Concept Testing — How people, without prompting, interpret a deliberately sketchy idea for a new product or service.

Concept testing is most often used in concept development to test the success of a new product idea before it is marketed. Concept analysis is often used as one step in the process of providing “proof of concept.”
(Smith and Albaum, 2010)

Concept tests provide the direction and guidance necessary to identify and communicate key product and service benefits and uses, as well as product specific implementations such as packaging, advertising, sales approaches, product information, distribution, and pricing.

Concept tests identify the perceptions, wants, and needs of the product and service users and decision makers. You can integrate each of these dimensions into a concept test survey.

A variety of concept testing survey formats are available to implement. Each helps to minimize risk and maximize revenue when introducing all types of goods and services to the market.

Why Concept Testing Matters

Concept tests reshape and refine ideas so they have greater potential for market acceptance. Specifically, concept tests:

  1. Indicate concentrated segments of the population to which the product appeals.
  2. Assess the relative appeal of alternative product ideas/configurations/positions. Features desirable to the targeted market segments are highlighted.
  3. Provides necessary information for developing the product and its promotion, distribution, and pricing.

Concept testing provides insight for designing a more optimal product or service. Furthermore, the success of new product ideas can be tested before being marketed. Concept tests are best conducted when the concept has been developed
to the point that it conveys the product attributes, the desired positioning and the intended brand personality.

Actual product concept tests evaluate the core concept through exposure to a story board, sketches, graphics, or even a product mock-up.

Concept tests are pre-design and differ from the pre-market tests and the test markets. These latter check points are conducted later in the development cycle—based on finalized product designs. Pre-tests and test-markets are final verifications to avoid a major market error.

The term concept test is also sometimes thought of as a “proof of concept,” which refers to market viability and market share projections that are often required for venture capital funding.

Concept tests, when made actionable, will laser focus your products and priorities. Specifically, concept tests have the ability to improve the product, shift priorities, and increase the product-market match as explained in the following examples:

  • Roadmap of development priorities: Development plans are cancelled for three new features because of low importance to customers and high associated development costs.
  • Scheduling and launch priorities: Based on the concept test, a product is given higher priority for launch because of a demonstrated greater market potential. The concept test identifies not only market potential but may identify problems leading to potential failure at launch.
  • Potential new uses: New product uses are discovered through a new product concept test that may potentially double product sales.
  • Product Superiority: New features are added to the existing product to meet the demands of customers before the competition responds. The proposed features of greatest value now receive top priority for development and implementation. The product gains a competitive advantage by further distancing itself from the competition. Concept tests help you prioritize and implement ahead of the competition.
  • Eliminate product deficiency: The current product design is evaluated and performance tests reveal flaws in the design and implementation. This information is verified in the new concept tests.
  • Promotion planning: Concept tests combined with market analysis provide understanding of who is buying and where they can be reached. Most importantly we identify the message that motivates customers to respond.
  • Increased profitability: Concept testing shows that we are delivering the best value in the market and have room for a 10% increase in price for the new product

Not All Concept Tests Are Equal

A variety of concept test approaches exist. Each has a different objective and can provide a variety of benefits. Here are the most important of these approaches.

New Product Concept Tests
Identify the benefits most important to customers and the features that are most likely to lead to the fulfillment of that promise. Features can be categorized into “need to haves” and “nice to haves.” Customer needs must be identified and prioritized for product development and communicating to the market. This type of concept test can also test customer initial reactions to the concept (Reaction and Adoption Test ).

Product Modification-upgrade Tests
Reformulations, modifications, and upgrades can add new life to existing products and services. Here, identifying the optimal bundle of features is a priority. Differentiating and timing the release of new features that are “need to haves” vs. “nice to haves” is critical in creating products and services that are truly “New and Improved” and are “New Release” and “Upgrade” worthy.

Migration Path Tests
Many products and services offer upgrade or migration paths. For the customer, this is
 an alternative to the next new thing. Understanding the key features and benefits is critical in mapping consumer needs to the likelihood of upgrading an existing product or adopting a new technology. “Do benefits outweigh the costs and challenges of changing?” Features, Benefits, Brands, Image, Costs, and Training are but a few factors to consider.

Product Usability — Serviceability Tests
Concept use tests assess the use experience. How can the experience with a specific product or service be improved? This research can focus on a variety of areas—ease of use, similarity to current usage patterns, the ability to adapt and use critical feature implementations, and the congruency with current image, usage patterns, and service provisions.

Pricing and Incentives Tests
No one underestimates the importance of price expectations in new product adoptions. Price, incentives, bundling, cross product tie-ins, and cost mitigating factors, such as warranties and use agreements all change price perceptions and perceptions of value. Pricing and incentive tests determine the optimal pricing point for new product concept bundles and can estimate customer price acceptability curves.

Conclusion

Better decisions start with data.

Concept testing helps companies make better decisions for creating optimal products and/or services.

In my next post, I will show you how to conduct a concept test and give you a sample concept test survey.