contentskisi.deu.edu.tr/banu.atrek/mrk 4248 innovation and... · development of concept statements...

Running Head: IDEA GENERATION AND CONCEPT TESTING 0

CONTENTS

The Overall System of Internal Concept Generation ...................................... 1 Problem Analysis ................................................................................................. 2

Problem Analysis Procedure ........................................................................... 4 Methodologies to Use ....................................................................................... 5 Problem Analysis in Action ............................................................................. 7

Scenario Analysis ................................................................................................. 8 Idea Generation ................................................................................................. 11

Common Approaches to Idea / Concept Generation .................................. 11 Storyboarding ................................................................................................. 11 Role playing .................................................................................................... 12 Brainwriting .................................................................................................... 13

Concept Testing ................................................................................................. 13 Concept Testing Objectives .......................................................................... 14 The Purposes of Concept Testing ................................................................. 14 Considerations in Concept Testing Research .............................................. 15 Prepare the Concept Statement .................................................................... 15 Market Research to Support Concept Testing: BASES ............................. 18

Product Attributes ............................................................................................. 19 Analytic Attribute Techniques ...................................................................... 19

REFERENCES .................................................................................................. 28


ABSTRACT

This report is intended to contribute to the idea generation and concept testing phase and how

it should be managed. The idea generation provides for the creation and development of new

ideas by increasing creativity. Concept generation is as important as idea generation for

innovation. Concept testing is a research tool used to assess the market viability of a new

product idea prior to incurring the development expense of actually fabricating a product.

This paper examines the current literature on concept testing to establish its importance with

respect to new product success.

KEY WORDS:Idea Generation, Concept Testing, Creation, Innovation, New Product

The Overall System of Internal Concept Generation Every ideation situation is different and varies by the urgency, the skills of the firm and its customers, the product, the resources available, and so on. But one general approach, that of problem-based ideation, works best and can be modified to fit virtually every situation. The steps are diagrammed in Figure 1 . The flow essentially is from the study of the situation, to use of various techniques of problem identification, to screening of the resulting problems, and to development of concept statements that will then go into the evaluation phase. The whole system is based on close involvement with parties who have information to help us, primarily stakeholders, which include end users, of course, but also advisors, financiers, consultants, maybe architects, physicians, or other professional groups, possibly resellers—even current nonusers certainly have information that may be useful to us!


Figure 1 Problem-Based Concept Generation

Problem Analysis It seems that every history of an industry, a business firm, or a famous businessperson cites some key time when a new good or service capitalized on a problem that others didn’t sense or appreciate. But problem analysis is much more than a simple compilation of user problems. Although the term problem inventory is sometimes used to describe this category of techniques, taking the inventory is only the beginning—analysis is the key. If you ask what a person needs or wants from a shampoo, the answers will be clean hair, manageable hair, and so on—replies reflecting recent promotions of product benefits. But if you ask, “What problems do you have with your hair?” the answers may range into areas (for example, style or color) unrelated to shampoo. See Figure 2 for an example of what we are looking for in problem analysis, as applied to cell phones.


Figure 2 Problem Analysis Applied to the Cell Phone

Problem analysis was, at least informally, used by James Dyson in the development of the Dual Cyclone bagless vacuum cleaner. Existing vacuum cleaners were unsatisfactory in terms of performance, maneuverability, and ease of disposing of dirt, and Dyson set out to create a better vacuum. In later years, Dyson produced a powerful hand dryer, the Airblade, sold to the business market, and by 2009 adapted the technology behind the Airblade to create a better fan. Like vacuums, regular household fans have remained quite unchanged in design for decades. Dyson’s innovation was guided by a quick but thorough problem analysis that identifi ed several points of improvement. As Dyson said, conventional fans have “spinning blades [that] chop up airfl ow, causing annoying buffeting. They’re hard to clean, and children always want to poke their fingers through the grille.” (Rebecca Smithers, “Latest for the Dyson Touch: The Fan Without Blades,” The Guardian, October 13, 2009.)

One could add a few more problems: Fans can tip over and are not very energy efficient. The Air Multiplier, as it was called, was purported to address many of the problems. It was bladeless, increasing safety and ease of cleaning, as well as creating a smooth stream of air. The Airblade technology provided for effective and efficient cooling, and its low center of gravity prevented dangerous tipping. It featured functional and “cool” design elements associated with the other Dyson products. The product was successfully developed and launched in late 2009, at a price point signifi cantly above conventional fans (about $300), but within reach of customers who appreciate good design and substantially improved performance. Note that in this and the earlier examples, it is up to senior management to encourage new product teams to look beyond their normal boundaries when they explore customer problems.


Problem Analysis Procedure There are several variations in problem analysis. But one commonly used procedure is reverse brainstorming. In this procedure, participants generate a list of key problems with the product currently in use, then group and prioritize these such that product development can focus on addressing the most important problems.( Robert G. Cooper, Scott J. Edgett, and Elko J. Kleinschmidt, “Optimizing the Stage-Gate Process: What Best-Practice Companies Do—I,”Research-Technology Management , September–October 2002, pp. 21–27.)

The general approach is the following:

Step One Determine the appropriate product or activity category for exploration. This has already been done if the product innovation charter has a use, user, or product category dimension in the focus statement.

Step Two Identify a group of heavy product users or activity participants within that category. Heavy users are apt to have a better understanding of the problems, and they represent the bulk of the sales potential in most markets. A variation is to study non users to see if a solvable problem is keeping them out of the market.

