Concept Testing Concept Testing Approaches Branding Decisions in Concept Testing Conjoint Analysis.

Concept Testing

Concept Testing ApproachesBranding Decisions in Concept

TestingConjoint Analysis

Concept Selection How can the team choose the best

concept (even though the designs are still being developed)?

How can a decision be made that is embraced by the entire team?

How can the “good” attributes of “weak” concepts be identified and used?

How can the decision process be systematic?

Selecting Concepts All teams use some method

first concept considered; external decision; product champion; intuition; voting; pros & cons; prototype & test; decision matrices

Potential benefits of a structured method include:

objectivity in decisions a customer-focused product a competitive design reduced time to product introduction effective group decision making and coordination documentation of process

Concept Screening & Scoring

Prepare the selection criteria and create the selection matrix

Rate the concepts Rank the concepts Combine and improve the

concepts Select one or more concepts

Step 1 Prepare Selection Matrix:

What are possible criteria for evaluating your “automotive dining” concepts? Ability to meet each interpreted need Manufacturing costs Market need, growth, size Compatibility with firm’s other products/culture Compatibility with firm’s current

technology Market competitiveness

(cost to maintain position)

Step 2 Rate the Concepts

Using a reference point Relative performance

much worse than reference = 1 worse than reference = 2 same as reference = 3 better than reference = 4 much better than reference = 5

Step 3 Rank the Concepts

Use criteria weights (if multiple segments)

Total score for each concept

Next Steps

4. Combine and Improve the Concepts

5. Select One (or More) Concepts6. Move on to Concept Testing

Evaluating with Customers Concept Testing

is used to help screen and refine new product ideas

Conjoint Analysis used to determine the combination

of attributes that maximizes appeal and to insure that customer needs are focused on throughout the project

Concept Testing A concept is composed of attributes

and benefits for a particular usage situation

Attributes incorporate a specific product form and technology

DetermineDetermineCustomerCustomer InterestInterest

see Page and Rosenbaum (1992), “Developing an Effective Concept Testing Program for Durables,” J Product Innovation Mgmt

The Concept Statement

The Customer Value Proposition: FOR {the ideal customer} WHO {have the following problem} MY PRODUCT IS A {product category} THAT {key differentiating benefit} UNLIKE {the major competitor}

UsageUsageSituationSituation CustomerCustomer

ProductProduct

The Concept Statement

Format Narrative

The Concept Statement

Narrative

The Concept Statement

Format Narrative Drawing / Diagram

The Concept Statement

Drawing/Diagram

The Concept Statement

Format Narrative Drawing / Diagram Model / Prototype Virtual Reality

Virtual Reality Information Acceleration http://www.wharton.upenn.edu/learning/

futureview/

Developing Concepts to Test

Time to prepareTime to prepare test materialstest materials

Number of itemsNumber of items testedtested 11MoreMoreMostMost

PreferredPreferred

LeastLeastPreferredPreferred

Paper &Paper &PencilPencil

ComputerComputer

PrototypePrototype

Working ModelWorking Model

e.g., www.acupoll.com

What is generally tested?

BUYERBUYER

Does it solve Does it solve a “problem”?a “problem”?

yesIs itIs it““believable”?believable”?

yesIs itIs it““unique”?unique”?

yes

Would it be Would it be bought at onebought at oneof several testedof several testedprice points?price points?

yes

Can measure potential customer reactions using: (1) 5-pt “definitely not” - “definitely” scales(2) sorting tasks

Considerations in the Concept Test

Core Idea vs. Positioning/Commercial Concept Statement

New Brand vs. Old Brand vs. No Brand Purchase Measure Decisions:

Buyer Intent Frequency Price

Product Diagnostics Attribute Diagnostics

Ask the right people...

time

SalesSalesThe ChasmThe Chasm

Early MarketEarly Market Mainstream MarketMainstream Market

TechnologyTechnologyEnthusiastsEnthusiasts

VisionariesVisionaries PragmatistsPragmatists ConservativesConservatives

See (1) Rogers (1995) Diffusion of Innovations (2) Moore (1991) Crossing the Chasm (3) www.chasmgroup.com

Lead U

sers

and In

novat

ors

vs. M

ainstr

eam

Mar

ket

Ask the right questions... How important is the product

“experience”? Does the customer have to “touch

& feel” the product to understand the benefits offered?

““Simulate” the ExperienceSimulate” the Experience

How can concepts be tested?

