ, in the chapters that
follow, builds a model of user
return which shows why this
transition happens. But we can
provide this insight. As the
brands address a larger number
of tasks, the incremental value of
the next task added diminishes.
At some point the user-value
created by reducing the costs
associated with difficult to use
and thus expensive tasks
already addressed by the brand
becomes greater than the value
of new tasks. (The objective of
UTSQ is to instrument the user
value of tasks and the user
return on existing task. Thus
UTSQ aids the developer in
allocating resource to maximize
user return.)
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Brand Val u e t o User
added without regard to ease of use, the value of the brand diminishes
over time.
Brand value represents the maximum economic return a user could
realize. One of managements options is to increase the brand value by
adding new functionality to address additional tasks.
In each development cycle, management will add functionality to
address new tasks. As the total number of tasks handled by the brand
grows, the incremental value increases as the percentage of total value
the additions have decreases. This concept of new value as a percentage
of new plus current value is shown below.
Per cent value increas=
new value
[ new value current values]
Figure 7.1: Decreasing Value
Given that management is knowledgeable about the application
domain, it is expected that functionality addressing the tasks of the
greatest value is developed early. As depicted in Figure 101, this creates
a diminishing increase of new functionality.
Figure 7.2 - Diminishing Returns of New Tasks
The diminishing value of new features is a structural principle of all
software intensive system. However, it is a principle ignored by many
product managers. The temptation to compete via the feature list is
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Brand Val u e t o User
almost irresistible. New features of questionable value are added at every
development cycle.
INFRASTRUCTURE: DEVELOPMENT
STYLES
ECONOMETRIC MODEL
the Wild West cowboy
development style that served
The equation below develop the concept to user value and
the firm in winning the feature
implemented value. The user value is a core concept. Implemented
Wars most likely is a
dysfunctional style as the
value is more of a management planning tool.
application domain matures.
UTSQ provides metrics on how a
firm's development style is
User Value for Brand
serving Users.
The value V of a brand b for user u in period is calculated from
the sum of task t values for that user.
(7-1)
V b , u , = v u , T t ,
t T b ,
Where:
b ,
t T
handled by brand b
Task t in set of tasks T
period . See (6-5)
v u , T t ,
(6-1)
Chapter 6 developed the task/user econometric value concept. The
discussion focused on a user deriving value by performing a specific task.
(7-1) extends the concept of user valuation to all the sum of all tasks
addressed by a brand in a time period.
For user u in period , the set of tasks addressed by brand b fall into
one of three: Economic Value, No value and contingency Value.
The Econometric Value subset is comprised of all tasks t that user u
completed in the period Each of these tasks is valued by the user as
presented in Chapter 6 and (6-1).
The No Value subset is comprised of all tasks t that user u did not
use in period and never expected to use at the beginning of the period.
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This set of task capabilities is of no interest to the user.
The third subset is comprised of tasks t that user u did not use during
period but, at the beginning of the period, had some probability of being
needed. Thus, tasks in this set provided a value to the user even though
not used in the period. (In the multi-period model presented in Section
IV we will see that all tasks in future period are valued in this
contingency form.)
For task in the Economic Value subset:
v u , T t , = the full economic value defined in 7-1.
For task in the No Value subset:
v u , T t ,
=0
For task in the Contingency Value subset:
v u , T t ,
= A value greater that 0 but less than Full Economic
value. The value is most likely the probability user
u placed on having to accomplish task t in
period at the beginning of the period.
Note:
There is no free lunch. The cost model developed in Section III
will focus mainly on the user cost for a task in the Full Economic
subset. Establishing cost for these tasks is complex. In addition,
costs models for No Value and Contingency Value tasks is
developer.
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