Product Management 06 - Concept Development and Testing

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In short…

The importance of the concept testing process during a new product launch.
The different types of concept tests and how to conduct the most common type of concept test.
The Long Tail Effect: How digital technologies are changing new product development.
Understand potential and forecast.
Estimate the market potential and forecast sales.
Apply metrics to evaluate model forecasts and compare models.

Concept Generation:

Technology allowed the development of a form that benefits the consumers

One 1/3 is present – Idea

Only 2/3 are present – Concept

All 3 are present: A new product

Types of concept tests: Surverys, Focus Groups, Limited rollout, etc

Conjoint analysis is popular overtime

The objective of Concept Testing:

First qualitative methods are used like focus groups, brainstorming

Then more expensive quantitative methods: survey based concept tests, conjoint analysis

Finally, pre-test and test marketing methods are utilized before the product launch

Concept testing fails when the past is not a good predictor of the future.

Define the purpose of the concept test
1. Selection of concept
2. How to improve the concept
3. Impact on sales
Choosing a survey population
1. For example, if we want to improve the post-purchase experience of consumers who have bought motor insurance, first we need to ask screening questions to check if the survey population has motor insurance.
2. Only after this, we can select a proportion of the population which has motor insurance for our surveys
Choosing a survey format
1. Face-to-face interviews, telephone interviews, emails, internet
2. Sample selection bias needs to be considered
Communicating the concept via sketch, photos, texts, storyboard, videos, simulation, etc
1. Description of the concept should match the information users are likely to consider when making a purchase decision
2. Include the price only if it is expected to high or low, or ask the respondent how much they are willing to pay for the product

Measuring customer response
1. Purchase intent,
2. Uniqueness of the concept
3. The believability of the concept,
4. Questions about product attributes
5. Problems consumers see in using the concept
6. The reaction of consumers to price
7. Information about respondents
Interpreting the results
1. e.g.: Purchase intention
2. Definitely buy and probably buy options are considered top box score and second box score