Step Three Gather from these heavy users or participants a set of problems associated with the category. Study the entire system of product use or activity. This is the inventory phase mentioned earlier, but far more is involved than just asking respondents to list their problems. A good method of doing this is asking respondents to rate (1) the benefits they want from a set of products and (2) the benefits they are getting . The differences indicate problems. Complaints are common and often taken as requests for new products. But they are apt to be just the result of omniscient proximity , meaning that users face a minor problem frequently, so it is the fi rst one mentioned. Some fi rms have had success observing consumers or business fi rms actually using products in a given category; for example, observing skiers as they shoot down a hill or offi ce workers handling a mailing operation.

Step Four Sort and rank the problems according to their severity or importance. Various methods can be used for this, but a common one is shown in Figure 3 . It uses (1) the extent of the problem, and (2) the frequency of its occurrence. This bothersomeness index is then adjusted by users’ awareness of currently available solutions to the problem. This step identifies problems that are important to the user and for which the user sees no current solutions.

Source: From Burton H. Marcus and Edward M. Tauber, Market Analysis and Decision Making, Little, Brown, 1979, p. 225. Reprinted with permission.


Figure 3 The Bother –someness Technique of Scoring Problems

Methodologies to Use The generalized structure of problem analysis still contains the question of how to gather

the list of customer problems. Many methods have been used, but the task is difficult. The customer or user often does not perceive problems well enough to verbalize them. And, if the problems are known, the user may not agree to verbalize them (for many reasons, including being embarrassed).

Experts

We have already mentioned going to the experts—using them as surrogates for end users based on their experience in the category under study. Such experts can be found in the sales force, among retail and wholesale distribution personnel, and in professionals who support an industry—architects, doctors, accountants, and the staffs of government bureaus and trade associations. Zoo experts fi rst publicized the problem of elephant keepers being killed when trying to cut the big animals’ toenails. Today an Elephant Hugger grabs an elephant, rolls it over on its side and holds it there, while the keeper cuts away. Later, the inventor turned his attention to a giraffe-restraining device.( Laura E. Keeton, “Marketers Debate the Best Way to Trim an Elephant’s Toenails,” The Wall Street Journal , February 25, 1995, p. B1. ).In another example, Nokia of Finland has an R&D team of 8,000 scientists and managers who collect environmental information on wireless communications and identify the main challenges. This has helped Nokia sustain growth in this market through the introduction of innovative, successful new products.( Muammer Ozer, “A Survey of New Product Evaluation Models,” Journal of Product Innovation Management, 16(1), January 1999, pp. 77–94.)

Published Sources

Also as mentioned earlier, published sources are frequently useful—industry studies, the fi rm’s own past studies on allied subjects, government reports, investigations by social critics, scientific studies in universities, and many others.

Stakeholder Contacts

The third, and most productive, is to seek out the voice of the customer (VOC)—that is, we will ask household or business/industry customers directly, via interviewing, focus groups, direct observation, or role playing.

• Interviewing The most common method by far is direct, one-on-one interviewing. Sometimes this is a full-scale, very formal, and scientific survey. Other times the discussion is with lead users, an idea-generating method ; lead users often are the fi rst to sense a problem, and some go on to respond to it themselves. Still other times, it may be no more than conversations with some key customer friends at a trade show, because a problem statement may come from only one person and yet be very signifi - cant for us. Phone interviews have been shown to be a quick and effective way to get useful new product ideas and help to ensure that the targeted respondent (for example, a professional or a senior manager at a customer fi rm) actually responds, rather than a last-minute fi ll-in.( For more on telephone interviews and


qualitative interviewing in general, see George Castellion, “Telephoning Your Way to Compelling Value Propositions,” in P. Belliveau, A. Griffi n, and S. Somermeyer (eds.), The PDMA Toolbook for New Product Development (New York: John Wiley, 2002), pp. 63–86.)

Because many end users don’t think that much about the products they use and often just accept them as parts of living, even very informal discussions with individuals at a trade show or over the telephone can reopen thinking, bringing to mind things forgotten.

• Focus Groups The focus group is designed to yield the exploratory and depthprobing type of discussion required, and it can be easy and inexpensive to set up and use. If done wrong, it only appears that way. Granted, in this case we are not seeking facts or conclusions, just genuine problems, and the focus group method works well by stimulating people to speak out about things they are reluctant to mention when in one-on-one interview situations. It’s much easier to talk about one’s problems when others in the group have already admitted they have problems, too.

But, even in a single focus group, the costs are deceptive. Such sessions can cost from $3,000 to $10,000 in normal usage. Even at $3,000, a two-hour meeting of 10 people will yield about 10 minutes talk per participant. Since the cost is $300 per participant, that’s talk at the rate of $30 per minute, or $1,800 an hour! It had better be very good indeed. Although the focus group technique is common, the outcome is not always, or even usually, successful. The focus group is a qualitative research technique. Unlike the traditional survey, it depends on in-depth discussions rather than the power of numbers. A problem analysis focus group should be asked:

What is the real problem here—that is,what if the product category did not exist?

What are the current attitudes and behaviors of the focus group members toward the product category?

What product attributes and benefits do the members of the focus group want?

What are their dissatisfactions, problems, and unfilled needs?

What changes occurring in their lifestyles are relevant to the product category?( “When Using Qualitative Research to Generate New Product Ideas, Ask These Five Questions,” Marketing News , May 14, 1982, p. 15. )

In a typical example, Nissan conducted focus groups of American children between the ages of 8 and 15 to get ideas for storage, cup holders, and other features as part of the design of its full-size minivan.( Norihiko Shirouzu, “Tailoring World’s Cars to U.S. Tastes,” The Wall Street Journal , January 15, 2001, pp. B1, B6.)

