Testing End-of-Life Decision Making by Proxy – Using Conjoint Analysis
Concept Testing Concept Testing Approaches Branding Decisions in Concept Testing Conjoint Analysis.
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Transcript of Concept Testing Concept Testing Approaches Branding Decisions in Concept Testing Conjoint 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
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
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
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
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 5 Compute Individual Value Systems Use MONANOVA for rank order data
Output in the form of standardized utilities
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
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??