Product test range presentation

CDB Marketing Conseil

The PROD-TEST range

A range of market test methodologies

Presentation


Introduction

The PROD-TEST range has been designed in order to provide key market insights as regards minor to major product/services innovations.

– PROD-TEST1: a quick test to measure the perception, understanding and purchasing intentions caused by the addition/modification of one of the key specifications of an existing product/service.

– PROD-TEST2: a market test that provides the essential data for a new product or service launch/launch not decision, and eventually what remains to improve.

– PROD-TEST3: a complete market test including 2-year sales forecasts.

The PROD-TEST range presentation 208/12/2011


PROD-TEST 1

Forecast of the perception, understanding and purchasingintentions caused by the addition/modification of one of the key specifications of an existing product/service.



Methodology

Interview of 200 potential consumers:

– Awareness of the product/service modification: seen/not seen

– Global perception & on some key attributes

– Perceived benefit

– Intentions:

• To go-on purchasing the product/service (current customers)

• To adopt the product/service (not yet customers)

• To increase the consumption of the product/service

• To recommend to others



Case study (1)


Test of a new cap for a toothpaste

76%

17%

7%

Seen Not seen DK30%

25%

20%

15%

8%

70%

75%

80%

85%

92%

Convenient

Aesthetic

Protect content

Easy to use

Resistant

No

Yes

Have noticed the new cap : How many find it…

10%17% 73%

A minus

No impact

A plus

For you, this new cap is…. Intentions

92%

17%73%

Continue Increase Recommend

Current Customers

14%

37%

Adopt Recommend

Prospects


Case study (2)

Based on the PROD-TEST1 results for this new cap, our conclusions were:

– This new cap is a success:

• It has been noticed by 73% of the respondents

• It is considered as effective by more that 80% of them

– There is a market opportunity in replacing the existing cap by a new one, similar to the one tested

• 17% of additional purchases intentions among current customers

• Adoption rate of 14% among prospects

– The new cap should be smaller than the tested one:

• Only 70% find it convenient

• 75% find it aesthetic.

Finally, the launch of a smaller new cap enable the brand to gain an additional 1.7% market share in one year.



PROD-TEST2

A market test that provides the essential data for a new product or service launch/launch not decision, and eventually what remains to improve.



Objective and global scheme

The key asset of PROD-TEST2 is to understand and assess the impact of the launch of a new product or service, upon the consumption of its market.

PROD-TEST2 has been conceived to measure its sales potential, according to the various parameters of its marketing mix (product, price, communication, distribution).

In order to achieve these objectives:


We interview a representative sample of individuals about their current awareness, perception and consumption of similar/comparable products or services (which brand? how frequently? where have they been purchased? etc.)

And then, through multiple trade-offs, we assess the impact of the launch of the new product or service upon the original consideration set.


Sample

The sample will be composed of individuals who could purchase the new product in a reasonably short period of time (depends on the average purchasing frequency of this type of product/service)



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Questionnaire description

1. Definition of the « consideration set »

– The consideration set is composed by all the products/services that can compete with the new one to test.

– Purchasing frequency: which is the buying frequency of each of the products/services of the consideration set?

– Intentions: on a 10-point scale, how many points does one give to each product/service of the consideration set, according to the probability that he will purchase it within a short period of time?

– Most important selection criteria:

• To purchase a product or a service within the category

• That can be associated to one or more of the products/services of the consideration test.



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Questionnaire description (2)

2. New product/service presentation

– Presentation of a concept board detailing its characteristics, functions, options, price and distribution. It shall include its specific and competitive assets, and be as exhaustive as possible.

– Purchasing intentions (on a 10-point scale for example) followed by 2 open questions about the likes and dislikes

– Dual comparisons with each product/service of the consideration set (distribution of 10 points between the two, according to the level of preference of the new product/service)

– How does the tested new product/service fulfill the selection criteria? (on a 10-point scale)

– Conjoint analysis in order to measure the price sensitivity

NB: this part can easily be replaced by a home-test (or a POS test).



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Questionnaire description (3)

3. Questionnaire conclusion

Other questions can be added to the « model » ones, in order to better explain the obtained results.