Other suggestions for helping guarantee the usefulness of focus group fi ndings are to invite scientists and top executives to the sessions and to avoid what some people call prayer groups: Managers sit behind the mirror and pray for the comments wanted rather than really listening to what users are saying. Be sure the focus groups are large enough for the interactions and synergy that make them successful, and don’t expect focus group members to like your products! Focus group moderators know not to begin the session cold, but instead to let people get comfortable and introduce themselves—a rule of thumb is to treat participants as one would treat strangers at a party. The best moderators genuinely like people and generate openness and trust by asking ice-breaker questions and by contributing personal experiences and practices.


(Joseph Rydholm, “Respondent Collages Help Agency Develop Ads for New Pontiac,” Quick’s Marketing Research Review, March 1995, p. 7; and Tim Huberty, “Sharing Inside Information,” Quick’s Marketing Research Review, March 1995, p. 10.)

• Observation

Observation methods are rooted in sociological studies, and involve watching customers (or noncustomers) using products in their own environments. Video cameras or photos are sometimes used to record observational data. The new product team observes the data carefully for actions, body language, and so on and tries to identify customer needs and wants, and new product ideas that might satisfy these needs. (Dorothy Leonard and Jeffrey F. Rayport, “Spark Innovation through Emphatic Design,” Harvard Business Review, 75(6), November–December 1997, pp. 102–113. For a look at how the design fi rm IDEO uses observation, brainstorming, and rapid prototyping to identify and refi ne product concepts, see Bruce Nussbaum, “The Power of Design,” BusinessWeek, May 17, 2004, pp. 86–94 .)

• Role Playing

Though role playing has long been used in psychology to enhance creativity, there is little evidence of its successful use in generating ideas for new products. Presumably, it would be valuable in instances where product users are unable to visualize or verbalize their reactions. It should also be valuable where consumers are emotionally unable or unwilling to express their views—for example, in areas of personal hygiene. Unfortunately, though users are the best place to begin the ideation, and problem analysis is widely used in one form or another, most fi rms still do not have organized systems to exploit this source. Considering that Levi Strauss got the idea for steel-riveted jeans from a Nevada user in 1873, one must wonder why not. An alternative way to generate concepts is based on product function analysis. A product can be expressed in two words, a verb and an object (for example, toothpaste “cleans teeth”). Thinking of new combinations of verbs and objects can suggest new product functions. In this method, hundreds of these two-word miniconcepts can be generated and shown via computer to respondents, who rate them in terms of likely interest. The highest scoring concepts are identifi ed and in-depth interviews are conducted to explore feelings and ideas further. In an application in the food processing industry, several novel mini-concepts emerged (have fun with food, touch food), while several others fared poorly (sponge food, vaporize food). To develop these concepts further, one would need to examine why these mini-concepts were liked.( Jeffrey F. Durgee, Gina Colarelli O’Connor, and Robert W. Veryzer, “Using Mini-Concepts to Identify Opportunities for Really New Product Functions,” Journal of Consumer Marketing, 15(6), 1998, pp. 525–541.)

Problem Analysis in Action One unmet need that had existed for years was the noisy candy wrapper in the theater. Gene Shalit, of NBC’s Today Show , complained one morning about crackling candy bar wrappers. An expressway-commuting executive from Hercules Inc. overheard his comment and asked the laboratory for a silent candy wrapper. Polypropylene provided the answer, though not without tricky effort on heating, waterproofi ng, and airproofi ng. Toyota, Mitsubishi, and other carmakers redesigned their sport-utility vehicles to appeal more to the U.S. marketplace demand. Often, these changes come about after disappointing sales with early SUV versions. The Toyota T100 pickup had disappointing sales in the United States; consumer research suggested that the reason was that it was viewed as too small. The full-size Tundra comes


complete with a V8 engine and a passenger compartment reportedly large enough for “a passenger wearing a ten-gallon cowboy hat.”( Norihiko Shirouzu, “Tailoring World’s Cars to U.S. Tastes,” The Wall Street Journal , January 15, 2001, pp. B1, B6.).Noting that children are heavy ketchup consumers, the H. J. Heinz Company conducted research with children to identify ways to improve ketchup. Some strides were made in package redesign: softer, curvier squeeze bottles that emit a thinner stream of ketchup (so that kids could draw with it). The real breakthrough came, however, when someone thought to ask kids for their own suggestions— and they immediately said, “try different colors.” Apparently no adults had thought of changing its color (ketchup has been red since Heinz began mass-producing it in 1876). It probably surprised no one that the kids’ favorite color was a disgusting (to adults) shade of green. By adjusting color, Heinz came up with a signifi cantly new product idea: EZ Squirt Ketchup in red and “Blastin’ Green,” greeted with enthusiasm by loyal, young ketchup users in the fall of 2000. Heinz followed this initial success by launching purple ketchup.( Peter Mucha, “Ketchup: The Color of Money,” Philadelphia Inquirer , October 26, 2000, pp. C1, C3. ) (Initially skeptical parents were won over by the fact that all the EZ Squirt colors had plenty of added Vitamin C, something regular ketchup lacks.) Finally, ongoing problem analysis is critical to identifi cation of newly emerging problems and continued improvement. Consider Domino’s Pizza. Decades ago, Domino’s founders identifi ed a real unmet need in the market: quick, reliable pizza delivery service. Late-night customers, in fact, were satisfi ed with an average-quality pizza, as long as it was delivered fast and hot. Generations of customers knew Domino’s promise: “thirty minutes or it’s free.” But by 2009, competition in the pizza business had heated up; major delivery competitors such as Papa John’s had achieved immense success and even the traditionalrestaurant Pizza Hut chain was getting into the delivery business. Fast and hot was no longer enough. Domino’s focus groups found that customers had lots to say about the taste, most of it negative. Company president Dan Boyle decided to respond to the threat by assigning a product team to develop a new, better-tasting pizza. Marketing employees used focus groups and other research methods to capture the voice of the customer; the food engineers developed a totally new recipe to meet the specifi cations. Over a dozen different sauces and crusts were tried, as well as dozens of types of cheese. Despite the risks of such a dramatic strategy (what if it were New Coke all over again and customers demanded the old product back?), the new pizza was just what the market ordered.( Anonymous, “New Domino’s Pizza Recipe Doubles Quarterly Profi ts,” nydailynews.com, March 2, 2010; Domino’s Pizza 2009 Financial Results.)