Focus Groups One-on-One Personal Interviews Mall Intercept Phone Interviews Postal Surveys Internet Surveys Hybrids (e.g., phone-mail-phone)

Compare in terms of:Compare in terms of:sample control, concept flexibility, costsample control, concept flexibility, cost

Compare in terms of:Compare in terms of:sample control, concept flexibility, costsample control, concept flexibility, cost

see: (1) Pope (1993), Practical Marketing Research (2) McQuarrie (1996) The Market Research Toolbox

Typical AnalysisCategory or Industry

Purchase Intent Concept Norm

Definitely Would Buy 27% 20%Probably Would Buy 43 40Top Two BoxTop Two Box 70% 70% 60% 60%

Might or Might Not Buy 22% Probably Would Not Buy 5Definitely Would Not Buy 3

Summary of Concept Testing Advantages

relatively easy to get customer input can be used as an early screen for new

product ideas

Limitations not that helpful for the design and

development of specific product forms not as reliable for discontinuous

innovations

Branding Decisions in Concept Tests

What is a Brand? Name, term, sign, symbol, or

design, or a combination of them intended to identify the goods and services of one seller or groups of sellers and to differentiate them from those of competition.” - AMA

Why Brand? Identify product Reduce risk Reduce consumer search cost Signal quality Legal protection Create product associations Differentiate product

Brand Equity Sources of Brand Knowledge

Brand Awareness Brand Image

Strength of Brand Associations Favorability of Brand Associations Uniqueness of Brand Associations

Types of Brand Associations Attributes

Product related Non-product related

Benefits Functional Experiential Symbolic

Attitudes

Why Extend a Brand? Immediate brand awareness Transfer existing associations Faster trial Reinforce core brand

Why Not Extend a Brand? “Boomerang” potential Dilution (e.g., Samsung) Bad “fit

Conjoint Analysis

Primary benefit in addition to (or in lieu of) concept tests:

forces a trade-off

Conjoint Analysis

Can be used to quantify the relative importance of attributes

Can be used to help determine the combination of attributes that maximizes appeal

Relatively easy for incremental innovation Requires experts or information

accelerationfor discontinuous innovations

see (1) Page and Rosenbaum (1987), “Redesigning Product Lines With Conjoint Analysis,” J Product Innovation Mgmt (2) www.sawtooth.com {Sawtooth Software}

Major Assumptions An offering is a bundle of attributes and

benefits. An offering can be decomposed into a bundle of “features” for which “utility values” can be calculated.

The utility value of an offering is some simple function of the utilities of the offering’s “feature” levels.

Customers prefer the offering with the highest utility value.

Conjoint: Steps 1 and 2

Identify Relevant Attributes Survey/Focus Group/Intuition Salsa Example

(Thickness, Color, Spiciness)

Identify Relevant Levels of Each Attribute

Thickness: Regular, Thick, Extra-Thick Color: Red, Green Spiciness: Mild, Medium-Hot, Extra Hot

Create Profiles for each Combination

3 thickness (reg., thick, extra-thick)

2 color (red, green) 3 spiciness (mild, med/hot, extra

hot) Leads to 3X2X3 = 18 Profiles

Conjoint: Step 3

Choose a Sample Considerations:

Consumer Involvement Typicality Diversity (if multiple segments) Expertise (if complex or discontinuous)

Conjoint: Step 4 Obtain Customer Judgements

Rank Order Sort into categories Rank the profiles within each category

Pair-wise Comparisons Use a computer package to quickly hone

in on important attributes

Conjoint: Step 4 - Example

Conjoint: Step 5 Compute Individual Value Systems Use MONANOVA for rank order data

Output in the form of standardized utilities

Output Example

Conjoint: Step 6 Find the average utilities (part-worths)

for each attribute Intuition: Find the attribute with the biggest

range in utilities across the different levels Use graphs/calculations for importance measures Be careful with averages

Segments may exist Cluster Analysis can tell you

Output Example

Let’s consider golf balls...

• • distance and durabilitydistance and durability• • durability and pricedurability and price• • distance and controldistance and control

Conjoint Analysis Average Average Price

Driving Ball Life Distance

250 yards 54 holes $3.00

220 yards 36 holes $4.00

200 yards 18 holes $5.00

Your “Optimal” Product Design

$5/sleeve

Driving Distance of 200 yards

Average Ball LifeAverage Ball Lifeof 54 holesof 54 holes

See also Titleist’s Ball-Fitting and Wilson’s Custom Fit

How can conjoint analysis be conducted? One-on-One Personal Interviews

written or verbal concept descriptions multimedia presentation of concepts

RTI’s TradeOff VR; Sawtooth’s Sensus TradeOff; MIT’s Information Acceleration

networked computer facilities Moskowitz Jacobs

Mail written concept descriptions disk by mail

Internet the future??

Summary of Conjoint Analysis Advantages

the relative importance of product features can be quantified using customer input

only need to test a relatively small number of actual product designs

Limitations output is usually not directly linked to actual

purchase