Concept testing: an insurance policy
The upfront market research you conduct on new product concepts is like an insurance policy on future events. Concept testing helps to reduce the risk of launches by spotting problems early.
Concept testing is how people, without prompting, interpret an idea for a new product or service. (Smith and Albaum, Fundamentals of Marketing Research, Sage Publications, 2006) Concept testing is most often used in concept development to test the success of a new product idea before it is marketed.
Concept analysis or concepts are often used as one step in the process of providing “proof of concept.” Here are the 5 Key Questions you should have answers to before you begin your product concept testing:
1. What is the aim of my concept research?
Concept testing and development provides the direction and guidance necessary to selectively identify and communicate key product or service benefits, uses, packaging, advertising, sales approaches, product information, distribution, and pricing.
2. What’s the right way to test my product concept?
Involve potential consumers and have them provide their reactions to written statements, images or graphics, or actual implementations of the basic idea for the product. Concept testing is most often a go/no go screening that serves to eliminate those concepts that have very little potential.
3. What are the types of concept testing?
A variety of concept testing options are available to help you minimise risk and maximise revenue when entering service, consumer product, and high-technology markets. Our years of directing concept tests have produced a unique perspective on the particular needs of product and service users and decision-makers.
New product concepts
Determine which benefits are most important to customers and which features are most likely to lead to the fulfilment of that promise. Features can be categorised into those that are “need to haves” vs. “nice to haves.” Customer needs must be identified and prioritised for product development and advertising.
Product modifications and upgrades
Modifications and upgrades can reformulate and add new life to existing products and services. Again, prioritise identifying the optimal bundle of features. Differentiating those features that are “need to haves” vs. “nice to haves” is critical in creating products or services that are truly “new and improved,” “new release,” and “upgrade” worthy.
Many products and services offer upgrade or migration paths. For the customer, it is a reflection of a need for the next level of sophistication. 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. Our experts will help you answer such critical questions as “Do benefits outweigh the costs and challenges of changing?” Features, benefits, brands, image, costs, and training are but a few factors that must be considered.
Product usability and serviceability
The most effective concept tests assess the use experience of a specific product or service and determine how that experience can be improved. This research can focus on a variety of areas — some of these include ease of use and 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
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 all change price perceptions and perceptions of value.
4. How do online product concepts help?
The Qualtrics Concept Test Product increases effectiveness by tracking concepts through a key series of psychological and behavioural evaluations. Each of these testing stages focuses on critical needs of the customer and produces actionable information that can drive your corporate product formulation and promotional initiatives.
Identify the core customer needs that lead to acceptance of new product concepts and the new product concepts and ideas that are formulated.
Habits and uses analysis
Identify the core customer habits and uses of the product class for purposes of understanding and segmentation. Habits and uses are critical in understanding
the adoption of new product concepts and the new product concepts and ideas that are formulated.
Concept fulfilment and preference testing
Evaluate the product category as a focus for fulfilling market needs. Inherent in this concept test and fulfilment analysis is tying benefit fulfilment and needs to the positive elements (benefits) and negative elements (inhibitors) that direct the purchase evaluation process.
Decision process assessment
This focuses on the decision and purchasing process. Key influencers and decision makers are all considered as part of the concept test. Each purchaser, decision maker, and influencer involved in the purchase process relies on different information sources to establish the credibility of the product, integration process, benefits, and values actually received.
Monetary returns, psychological returns, and total cost ownership
Understand the specific costs and financial benefits the new product brings to customers. We model and quantify them so they can be used in advertising and sales collateral.
5. Do I need to conduct a product concept test?
The following applications show the value of concept tests to companies.
|Business Need||Product Research Method|
|Are you reaching out to a new market segment?||Qualitative and quantitative research to establish opportunities for new product concepts exist (Needs Analysis)|
|How do your core customers use and interface with the product class?||Qualitative concept testing research to establish the compatibility and needs exist for the new product concepts (Habits and Uses Analysis)|
|Testing a new product concept before the initial introduction?||Qualitative concept tests to assure the promised benefits and fulfilled in the minds of the customers and the that negative associations are minimised in the purchase evaluation process (Concept Fulfilment)|
|Rank and select the best potential product concepts?||Quantitative research to determine fulfilment and preference (Concept Fulfilment and Preference Testing)|
|Determine the optimal pricing point for the alternative new product concept bundles?||Quantitative research to determine customer price acceptability curves (Pricing Testing and Value Analysis)|
|Need the make the final go/no-go decision regarding a new product concept?||Quantitative customer delight analysis to gauge the customers’ initial reactions to the concept (Reaction and Adoption Test)|
|Refine an underperforming new product introduction? Need to test customers’ trial experiences to see if product or communications adjustments can be made?||Qualitative and quantitative concept test to assess congruity of product benefit promises and delivered performance with customer needs and usage patterns (Fulfilment and Concept Delivery Testing)|
Taking your concept test to market
- How are concept tests made actionable to help you manage your products and priorities?
- Roadmap of Development Priorities: Development plans are canceled for three new features because of low priority to customers and high associated development costs.
- Scheduling and Launch Priorities: Based on the concept test, your product is given new priority for launch because of demonstrated greater market potential. The concept test identifies not only market potential, but avoids a potential failure that could have been launched.
- Market Potential: New product uses are discovered through a new product concept test that could double the market potential.
- 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 to the customer receive top priority for development and implementation. Your product or service maintains the competitive advantage by further distancing itself from the competition. Concept tests provide the customer feedback you need to prioritize and implement ahead of the competition.
- Eliminate Product Deficiency: The currently marketed product is evaluated and product performance tests reveal flaws in the current design and implementation. This information is integrated and verified in new concept tests.
- Promotion Planning: Concept tests combined with market analysis help you to understand who is buying, where they can be reached, and most importantly, what message motivates them to respond to your product.
- Increase 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.