Scenario Analysis Scenarios take several different forms. First, we distinguish between (1) extending the present to see what it will look like in the future, and (2) leaping into the future to pick a period that is then described. Both use current trends to some extent, of course, but the leap method is not constrained by these trends. For example (hypothetically) an extend study might be: Currently, homeowners are converting from individual housing to condominium housing at an annual rate of 0.9 percent. If this keeps up for 20 years, there will be 7 million condominium units in use, which will present a need for 250,000 visitors’ motel units in major condominium areas to house visitors who cannot stay in the smaller units with their hosts. The thinking of the utopian school is sometimes used. By contrast, a leap study might be: Describe life in the year 2030 in a major urban area of Germany contrasted with life in a similar setting in France. Leap studies can be static or dynamic . In dynamic leap studies, the focus is on what changes must be made between now and then if the leap scenario is to come about—the interim time period is the meaningful focus. In static leaps, there is no concern about how we get there. Figure 4 shows a


dynamic leap period in which the auto dealer service problem no longer exists. The time between now and then is broken down to yield the technical breakthroughs needed soon to reach that ideal condition. As another illustration, one professional forecaster made several rather bold predictions regarding technologies and our lifestyles in the future (see Figure 5 ). Any of these could be viewed as a leap scenario into some time in the not-too-distant future: These scenarios (if not too farfetched) might suggest opportunities for several new products. (Which do they suggest to you?) Another variant is a study of wild cards —high-impact, low-probability events (see Figure 6 for a set of wild cards identifi ed recently by the Arlington Institute). In a wild card study, one assesses the likelihoods of occurrence of the identified events and investigates the threats or new product opportunities they suggest. While any one of them might be rather unlikely, it does not mean that one should not develop a contingency plan, especially if it may set off a chain of events that can have an impact on innovation. For example, a natural disaster may result in an epidemic, triggering border closings and quarantines and threatening the airline industry. A key here is to try to recognize the early warning signs of the wild cards, as often they will exist (possibly outside one’s own discipline). (John L. Petersen, , July–August 1997)

Figure 5 The Relevance Tree Form of Dynamic Leap Scenario


Figure 6 One Professional Forecaster’s View of the Future

Scenario analyses lead to great learning and insights, but are hard to do well. Several guidelines have been suggested for conducting a good scenario analysis:

1. Know the now. The participants must have a good understanding of the current situation and its dynamics, otherwise the future they envision will not be realistic or useful for idea generation.

2. Keep it simple. Participants will likely have diffi culty understanding really complex scenarios.

3. Be careful with selecting group members. A group of about six, with contrasting or complementary viewpoints and prior experiences, works best.

4. Do an 8- to 10-year projection. Too far out, and the participants are guessing. Not far enough out, and the respondents will just extend whatever is going on now.

5. Periodically summarize progress . This keeps the group on track and avoids contradictions.

6. Combine the factors causing changes. Scenarios should not be determined by just one factor.

7. Check fi t or consistency at the end.


8. Once you have done the scenario analysis, plan to use it several times. These can be expensive.

9. Reuse the group. The more scenario analyses they do, the more they enjoy the task, and the better they get at it.( These points are from David Mercer, “Scenarios Made Easy,” Long Range Planning, August 1995, pp. 81–86; and Audrey Schreifer, “Getting the Most out of Scenarios,” Planning Review, September–October 1995, pp. 33–35. See also Schnaars and Ziamou, op. cit.)

Idea Generation Many methods are available for the idea generation stage. The basic approach is to harness creativity in some form for the development of new ideas.

Common Approaches to Idea / Concept Generation Brainstorming

This process involved cause an action a huge number of explanations for a specific problem with emphasis being on the number of ideas. In the course of brainstorming, there is no assessment of ideas. So, people can speak their concepts freely without fear of criticism. Even bizarre/strange ideas are accepted with open hands. In fact, the crazier idea is better.

Synectics

A problem-solving technique that seeks to encourage creative thinking, typically among small groups of people of diverse experience and proficiency. In its pure form, synectics does not differ much from brainstorming.

Mindmapping

Mindmapping is a graphical technique for imagining connections between various pieces of information or ideas. Each fact or idea is written down and then connected by curves or lines to its minor or major fact or idea, thus building a web of relationships. Mind mapping is utilized in brainstorming, project planning, problem solving and note taking.

To get started with mindmapping, the participant just has to write a key phrase or word in the middle of the page. Then, he must write anything else that comes to his mind on the very same page. After that, he must try to make connections as mentioned in the previous paragraph.

