How to Build a Million Dollar Business November 2010
Nov 27, 2014
How to Build a Million Dollar Business
November 2010
Introducing…
20+ years experience
Previously in senior positions at
Quaker Oats
Information Resources
Grey Advertising
Holds a Master of Arts and a doctorate (Social Psychology) from USC
Has taught courses at USC, Santa Monica College, and West Los Angeles College
Kevin Gentry, Ph.D.Group Vice President
Introducing…
16+ years of sales, marketing, and business development experience
Oversees introduction of C.A. Walker to potential customers
Previously worked for a research firm and a branding company in business development
Holds a B.S. degree in Business Administration, Marketing emphasis from CSUN
Rebekah PaulBusiness Development Mgr
Who We Are
• In business since 1972
• Privately Held and Employee Owned
• Mid-Sized Firm
• Fully Integrated Data Processing and Programming
Current Client List
Market Research Strategic Issues
• Sampling Representative to populations U.S. Census-based demographics eRewards and eSearch
• Interview Length Minimum: 5 minutes Maximum: 25 minutes Average: 10 - 15 minutes
• Incentives Paid to each participant, not sweepstakes Panels include in the cost May add to it (typically $100 - $150) if narrow target, e.g. physicians,
requesting sensitive information, etc.
FAIL
Not developing your products along with the customer, knowing what their pain points are and what problem you’re solving
Making critical business decisions when too close to the situation, when views and experiences are too narrow, lacking perspective and objectivity
Getting all wrapped up in building a product but never pausing to find out if there will be demand for it
Not taking part of the budget to do the research necessary to validate the market: size of the market, how fast it’s growing and competitor activity
Not interviewing at least 100 people in your target market to talk about what they’d like to see in a product
Source: BNET.com
Testing new products at concept or pre-production stage
Measuring demand for new products, estimating market size/sales volume
Understanding prospects: demographics, how they make purchase decisions
Determining product feature/price trade-offs
Market Research Strategies
9
Case Study – Testing New Product Concepts
A Manufacturer of nutritionally enhanced products wanted to measure reactions of vegetarians to two different forms of a particular vitamin (“1” and “2”) added to a product line.
• Online survey among vegetarian publication subscribers responding to an email blast
• Males and females• 3,287 responded and 1,057 passed the screeners• Must have used the product line in the past year
10
Case Study – Testing New Product Concepts
Measures include:
• Likelihood to purchase• Product line by itself• Product line with vitamin no form (e.g. B)• Product line with vitamin form 1 added (e.g. B2)• Product line with vitamin form 2 added (e.g. B12)• Awareness of derivation of forms 1 and 2• Preference of vitamins based on derivation
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Case Study – Testing New Product Concepts
65%58%
50% 49%
23%16%
0%10%20%30%40%50%60%70%
Product lineby itself
No form Form 1 Form 2 Form 1 +derivation
Form 2 +derivation
3-D Line 1
Positive purchase interest of the product line with added vitamin goes down among all vegetarians as information is provided about vitamin formulation and derivation
Total (N=1,057)
12
Case Study – Measuring Demand for New Products, Estimating Market Size/Sales Volume
As part of an ongoing program, a Film Studio wanted to measure demand for the DVD release of one of their Family film titles, estimate market size, and project sales using a proprietary norms database that we developed.
• Online interviews of nearly 5,000 DVD households
• 90% Adults 18-54• 10% Kids/Teens 8-17 • 1+ DVDs purchased in past 6 months
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Case Study – Measuring Demand for New Products, Estimating Market Size/Sales Volume
Measures include:
• Film awareness• Film ratings among those who saw it• DVD purchase intent • Preference for single-disk or double-
disk version and at what cost• First-month purchase urgency• First-pick among competitive titles• Sales volume forecast
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Case Study – Measuring Demand for New Products, Estimating Market Size/Sales Volume
The title had broad appeal, awareness and viewership among both parents and non-parents, with “Excellent/Very Good” ratings: Parents with 6-14 year olds are the core target Purchase intent was strong and above average
compared to Family film norms database
Sales volume forecast for the title (at $19.99):
Aggressive estimate* 6.5mm units
Moderate estimate 5.7mm units
Conservative estimate* 4.8mm units
*Forecast within +/-15% of actual DVD sales, supporting accurate adjustment of marketing and advertising expenditures for home video sales
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Case Study – Understanding Prospects/Purchase Decisions
A Health Insurance Company wanted to understand how and why its California customers are choosing their purchase channel (Agent vs. Direct vs. Internet), how committed they are to that channel, and what their key individual health plan purchase criteria are.
• Primary or co-decision maker• Between 18-55 years of age• 281 telephone interviews with recent
purchasers/members from their database• 37% applied through an Agent• 38% applied Direct• 25% applied through the Internet
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Case Study – Understanding Prospects/Purchase Decisions
Measures include:
• Did they contact an Agent at all• Why or why not• If yes, how did they find him or her• If yes, to what degree did they rely
on the Agent when making a decision• Did they contact Direct at all
• Why or why not• Did they contact via Internet at all
• Why or why not
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Case Study – Understanding Prospects/Purchase Decisions
When purchasers/members made a decision, they were most focused on (top 5, in order of importance):
• Best benefits for the price• Good pharmacy benefit• Choice of plans to fit budget• Choice of amount of coverage• Good customer service
Choice of which channel to use is largely
dependent upon the purchaser’s perception of which is most convenient, how self-reliant the purchaser is, and whether or not the purchaser personally knows or has been referred to an agent
Case Study – Feature/Price Trade-off
Determine the trade-off between features and price in purchase decisions for a specific office product line
Discrete Choice Modeling used to value product variables’ price premiums
• 601 online surveys• Office Supply Decision
Makers• 80% purchased <= 50 of
these products in the past 6 mos
13 variables including:Durability Materials
DesignPriceStyleSize
7 Products with differing combinations
of the 13 variables
Case Study – Feature/Price Trade-off
0% 20% 40% 60% 80% 100%
Design Element 10
Design Element 9
Recycled Materials
Design Element 7
Design Element 6
Design Element 5
Design Element 4
Design Element 3
Design Element 2
Design Element 1
Durability
Size
Price
1%
1%
3%
4%4%
4%
5%6%
9%
10%11%
12%
20%
Most important features for purchase intent
Recycled materials not yet a key purchase consideration
Case Study – Feature/Price Trade-off
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$3.05
$1.24
$3.33 $3.69
$4.17
$5.41 $5.01 $5.31 $5.46
Upgrade 4Upgrade 3Upgrade 2Upgrade 1
+13.8 +23 +18.5 +17.2Incremental Share Achieved by Maximum Upgrade
From baseline productValu
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crea
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rom
bas
elin
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~ FIN ~