DEFINING MARKETS FOR NEW MATERIALS Engineering Methodology with Case Application

An engineering methodology to identify profitable market segments for the use of new materials is presented and illustrated by application to the automobile industry. The method has three parts: empirical, statistical and analytical. The first measures company preferences for the important attributes of a use of a material, applying single-attribute utility functions. The second identifies market segments, by determining significant differences between measured preferences with t-tests. The third estimates the premium these market segments would pay for a product made of a new material, using multiattribute utilities, and thus determines profitable market segments. The case study of valve trains containing ceramic components defined two market segments: companies with either a broad world market or a narrow specialty. The immediate buyers of these valve trains are likely to be producers of high-value, six-cylinder automobiles, who seem prepared to pay a significant premium for this product. Defining Markets for New Materials Mangin et al.