Question

Successful new product creation is a collective achievement that requires the energy and commitment of multiple functions in the organization. Describe the Kano Model and explain how the Kano Model works to create new B2B products and services. Explain how, overtime, the model requires changes to new features/products. Include at least two examples of B2B products and/or services.

Answer 1

Kano Model:

Kano model developed by Dr. Noriaki Kano Developed in 1984 focused on product development and customer satisfaction. Kano says that the product is about the customer's emotions not just about its functionality.

The main purpose of the Kano model is to communicate 5 universal categories of customer requirements and how all product and services need to be aware of these requirements to remain competitive. The idea is to give extra or different to delight your customer with your enhanced or differentiated product or service. For example, if your car has a brake, it’s not unusual but if you get a car parking voice facility inbuilt it will give you’re a special feeling of the product.

The purpose is how to delight the customer by giving a little extra without adding to the cost of the product.

The Kano model works as follows:

The model assigns three type of attributes to your product and services which are as follows:

1. Threshold attribute (Basics): The basic facilities you assume will come with a product or service for example car will come with a steering wheel and brakes. These are the essential factors which are normally expected with a product and do not add any extra features to the product or service.
2. Performance attributes (Satisfiers): The little bit extra over and above that you get the product and services, for example, a free Wi-Fi with your hotel room instead of paid Wi-Fi. This will improve the level of customer satisfaction and will be weighed with the features of other similar product.
3. Excitement attribute (Delighters): These are the really exceptional or unexpected additions to a product or service which the customer as not expecting. For example getting a basket of fruits when you reach your hotel room complimentary enhances your happiness and creates customer delight. This extra service or feature will make the customer very happy and he will become a loyal customer and add to long-term sales and add to the “wow” factor. This will give you a competitive advantage and give long-term benefits to your investments.

The five steps involved in using the Kano Model to provide an excellent product and service are as follows:

1. Make a list of all features which a customer expects from your product and services.
2. Classify the list into three categories; basic, performance and excitement, you can also add a column for not relevant attributes.
3. The product should carry all the basic or threshold features and you can check how you can add some performance features too.
4. Make a cost-benefit analysis if you can add some excitement attributes without impacting your profit margins
5. Make a product or service with all basic attributes plus add-on performance and if possible excitement attribute to give competitive advantage without impacting price and profit margins.

The two B2B services which are a good example of Kano model are as follows:

• Air BNB: You travel across the globe and use various apartments from Airbnb network. The apartment which offers you a little extra maybe a list of nearby restaurants, nearby supermarket, a refrigerator with basic one-day vegetables, milk and fruits will make a customer extremely satisfied and will create a word of mouth publicity for your setup at negligible costs. Another apartment you use may have a broken down water heating system making you critical of his services and you will give it a negative rating and bad publicity.
• Air Flights: The traveler would prefer a safe flight and comfortable seating with the reclining facility if given a flatbed would create customer delight and encourage long-distance business customers to patronize it. On the contrary, if an airline with bad safety records gives you good prices you would just avoid the airlines. The Kano Model considers safety and seating comfort as primary for customers satisfaction, delight would be giving added safety features and more comfortable seats at the same price.

To sum it up each marketer and organization has to give a little extra to get a competitive advantage. The marketer have to continously analyse customers threshold levels and find ways to create customer satisafction and delight without impacting the organisation's bottom line.