Among the descriptive variables, will be assessed:

– Exposition rate to the elements of the launch marketing plan (advertising…),

– Usual frequentation of the distribution spots.



Model principles

Evaluation of an overall sales volumebased on:

• The share taken by the new product/service within the consideration set

• The overall category volume evolution

Individual modulation of the buying probability, depending on the envisaged launch marketing plan:

• Probability for one individual to be exposed to it, which depends on his frequentation habits

• The individual impact of this exposure on his buying probability.



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Necessary data


1 - Market data

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2 - Sales data

PROD-TEST2 needs 2 sets of data:

The product or service category, and the global evolution of this category in volume. At this stage, even partial data are interesting and useful, provided that we can draw realistic and acceptable hypothesizes on the missing parts.

Ideally 3-year sales data of products/services of the same category as the new one (among which the consideration set)


103.3%

96.4%

107.9%

97.0%

99.6%

88.4%

92.3%

94.2%

102.8%

110.1%

107.1%

101.0%

jan

fév

mar

avr

mai

juin

juil

aoû

sep

oct

nov

déc

Case study (1)


Context : test of a new recipe for the category leader

– Product category: chocolate cream (desert)

– Population base: 25 890 French households

– Current penetration rate (category): 19.6%

– Purchasing frequency (category): 10.24/year

– QA (quantity per purchasing act): 0.75

Seasonality


Case study (2)

Results of PROD-TEST2:


Volume spread A-1 A D

TESTED PRODUCT 12 106 12 347 1.99%

Competitor 1 33 37 12.12%


Competitor 3 311 332 6.75%

Competitor 4 86 57 -33.72%


Competitor 6 933 1 059 13.50%

Competitor 7 542 609 12.36%

Competitor 8 86 26 -69.77%

Competitor 9 107 121 13.08%

Competitor 10 108 119 10.19%

Competitor 11 193 140 -27.46%

TOTAL CATEGORY 14 562 14 908 2.38%

The launch of the new recipe benefits to the whole product category.

The volume increase of 2.38% is largely due to the +1.99% caused by the adoption of the new recipe.

This market share growth is obtained to the detriment of competitors 4, 8 and 11.

Our recommendation is:

GO !

At category level A-1 A D

Penetration rate 19.60% 19.80% 1.02%

1st repurchase rate 64.80% 64.90% 0.15%

Total purchasing frequency 10.24 10.40 1.57%

Repurchasers frequency 14.34 14.55 1.49%

QA 0.75 0.75 -

Volume (tons) 14 562 14 908 2.38%


PROD-TEST3

A complete market test including 2-year sales forecasts.



Objective and global scheme

Based on PROD-TEST2, PROD-TEST3 assesses the impact of the launch of a product or service, upon the consumption of its market.

In addition PROD-TEST3 has been conceived to forecast its sales potential, according to the various parameters of its marketing mix (product, price, communication, distribution). The evolution can be forecasted for the 2 coming years, on a monthly basis.

In order to achieve these objectives:

Additional questions as regards individuals reactions to advertising and communication enable us to forecast the evolution of the new product/service market share on a 2-week basis, during the 2 first years.


We interview a representative sample of individuals about their current awareness, perception and consumption of similar/comparable products or services (which brand? how frequently? where have they been purchased? etc.)

And then, through multiple trade-offs, we assess the impact of the launch of the new product or service upon the original consideration set.


......

......

…

Necessary data


1 - Market data

......

.....

......

.

2 - Sales data

3 – Launch plan

PROD-TEST3 needs 3 sets of data:

The product or service category, and the global evolution of this category in volume. At this stage, even partial data are interesting and usefull, provided that we can draw realistic and acceptable hypothesises on the missing parts.

Ideally 3-year sales data of products/services of the same category as the new one (among which the consideration set)

Marketing launch plan: which are the planned actions in terms of distribution, price, advertising, etc.?


Deliverables


A forecast of success/failure for the tested product/service.