Delphi

Panels of experts are assembled; they are sent a survey calling for forecasts within a given area of activity; the surveys are tabulated and summarized; the results are returned to the panel for their reaction and alteration; new summaries are prepared; the results are sent out again, and so on. The method is essentially a lapse because the individuals still must use some method to make their own forecasts. It is especially attractive where the industry itself is new and there are no historical data to aid forecasters.

Storyboarding

Storyboarding is about developing a visual story to explain or explore. Storyboards can help creative people represent information they gained during research. Pictures, excerpt from the


user, and other pertinent information are fixed on cork board, to stand for a scenario and to assist with comprehending the relationships between various ideas.

Role playing

In the role playing technique, each participant can take on a personality or role different from his own. As the technique is fun, it can help people reduce their inhibitions and come out with unexpected ideas.

Morphological analysis

Morphological analysis has to do with recognizing the structural aspects of a problem and studying the relationships among them. For example: Imagine the problem is transfer an object from one place to another by way of a powered vehicle. The significant dimensions are: the kind of vehicle; the power source; and the medium. Thus, a cart-kind of vehicle moving over rough services with an internal-combustion engine to power it is the automobile. The expectation is that it would be possible to determine some novel combinations.

Daydreaming

Though mostly not met with approval, daydreaming is truly one of the most fundamental ways to trigger great ideas. The word “daydream” itself involuntarily triggers an uninhibited and playful thought process, incorporating the participant’s creativity and resourcefulness to play around with the present problem. The focus of productive daydreaming is a particular goal irrespective of whether it seems to be an impractical task. The airplane is the most notable example for this.

Six Thinking Hats

Six Thinking Hats technique Edward De Bono's book published in 1985. De Bono suggests that people can be much more productive in meetings and teamwork using these approaches, if different approaches are described and how these approaches can be used. It is examined different perspectives and it is requested that the participants have those aspects of the view. He identify 6 different flats and define them.

White hat: Neutral

Red hat: Emotional

Yellow hat: Optimistic

Black hat: Pessimist

Green hat: Innovative

Blue hat: Calm

The main purpose of this technique is to speed up the process of thinking.


Brainwriting

Brainwriting is easy. Instead of asking the participants to shout out ideas, they are told to pen down their ideas pertaining to a specific problem or question on sheets of paper, for a small number of minutes. After that, each participant can pass their ideas over to someone else. This someone else reads the ideas on the paper and adds some new ones. Following another few minutes, the individual participants are again made to pass their papers to someone else and so the process continues. After about 15 minutes, you or someone else can collect the sheets from them and post them for instant discussion.

Concept Testing Concept Testing is the investigation of potential consumers' reactions to a proposed product or service before introducing the product or service to market. As businesses and organizations look to launch a product or invest in the development of an idea, concept testing is a valuable step to identify perceptions, wants and needs associated with a product or service.

Concept testing is arguably the most important step in the New Product Process. Concept testing offers the advantages of actually providing much of the information required for the screening step as well as the business analysis step. It also contributes to at least three of the six critical success factors outlined by Cooper and Kleinschmidt (1993). These are; a quality NPP, early product definition, and refinement of the idea using customer input.

In terms of cost, concept testing is relatively inexpensive compared to the costs of development, tooling, inventory, and launch. Furthermore, compared to the costs of developing and launching a potential "failure" the cost of concept testing is again relatively small.

Concept Testing Cautions and Concerns

• If the prime benefit is a personal sense (aroma, taste).

• If the concept involves new art and entertainment.

• If the concept embodies a new technology that users cannot visualize.

• If concept testing is mishandled by management, then blamed for product failure.

• If customers simply do not know what problems they have.

Oddly, in spite of evidence to the contrary, some new products people have doubts about concept testing on business and industrial products and on services.

Regarding the former, if one sticks to situations where the customer has the ability to make judgments, those judgments are worth gathering; but major technological breakthroughs don’t qualify for that, and we just have to take the risk. On services, there is no question as to whether people can tell us what they see useful if they can see it (but watch for the intangibles above). They can. But because there is usually little technical development, there is less need to do concept testing. If it is simple to go from concept to full service description (a form of

http://creatingminds.org/tools/brainwriting.htm


prototype), then the services fi rm can proceed to what is called prototype concept testing. Such testing is, of course, much more reliable with a physical prototype to talk around.

Concept Testing Objectives A product concept is an elaborated version of the initial product idea, expressed in meaningful consumer terms. A concept can be conveyed using words or illustrations, or both. In addition, a concept may be conveyed using either factual language or promotional language. The literature tends to categorise these various concept forms into two groups - "core idea" concepts and "positioning" concepts (Page & Rosenbaum, 1992).

The principal objectives of concept testing include:

1.identification of poor concepts so they can be dropped;

2.estimation of the size of the potential market;

3.identification of the various market segments and their characteristics;

4.identification of potential improvements to the concept;

5.identification of appropriate positioning strategies (with respect to price, promotion, and distribution);

6.identification of potential cannibalization of existing products

.

The Purposes of Concept Testing The first purpose of a concept test is to identify the very poor concept so it can be eliminated. If music lovers, for example, cannot conceive of a compact disc that will last forever and thus reject it out of hand, the concept is probably a poor one(Crawford,1991).

If the concept passes the first test , a second purpose is to estimate (even crudely) the sales or trial rate that the product would enjoy—a sense of market share or a general range of revenue dollars.

The buying intention question appears in almost every concept test.Even if replies fail to forecast sales,they do help confirm stated preferences.The most common format for purchase intentions is the classic five-point qestions: How likely would you buy a product like this, if we made it?

