Exam 2 Study Guide - Dukesinbusiness.com

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Nov 14, 2013 (3 years and 8 months ago)

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Market Evaluation of Product Concepts

What is Concept Testing?



The evaluation method used to assess the likely market demand and the best customers
to target with potential new products early in their development.

Concept Test Objectives



Develop the
original idea further

o

Look at the advantages and disadvantages



Estimate the concept’s market potential

o

How likely are you to use the product



Eliminate poor concepts

o

Tons of disadvantages and few advantages

o

Poor concepts affect the decay curve



Identify the
value of concept features

o

Look at advantages and emphasize these within your marketing



Identify the highest potential customer segment

o

Gender, state of residence ect compared to the likelihood to purchase

Designing a Concept Test

(5 Decisions)

o

KSF influenc
e type of format used

o

Type of innovation affects type of format used

o

The more knowledge the customer has about the product, the less involved the format
needs to be




Decision 1
-

Format



Narrative
-

a written description



Drawing



Virtual Reality
-

a simulation
or virtual experience



Prototype




Decision 2
-

Content



ACV items



Used for new to the world innovation types



Commercial vs. Competitive



Used when people are already familiar with the product



Commercial
-

used for a more informational approach



Competitive
-

used

for a more positioning emphasis (KSF=quality)




Decision 3
-

Questions

1.

Criterion



Used for elimination decisions



Use likelihood to purchase questions

o

Top 2 Box Square



1 Very Unlikely



2 Unlikely



3 Neither



4 Likely



5 Very Likely

# of 4 or 5
/

Total # of people
=

% of 4 or 5


2.

Comprehension



Used to gauge customer understanding of the product



Use open ended advantage type questions to see if customers see the
same benefits the firm sees


3.

Diagnostic



Used to enhance the product



Use open ended
disadvantage questions to see if customer sees more
disadvantages than firm, and how to fix those potential issues.


4.

Demographic



Used to perform
benefit segmentation




Ex: age, gender, state ect type questions




Decision 4
-

Implementation



Personal vs.
Impersonal

o

Personal: Face
-
to
-
face (KSF=quality; can follow up on
respondents)

o

Impersonal: Email or online survey (KSF=time and cost)



Individual vs. Group

o

Individual: 1
-
on
-
1 (KSF=quality; fix the risk of group think)

o

Group: (KSF= time and cost)



Decision 5
-

Respondents

a.

Innovators/ Lead Users

i.


Are first to buy and typically described as venturesome, younger,
well educated, financially stable, and willing to take risks.
(2.5% of
Total Market)


b.

Early
Adopters

i.

Are local opinion leaders who read magazines and who are
integrated into the social system more than the average
consumer.
(13.5% of Total Market)


c.

Early Majority

i.

Solid, middle
-
class consumers who are more deliberate and
cautions.
(34% of Total Market)


d.

Late Majority

i.

Described as older, more conservative, traditional, and skeptical of
new products

(34% of Total Market)


e.

Laggards

i.

Resistant to change, conservative, like tradition, often older and
lower in socioeconomic status.
(16% of Total Market)












Identifying Benefit Segments



Cross
-
Tabulations

o

Decide which of the two variables to pair

o

Use
Pivot Tables

to create crosstabs



Insert Pivot Table



Choose Columns and R
ow



Columns= Questions



Rows= Respondents Numerical Answer




To do a 1 way table



Drop
Questions into Row fields



Drop same Question fields into Data fields



Can add demographic questions into column fields





For Non
-
numerical data, do a
concept

analysis

o

Lower cost either 0 or 1



0= didn’t identify



1= did identify

o

Add Question on cost



Ex. Is
cost a benefit (on the scale of 0 or 1)


Characteristics of Effective Benefit Segmentation

1.

Measurable



Can we quantify the segment?



Number of potential

2.

Differentiable



Does the segment act different in some important way?



Is it unique?

3.

Accessible



Can we
reach customers in the segment?



Can we distribute to them?

4.

Substantial



Is the segment worth it financially?



Does this segment allow us to reach our goals?