funding_floor2_station4_designnotes

Content for Station 3 – Competitive Benchmarking and Pricing Content to be input || Info for SL Team ||  Note Card 1 - Introduction Welcome to the Competitive Benchmarking Station!
 * __Key – Info below these colored titles is as shown__**

Here you will take on the role of a developer for a new medical thermometer. As in previous stations, the focal device in this station will be the ear thermometer.

You will be comparing your product to two other thermometers, the digital and infrared, based on a set of differentiating factors. In this exercise, you will see our expert panel’s assessment of each thermometer‘s benefit to the customer along a set of key product features. This rating scale for each feature ranges from one (the lowest) to five (the highest). As you go through this exercise, you’ll be prompted to think about how __you__ would rate the products along these same dimensions.

This station depicts a race where each horse represents a type of thermometer. Product features for thermometers are shown in the blue blocks at the base of the race track. When your click on the bugle, the race begins. When the bugle sounds, you’ll receive a note card that shows our expert panel’s assessment of each thermometer’s rating for the upcoming product feature. The horses will move forward on the track relative to the feature score. The Score value above each horse will be the feature rating for that horse and the Total number will be the sum for the features rated thus far. When you click on the bugle again, a new set of ratings will emerge for the subsequent feature. At the end of the race, you’ll see the sum of the feature ratings for each product. The horse with the highest ratings will win the race! These feature totals can also be used to assist you in competitively pricing your product.

Now that you have been properly instructed, let’s begin! Follow the blinking arrows to the platform on your left and begin your activity by clicking on the bugle. Names for categories on left, attributes to label on top and prices. There items in yellow will be the names of the three horses. The 5 items in blue will be the attributes we are going base each ranking on so those would go at the top. || Point of Contact || Recall Capabilities || Read Out Time || Sterilization || Precision || ||  ||   ||   ||   ||   || Infrared || || Non-invasive || Last 10 readings || > 1 second || Not necessary || +/- 0.95° F || Ear || || Otic (ear) || Last reading || > 1 second || Replaceable probes || +/- 0.5° F || Digital || || Orally, rectally, or under the arm pit || None || 10 seconds || Hand sanitized || +/- 0.2° F ||  Attributes, ratings, and explanations The information that must be given to them or shown before they rate each attribute is depicted in the second column. Infrared || Non-Invasive || 5 || Ear || Otic || 3 || Digital || Oral, Rectal, Under Arm pi || 2 ||
 * __ Key Differentiating Factors __** ||
 * __ Thermometers __** ||
 * __ Thermometers __** ||
 * __Attribute 1 –Type__**
 * __ Thermometers __** ||
 * __ Type __** ||
 * __ Rating __** ||
 * __ Rating __** ||

Explanation The physical manner in which a thermometer takes one’s temperature is one of its most important features. The ratings above reflect a clear correlation between the thermometer’s comfort level and its competitive position in the market. The infrared thermometer came out on top in this category primarily because of the fact that no contact is needed between the device in the user for their temperature to be taken. The ear thermometer was second with a score of three because of the discomfort of the temperature probe in the user’s ear canal. Digital was next with a score of two due to the discomfort of the various measurement techniques Click on the bugle to move on to the next attribute. Infrared || Last 10 readings || 5 || Ear || Last reading || 3 || Digital || None || 1 ||
 * __Attribute 2 – Recall Capabilities__**
 * __ Thermometers __** ||
 * __ Recall Capabilities __** ||
 * __ Rating __** ||
 * __ Rating __** ||

Explanation Another feature of some thermometers is the ability to recall a certain number of previous temperature readings. This allows the user to track the progress of their fever in a more convenient manner. Again the infrared thermometer ranked highest with a score of five. It can store the last ten temperature readings taken, which can be extremely useful to easily document a user’s progression. The ear thermometer has the same ability to store temperatures, but only the last reading taken. This is still an advantageous feature but lacks the ability recall multiple readings and for this reason it receives a three. The digital thermometer is unable to store any readings, putting it at the lowest competitive level of a one. Click on the bugle to move on to the next attribute. Infrared || > 1 second || 5 || Ear || > 1 second || 5 || Digital || 10 seconds || 2 ||
 * __Attribute 3 – Read Out Time__**
 * __ Thermometers __** ||
 * __ Read out Time __** ||
 * __ Rating __** ||
 * __ Rating __** ||