1. Definitely would buy.

2. Probably would buy.

3. Might or might not buy.

4. Probably would not buy.

5. Definitely would not buy


The number or percentage of people who defi nitely would buy or probably would buy are usually combined and used as an indicator of group reaction. This is called the top-two-boxes score.

The third purpose of concept testing is to help develop the idea, not just test it. Concepts rarely emerge from a test the way they went in. Moreover, a concept statement is not enough to guide R&D. Scientists need to know what attributes (especially benefits) will permit the new product to fulfi ll the concept statement.

Considerations in Concept Testing Research The sequence of steps in a concept test varies in practice but the general pattern is as follows.

• Prepare the concept statement • Commercialized concept statement • Define the Respondent Group • Select the Response Situation • Prepare the Interviewing Sequence • Trial interviewing • Interview,Tabulate, Analyze

Prepare the Concept Statement Concept statement states a difference and how that difference benefi ts the customer or end user.Concepts are usually presented to potential buyers in one of three formats:

1. Narrative (verbal)

2. Drawing,diagram, sketch

3. Model or prototype

4. Virtual reality

Early in concept testing, it apparently does not make too much difference which of these formats is used, as all yield about the same answers from the respondents. All the concept testing techniques we discuss here are commonly used for business-to-business product development, though in those cases it is especially important to provide sketches, models, and/or other renditions of the concept such that meaningful, objective reactions can be obtained(Crawford,1991).

Narrative:Some people prefer a very brief presentation, giving only the minimum of attributes and letting the respondent offer additional ones. Others prefer a full description, approaching what a diagram or prototype would provide.In the pure narrative ,the concept is totally intangible ,though there are ways to provide some measurements of intangibles.

Drawing and diagrams :usually must be suplemented by a narrative statement of the concept.

Prototypes, or models :are a third, more expensive form of concept statement because many decisions have to be made about the new product to get it into a prototype. Whoever builds an


early prototype makes lots of decisions about the item that probably should be kept open at this early date. Prototypes are useful only in special situations, as, for example, with simple-to-prepare food products or, at the other extreme, with concepts so complex that the buyer cannot react without more knowledge than a simple narrative would give.

Virtual reality: captures the advantages of the prototype without most of the disadvantages

Commercialized Concept Statements

A term used in distinguishing two types of product concept statements. A commercialized product concept statement is prepared in an advertising format, as a persuasive statement. A noncommercialized product concept statement is prepared in neutral, nonpersuasive format.(Gary Armstrong& Philip Kotler 2013 )

Commercialized formats produce more realistic evaluations (that is, greater acceptance), but they risk the bias of good or poor advertising copy writing

Offering of Competitive Information

Customers of all types know much less about their current products and other options than we would like. A new concept may well offer a benefi t that the customer doesn’t realize is new. One solution is to provide a full data sheet about each competitive product. Many new product managers, however, don’t like to overload the concept statement; it diffuses the message and confuses the customer.

Price

Another issue turns on whether to put a price in the concept statement. Some people object, saying reaction to the concept is wanted, not to its price. Yet price is part of the product (actually, a product attribute in the customer’s eyes), and buyers can’t be expected to tell purchase intentions without knowing price.

Define the Respondent Group

Some people try to seek out a smaller number of potential buyers who are " lead users "or influencers, or large users.This approach saves some money and gets more expert advice but often fails to reflect key diffrences in the marketplace.Of course ,we should always watch out for critics ,people who have a reason for opposing the concept.A developer came up with a device for reading electrocardiagrams and needed the reactions of cardiologists ;but the obvious conflict of interest made the interviewing tricky.

Select the Response Situation

There are two issues in the response situation: (1) the mode of reaching the respondent, and (2) if personal, whether to approach individually or in a group.

Most concept testing takes place through personal contact—direct interviewing. . Personal contact allows the interviewer to answer questions and to probe areas where the respondent is expressing a new idea or is not clear. Mail contact is frequently used instead of personal


contact, and fi rms have also used the phone and the Internet as other, less expensive means to conduct these tests.

The second issue concerns individual versus group. Both are widely used. Groups (that is, focus groups) are excellent when we want respondents to hear and react to the comments of others and to talk about how the product would be used.

The venue is normally the respondent's home or work place (for industrial products). Shopping malls, store simulations, and purpose built interview rooms are other lesser used venues (Schwartz, 1987).

Most concept tests involve evaluation of a single concept. However some tests provide a paired comparison with either a control concept, the respondent's currently preferred brand, or the market leader (Moore, 1982).

Prepare the Interviewing Sequence

Simple interviewing situations state the new product concept and ask about believability, buying intentions, and any other information wanted. The whole interview may take only two or three minutes per product concept if the item is a new packaged good and all we really want is a buying intention answerUsually we want more than that. In such cases, we first explore the respondent’s current practice in the area concerned, asking how people currently try to solve their problems, what competing products they use, and what they think about those products. How willing would they be to change? What specific benefits do they want? What are they spending? Is the product being used as part of a system?

This background information helps us understand and interpret comments about the new concept, which are asked for next. The immediate and critical question is, “Does the respondent understand the concept?” Given understanding, we then seek other reactions:

Uniqueness of the concept. Does it solve a problem?

Believability of the concept. How much they like the concept.

Importance of the problem. How likely would they buy?

Their interest in the concept. Their reaction to the price.

Is it realistic, practical, useful? Problems they see in use.