A tool to evaluate and adjust the sales of the new product/service on a 4-month basis, for the 2 first years after launching, according to the variation of the marketing mix parameters (price, promotion, distribution)


103.3%

96.4%

107.9%

97.0%

99.6%

88.4%

92.3%

94.2%

102.8%

110.1%

107.1%

101.0%

jan

fév

mar

avr

mai

juin

juil

aoû

sep

oct

nov

déc

Case study (1)


Context : test of a new density for the category leader

– Product category: chocolate mousse

– Population base: 25 890 French households

– Current penetration rate (category): 5%

– Purchasing frequency (category): 2.83/month

– QA (quantity per purchasing act): 0.45

Seasonality


Case study (2)

Launch communication plan: 2 options

– Plan 1:

• Share of promoted stores: 6.5%

• TV expenses:

– Year 1: 450

– Year 2: 450

– Year 3: 450

– Plan 2:

• Share of promoted stores: 6.5%

• TV expenses:

– Year 1: 900

– Year 2: 900

– Year 3: 900



Case study (3)



Communication plan 1 Communication plan 2

At category level A-1 A1 A2 A3 A1 A2 A3

Penetration rate 5.00% 5.00% 5.30% 5.40% 5.00% 5.30% 5.40%

1st repurchase rate 58.40% 58.50% 61.10% 61.40% 58.60% 61.20% 61.50%

Total purchasing frequency 2.83 2.85 2.98 2.99 2.86 3.00 3.01

Repurchasers frequency 4.13 4.15 4.25 4.25 4.18 4.27 4.27

QA 0.45 0.45 0.46 0.46 0.45 0.46 0.46

Volume (tons) 1 660 1 676 1 875 1 914 1 693 1 894 1 933

Volume spread A-1 A1 A2 A3 A1 A2 A3

TESTED PRODUCT 1 029 910 1 017 1 039 919 1 029 1 049

Competitor 1 62 85 95 97 86 96 98

Competitor 2 13 2 2 2 2 2 2

Competitor 3 69 122 137 140 123 138 141

Competitor 4 25 14 15 16 14 15 16

Competitor 5 - 2 2 2 2 2 2

Competitor 6 215 279 312 318 282 315 322

Competitor 7 123 150 168 171 151 169 173

Competitor 8 17 9 10 10 9 10 10

Competitor 9 25 36 41 42 37 41 42

Competitor 10 26 29 32 33 29 33 33

Competitor 11 56 38 44 44 39 44 45

TOTAL CATEGORY 1 660 1 676 1 875 1 914 1 693 1 894 1 933


Case study (4)


– The new density appears to be deceptive, and mostly benefits to competitors 1, 3, 6 and 7.

– Whatever communication plan is chosen between 1 or 2, the launch of the new density for this chocolate mousse results in a sales reduction on Year 1.

– The initial sales volume can only be reached on Year 2 if the brand prefers the most expensive communication plan (plan 2)



Previous experiences

PROD-TEST2 have been created and launched more than 15 years ago (9 years for PROD-TEST3) and continuously improved since then.

Client porfolio:


AMORA DR OETKER K.J.S. PERREAULT

B'A ELLE & VIRE KODAK PERRIER

BAHLSEN EVIAN KRONENBOURG PILLSBURY

BALLENTINE FERRERO LACTALIS PRESIDENT

BELADLER FINDUS LACTEL RAMBOL

BENEDICTA FLEURY MICHON LIEBIG REMY COINTREAU

BESNIER FROMARSAC L'OREAL SARA LEE

BLEDINA G.S.K. LOTUS SAUPIQUET

BONGRAIN GALBANI LUSTUCRU / R.C.L. SCHWEPPES

BORDEAU CHESNEL GARNIER MAILLE STELLA ARTOIS

BRESSOR ALLIANCE GENERAL MILLS MARIE / UNIGATE TEISSEIRE

BRIDEL GRANINI MATERNE UNILEVER

BUDWEISER HAAGEN DAZS MOET HENESSY UNITED BISCUITS

CADBURY HANDY BAG MONT BLANC V.P.S.A.

CAMPBELL HARRY'S NESTLE VITTEL

COCA COLA HEINEKEN NIVEA VOLVIC

COLGATE HEINZ ORANGINA WILKINSON

DANONE HERO P & G WILLIAM SAURIN

DIM / WELL HERTA PANZANI YOPLAIT

DOUWE EGBERTS HEUDEBERT PERNOD

Product test range presentation

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