Explanation The time needed to take an accurate temperature reading is another feature that can affect the competitive position of a thermometer. As shown above, a shorter read out time translates to a higher competitive score. The infrared thermometer takes less than a second to output a reading, giving it a rating of five. The ear thermometer also takes less than one second to give an accurate reading and therefore also receives a five. While the digital thermometer only takes ten seconds for a reading, this amount of time still puts the product at a substantial disadvantage, and thus receives a rating of two. Click on the bugle to move on to the next attribute. Infrared || No necessary || 5 || Ear || Replaceable probes || 2 || Digital || Hand sanitized || 2 ||
 * __Attribute 4 - Sterilization__**
 * __ Thermometers __** ||
 * __ Sterilization __** ||
 * __ Rating __** ||
 * __ Rating __** ||

Explanation Instruments that come in contact with the human body must be sterilized after each use. A user would always prefer a device that requires minimal physical exertion as well additional funds in order to sterilize their product. A higher competitive position in this case, refers to the thermometer requiring the least amount of money or the least amount of physical work needed to sterilize the device. The non invasive infrared thermometer requires no sanitation as it never come in contact with the body and is therefore in the most competitive position with a score of five. The ear and digital thermometers come in at a tie for second place with a score of two. While the ear thermometer requires no hand sanitization, it does require replaceable probes which costs the consumer money. It is fair to say that the market is split on whether they would rather hand clean their thermometer at no expense or forgo the effort in exchange for a small monetary fee. Click on the bugle to move on to the next attribute. Infrared || +/- 0.95° F || 1 || Ear || +/- 0.5° F || 3 || Digital || +/- 0.2° F || 5 ||
 * __Attribute 5 – Precision__**
 * __ Thermometers __** ||
 * __ Precision __** ||
 * __ Rating __** ||
 * __ Rating __** ||

Explanation Precision is another important feature a consumer would use when purchasing a thermometer. The higher the level of precision, the more competitive a thermometer can expect to be. The non invasive ear thermometer can range in either direction an entire degree which makes this product by far the least accurate and therefore receives a rating of one. The ear thermometer can be up to five tenths of a degree from a person’s body temperature, which is right in between the infrared and digital thermometers and as a result receives a three. The digital thermometer has an over under rating of two tenths of a degree making it by far the most accurate device. Click on the bugle again to view a final summary of the total ratings. After they have gone through the activity for all of the attributes and devices, they need to click one more time for the horses to move further to the right so the user can see the total ratings. This section will only contain the total ratings numbers. Note card 2 – Explanation of summation of ratings Having finished the rating process for all of the various features and thermometers, let us take a look at a summary of the results. || Point of Contact || Recall Capabilities || Response Time || Sterilization || Precision || Ratings Sum || Infrared || ||  5  ||   5  ||   5  ||   5  ||   1  ||   21  || Ear || ||  3  ||   3  ||   5  ||   2  ||   3  ||   16  || Digital || ||  2  ||   1  ||   2  ||   2  ||   5  ||   12  ||
 * __Final Ratings before Weighting __**
 * __ Key Differentiating Factor Ratings __** ||
 * __ Key Differentiating Factor Ratings __** ||

These final summations help to illustrate the competitive position of each different product. A larger score would indicate that this device contains features more beneficial to the consumer than other products. From the data you can see that your device came out right in the middle meaning it’s not as competitive as the noninvasive ear thermometer, but more competitive than the digital thermometer. Weighting of each Feature After they have received Note card 3, we will need a second set of horses to appear either above, below, or next to the row of current horses, but in their starting positions. We will then prompt the user to click to receive Note card 4. Note card 3 – Weight of each Feature Note Card Now that ratings have been given to all five of the attributes in question, it is time for one more step before we take a look at the final standings. You may have asked yourself during this process, is the precision of a thermometer really as important as the point of contact? The answer is no, and weightings are used to solve this issue. In the previous exercise, each feature contributed to twenty percent of the total rankings. In this portion we will manipulate those numbers to more accurately reflect the primary attributes a consumer uses when making a decision to purchase a thermometer. The weights of the five attributes you rated are given below with explanation from our expert panel. Point of Contact || 30% || Recall Capabilities || 10% || Read Out Time || 20% || Sanitization || 25% || Precision || 15% ||
 * __ Key Features __** ||
 * __ Weighted Percentage __** ||
 * __ Weighted Percentage __** ||