Trial interviewing

As in all research work ,it is important to do some trial interviews with people in the target respondent group.Trial interviews are especially needed on concept testing ,given the communication problems inherent in new things

Interview,Tabulate, Analyze

Depending on the objectives of the researcher, a number of different analytical techniques can be used. If the objective is to identify relevant market segments, a cluster analysis can be carried out to group respondents according to their desired product attributes. To assess the


size of the potential market, cross tabulations can be done with the "definitely would buy" group against variables such as "frequency of purchase".

If the researcher wants to establish which attributes were the most important in the overall assessment of the concept, multiple regression analysis can be used. Lesser used techniques include multiple discriminant analysis to identify the characteristics of various market segments, and multidimensional scaling to identify optimum positioning strategies.

Most concept tests would focus on the analysis of the result obtained from the fivepoint purchase intention question. A general rule of thumb for interpretation of these results (Dolan, 1993) is that a concept scoring greater than 80% favourable answers (definitely or probably will buy) should proceed to development. It is wise, however, to check industry and category `norms' for previous concept tests and their outcomes. There may be considerable variation between product categories and industries (Schwartz, 1987). Another rule of thumb is that the eventual trial rate for a new product is usually equivalent to the `top box' score (definitely would buy) for the concept (Dolan, 1993). Moore found the general feeling among companies who conduct concept tests is that the five-point intention-to-purchase scale can predict trial rates to within 20 percent, about 80 percent of the time (Moore, 1982).

Market Research to Support Concept Testing: BASES • 300 adult female respondents surveyed.

• Nestle Refrigerated Foods example (Contadina Pasta)

• 75% top-two-boxes score (24% definitely + 51% probably would buy).

• Median top-two-boxes score for this category: 61%.

• Split respondents into favorable (the 75% in the top two boxes) and unfavorable.

• Both groups liked the same things: product is natural, offers variety, is fresh, saves time, is easy to prepare.

• Most common negative: price.

• BASES tried three positioning statements: Homemade, Pasta Dinner, and Superior; Superior was found to have more likes and fewer dislikes and was selected.

• Obtain adjusted trial through rough rule of thumb: 80% of the “definitely” + 30% of the “probably” will actually buy, or:

(0.8 x 24%) + (0.3 x 51%) = 34.5%

• Assuming 48% awareness and 70% availability, we get :

AW x T x AV = 0.48 x 34.5% x 0.70 = 11.6%

• Total number of trial households:

target households x trial rate =

77.4 million x 11.6% = 9 million.


• To get an estimate of Repeat, use:

Repeat for similar products = 39%

Average customer repeat = 2.5 times

No. of units bought per purchase occasion = 1.4

• Therefore the final prediction of sales based on A-T-A-R is:

9 million x 136.5% = 12.3 million.

• According to Nestle, the greatest uncertainty was in the Repeat estimate of 39%, so a worst case scenario was tried.

Even at a worst-case 27% repeat rate, sales forecast was still 8.5 million which still surpassed Nestle objectives.

(Note: this repeat calculation is slightly different than in the text, but is used at BASES.)

Product Attributes Products are made up of attributes - based on these attributes when describing a product.

These attributes are Features, functions, benefits. Features defines the content of the product. Features can might be many things. These are dimensions, esthetic characteristics, components, materials, services, performance and so on. Benefits define how the product satisfies the user. Uses sensory, enjoyments, economic gains, savings (time, effort) are some kind of benefits. Benefits can change according to product used with or used where. Functions define what the product does and how it works. Functions are not used as much as benefits and features. Because the functions of the product may not make a difference as the features and benefits(Crawford,2011).

A pair of shoes can bought by many of attributes. For example the person might like the appearance of the leather or design. It is features of shoes. These shoes can be excellent walking shoes. It is function of shoes (Crawford,2011). These shoes are very comfortable and it is benefit of shoes. Similar attributes distinctions can be made for refrigerators and dishwashers. For refrigerator, it keeps food from going bad (function), it is energy efficient (A+,A..) (feature) and it saves money (benefit). For dishwasher, it automates dishwashing (function), it has large capacity (feature), washes a day’s dishes at once (benefit)(Plantz,2015).

Analytic Attribute Techniques Analytic attribute techniques allow you to add new features or create a new product by

changing one or more existing attributes. Western (particularly European and North American) thought goes heavily toward rearranging things, while Eastern (Asian) thought tends to start work anew(Crawford,2011). Commodity type products are major focus. Because it is enough to little rearrangements to make a difference. Companies make big gains from these differences.

Gap analysis shows how products are positioned in the market and how they are perceived by customers. Gap maps are made in three ways;


-Determinant Gap Map

-AR Perceptual Gap Map

-OS Perceptual Gap Map

Determinant Gap Map

Managerial expertise and judgment is used to plot products on a map. Attributes that both differentiate and are important are called determinant attributes, because they help determine what products are bought.

Figure-7 Gap Map for Snack Products

Figure 7 shows the map of the research made for the snacks. The map has two axes. They are crunchiness and nutritional value which were important in snacks. Consumer differentiate snacks on their crunchiness and their nutritional value. For example raw vegetables has high crunchiness and high nutritional value. Fritos has low nutritional value but has high crunchiness. All the brands in the map are related to each other through these two factors. The places indicated by question marks represent the gaps in the market. These gaps mark the opportunity areas for the new product.

Determinant gap maps has advantages and disadvantages. Advantages of determinant gap maps are speedy and cost-efficient. Disadvantage of determinant gap maps is managerial judgment. The customer's point of view may be very different. This can make mistakes to the managers(Crawford,2011).

