New Product Performance Prediction System Using Relationship Matrices

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Solution Overview

Problem

Retailers face challenges in predicting the performance of new products and their impact on adjacent products when introducing them to existing shelves, leading to potential cannibalization and diminished sales, as they lack reliable data and historical sales data for new products.

Innovation Solution

A system that uses a product hierarchy tree, relationship matrices, and attribute trees to calculate impact parameters and performance metrics for new products, considering distribution measures, geographic attributes, and channel placement, allowing for forecasting of sales and shelf space allocation before making decisions on product assortment changes.

Engineering Contradictions & Design Principles

VSEngineering Contradiction Analysis

1Productivity

If a new product is introduced to an existing shelf, then the new product may gain sales volume, but adjacent products may experience cannibalization and reduced sales

Engineering Contradiction:

Improvenew product sales volumeVSAvoidcannibalization effect on adjacent products

Core Design Contradiction:

ProductivityVSObject-generated harmful factors

Solution Approach 1:

The system performs preliminary analysis before introducing a new product by calculating impact parameters and performance metrics using relationship matrices. This allows retailers to predict cannibalization effects and make informed decisions about product assortment changes, shelf space allocation, and pricing strategies in advance, preventing harmful cannibalization before it occurs.

Inventive Principle:

Principle #10Preliminary action

Solution Approach 2:

The patent introduces an intermediary analytical system that acts as a mediator between the new product and existing products. This system uses relationship matrices and impact parameters to quantify and predict the interaction effects, allowing retailers to optimize product placement and assortment to minimize cannibalization while maintaining new product growth potential.

Inventive Principle:

Principle #24Intermediary (Mediator)

2Object-generated harmful factors

If product assortment changes are made to reduce cannibalization, then adjacent product sales may be protected, but aggregate sales and revenue may diminish

Engineering Contradiction:

Improvecannibalization reductionVSAvoidaggregate sales volume

Core Design Contradiction:

Object-generated harmful factorsVSProductivity

Solution Approach 1:

The system changes key parameters such as shelf space allocation, product positioning, and pricing strategies based on calculated impact parameters. By optimizing these parameters, the system can reduce cannibalization effects while maintaining or even increasing aggregate sales, rather than simply removing products from the assortment.

Inventive Principle:

Principle #35Parameter changes

Solution Approach 2:

The patent enables dynamic optimization of product assortment and shelf allocation based on real-time performance metrics and impact parameters. Rather than static decisions, the system continuously monitors and adjusts product placement and assortment to balance cannibalization reduction with aggregate sales maximization.

Inventive Principle:

Principle #15Dynamics

3Reliability

If retailers remove products from shelves to prevent cannibalization, then individual product performance may improve, but overall shelf productivity and sales may decrease

Engineering Contradiction:

Improveindividual product performance stabilityVSAvoidshelf aggregate sales

Core Design Contradiction:

ReliabilityVSProductivity

Solution Approach 1:

The system performs preliminary analysis using relationship matrices to predict the impact of product removal or modification before implementation. This allows retailers to identify optimal product combinations and shelf allocations that maintain individual product performance while preserving overall shelf productivity, avoiding unnecessary product removals.

Inventive Principle:

Principle #10Preliminary action

4Productivity

If product placement is optimized to increase aggregate sales, then total revenue may improve, but cannibalization between specific products may increase

Engineering Contradiction:

Improveaggregate shelf salesVSAvoidcross-product cannibalization

Core Design Contradiction:

ProductivityVSObject-generated harmful factors

Solution Approach 1:

The system optimizes multiple parameters simultaneously including shelf space allocation, product positioning, and pricing to achieve the dual objective of increasing aggregate sales while controlling cannibalization. By adjusting these parameters based on relationship matrix analysis, the system finds optimal balance points that satisfy both goals.

Inventive Principle:

Principle #35Parameter changes

Data Source

PatentUS8543446B2Methods and apparatus to predict new product performance metrics

Publication Date: 2013.09.24 NIELSEN CONSUMER LLC

AI summary

Methods and apparatus are disclosed to predict new product performance metrics. An example disclosed method includes selecting a product hierarchy tree based on a distribution measure for a new product, identifying a segment location of the product hierarchy tree for the new product, retrieving a relationship matrix associated with the segment location of the product hierarchy tree, the relationship matrix comprising available product performance coefficients and attribute information, identifying a spatial location for the new product in the relationship matrix based on the attribute information, calculating, using a programmed processor, an impact parameter based on the spatial location within the relationship matrix, and calculating the performance metric for the new product based on the impact parameter and a channel sales value.