Point of Contact – The physical interaction between the thermometer and the patient is the first and most important feature to the user. This factor, more than any, affects the comfort level of the patient during use. Recall Capabilities – While this feature is handy, it is not essential for use and is merely a convenience that many consumers would overlook. Read Out Time – Again, this attribute directly effects the comfort of the user so it must be taken in to account but many users do not mind waiting an extra nine seconds for their temperature readout. Sanitization – While cost and physical effort are a deciding factor, the degree of sanitization is a feature every individual will use when purchasing a thermometer. Precision – Although the precision of a thermometer can be extremely important in certain instances, the vast majority of the market will be indifferent to a variation in tenths of degrees. Now that we have weighted each feature based on its importance to the consumer, let’s reevaluate where each product stands. Click on the bugle again to begin the weighted rating race. <span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: lime none repeat scroll 0% 0%;">Weighted Race At this point we can simply simulate the entire race, one attribute at a time, until the completion of the race. We will not to stop to give more information or cues in between each feature, as long as the race stops momentarily after each rating is given. <span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Note card 4 – Summation of Weighted Ratings || Point of Contact || Recall Capabilities || Response Time || Sterilization || Precision || Weighted Ratings Sum || ||  ||  Unweighted/(Weighted) || ||  ||   ||   ||   || Weighting || ||  0.3  ||   0.1  ||   0.2  ||   0.25  ||   0.15  ||   || Infrared || ||  5/(1.5)  ||   5/(0.5)  ||   5/(1)  ||   5/(1.25)  ||   1/(0.15)  ||   21/(4.4)  || Ear || ||  3/(0.9)  ||   3/(0.3)  ||   5/(1)  ||   5/(0.5)  ||   3/(0.45)  ||   16/(3.15)  || Digital || ||  2/(0.6)  ||   1/(0.1)  ||   2/(0.4)  ||   2/(0.5)  ||   5/(0.75)  ||   12/(2.35)  ||
 * __ Key Differentiating Factors __** ||
 * __ Key Differentiating Factors __** ||

Let’s take a look at the chart above to understand the weighted totals. Once each feature has been assigned a percentage the next step is to change each percentage to decimal form. Next, you will multiply each rating by this decimal for that specific feature. Although the sums of the weighted ratings are much smaller than the unweighted, the important part is to notice the percentages that these rankings hold of the total. As you can see from the results above, there was not a drastic change in unweighted and weighted ratings. This is primarily because the key features for each thermometer held the most weight. Although the summation of weighted ratings only differs slightly from the unweighted ratings, they give an even more accurate representation of the competitive position each device holds in the thermometer market. Now, the final step is to use these weighted rating totals to assist in the pricing of your product. Look to your right, and click on the floating dollar sign to learn more about pricing your ear thermometer. <span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: lime none repeat scroll 0% 0%;">Visual Cue for pricing note card I’d like a green dollar sign, next to the race (still in view), that when clicked on would give them the pricing note card below. <span style="-moz-background-clip: border; -moz-background-inline-policy: continuous; -moz-background-origin: padding; background: yellow none repeat scroll 0% 0%;">Note card 5 – Pricing Information When pricing your product, the first step is to determine your competitive position within the market. This was accomplished in the previous portion of Station 3 with the results of the weighted ratings of each product. Let’s take a look at how the total weighted ratings correlate to the actual price of each product. Final Weighted Ratings || Price || Infrared || 4.4 ||  $ 61.55  || Ear || 3.15 ||  $39.99  || Digital || 2.35 ||  $10.99  ||
 * __ Thermometers __** ||
 * __ Thermometers __** ||

At first it may be difficult to see a correlation, but if you look closely you can see an approximate twenty dollar jump per each weighted rating point. A “rule of thumb” or “back of the envelope” formula to help calculate the price would be as follows: 10.99 + 20.00(x) = Price of your product 10.99: Base Price X: Sum of weighted rankings minus one (base) Let’s take a look at how price, weighted and unweighted ratings all correlate graphically.