Attribute Ratings Gap Map

In this technique, one-to-one communication with customers and users is made and the attributes of the products are asked. This technique is used to determine the attributes (functions, features, benefits). Typically, this is done using 1-to-5 or 1-to-7 scales (commonly called “Likert-type” scales), where the endpoints are “strongly disagree” and “strongly agree” with each attribute statement provided. Factor analysis, a statistical technique available in computer


packages, is typically used to reduce the large number of attributes to small number of underlying dimensions (also called factors), which can then serve as the axes of the perceptual map(Crawford,2011).

Figure-8 Attribute Perceptions Questionnaire

This questionnaire was made o find out how the attributes affected the buying of women swimsuit.


Figure-9 Snake Plot of Brand Ratings

Figure 9 shows the average score of each brand for each attribute. Attractive design, designer label, fashinable are high rated on same brand(Aqualine). These attributes seem to hang together.

A computer program is applied to determine the factors. these operations are done to find out how many important factors are in the model. For this, the eigenvalue is considered first.(Figure 10) Figure 10 shows factor 1 and 2 explain a lot variance of the model. Because factor 1 and 2’s eigenvalues greater than 1. This process called the scree test.


Figure-10 Scree Plot and Eigenvalue Test

The factor analysis program then calculates a factor loading (or factor pattern) matrix, showing the correlation of the original set of attributes to their underlying factors. Figure 11 shows the rotated factor loading matrix obtained for the swimsuit data. Attribute 1, 2, 4, 7 ‘s values greater than other factor. These are attractive design, stylish, fashionable and designer label. These attributes shed light on the fashion factor. Attribute 3, 5, 6’s values greater than other factor. These attributes are comforatable to wear, i feel good when i wear it, ideal for swimming. These attributes shed light on the comfort factor.


Figure-11 Factor Loading Matrix for Swimsuit Data

Figure-12 Factor –Score Coefficient Matrix


Figure-13 AR Perceptual Map of Swimsuit Brands

The perceptual map(figure 13) shows Aqualine brand is most comfortable brand. Also Sunflare is the most fashionable brand according to the perceptual map. Splash has got low fashion and low comfort level among these brands. The gap 1 and 2 represents opportunity areas in swimsuit market. Gap 1 has got high fashionable and high comport but Gap 2 has got intermediate level fashion and low comfort.

Overall Similarities (OS) Gap Map

Overall similarities techniques do not require customers to rate choices on individual attributes. Purchasing preferences of buyers can not be determined with using attributes. Dimensions of the map can not be determined. Users may have difficulty in giving attribute scores. This method goes on to the similarities of brands. Respondents could rank the pairs from most similar to most dissimilar, or rate pairs on, say, a 1-to-9 Likert-type scale where 1 is “very similar” and 9 is “very dissimilar"(Crawford,2011).


Figure-14 Dissimilarity Matrix of Swimsuit Brands

Figure 14 called the dissimilarity matrix. For example Aqualine and Sunflare are very dissimilar because their value is 9. But Aqualine and Islands are similar according to the dissimilarity matrix. Their value is 3.

Figure-15 OS Perceptual Map of Swimsuit Brands

Figure 15 is overall similarities perceptual map. This map created by multidimensional scaling (MDS). This was done with the computer program. But this map has not any axes. The axes are not provided but it provided the relative positions of these brands. According to the map, Aqualine brand has the highest level of comfort. Sunflare and Splash has the lowest comfort level. A comfort axis can be assumed in the north-south direction. According to the map, Sunflare has the highest fashion level among these brands, Splash has the lowest fashion level. A fashion axis can be assumed in the east-west direction.


Deficiencies of Gap Analysis

Nuances are ignored. Interrelationships are disregarded. The creativity required may not be achieved with gap analysis. Analysis and mapping may have fell from favor. Because the processes are long. Gap analysis discovers gaps, not demand(Crawford,2011).


REFERENCES Crawford, Merle C., (1991), New Products Management, Third and Ten Edition, Irwin, INC:

USA

Philip Kotler (Author), Gary Armstrong (Author) , (Principles of Marketing (15th Edition)

Sally Ann Fraser, (July 1994) , Concept Testing:A Key to Successful Product Development:

Lincoln University

Cooper, R.G. and Kleinschmidt, E.J. New products: the key factors in success. American

Marketing Association, Chicago, 1990.

Cooper, R.G. and Kleinschmidt, E.J. New product success in the chemical industry. Industrial

Marketing Management 22, pp 85-99, 1993.

e.g.WILLIAM GORDON & GEORGE PRINCE , "Introduction to web services for remote

portlets",available at: http://creatingminds.org/articles/synectics.htm

e.g.Tony Buzan.(1972) , "Introduction to web services for remote portlets",available

at:https://www.cleverism.com/18-best-idea-generation-techniques/

e.g.Harshal Desai (2011) ) , "Introduction to web services for remote portlets",available

at:https://www.slideshare.net/hersheydesai/idea-generation-techniques-

28662058?next_slideshow=1

e.g. Edward De Bono(1985) , "Introduction to web services for remote portlets",available

at:https://tr.0wikipedia.org/index.php?q=aHR0cHM6Ly90ci53aWtpcGVkaWEub3JnL3dpa2k

vQWx0xLFfxZ5hcGthbMSxX0TDvMWfw7xubWVfVGVrbmnEn2k

Crawford, M., & Benedetto, A. D. (2011), “Analytical Attribute Approaches: Introduction and

Perceptual Mapping“, Spell, Laura Hurst, New Products Management, Ducham, New York,

NY, pp. 150-164

Plantz, M. C. (2015), Identifying Product Functions, Features and Benefits, pp. 1-4

contentskisi.deu.edu.tr/banu.atrek/mrk 4248 innovation and... · development of concept statements...

Documents