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New Product Development

New Product Development. Concept Evaluation. Sample Questions. Do people think this is a good idea? How much would people be willing to pay? What color should I make it? Would people pay more to get more____? What kinds of people will be most interested?

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New Product Development

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  1. New Product Development Concept Evaluation

  2. Sample Questions • Do people think this is a good idea? • How much would people be willing to pay? • What color should I make it? • Would people pay more to get more____? • What kinds of people will be most interested? • Are there other uses for this product? • How often will people buy? • How much will they buy? • How many people will buy? • Which of these three versions should I produce? • How much assembly are consumers willing to do themselves? • How much service will people expect?

  3. Techniques • Focus Group Interviews • Perceptual Mapping • Concept Testing • Conjoint Analysis

  4. Focus Group Interviews • Exploratory • Insight into ideas, more than generation of ideas • Sampling • Moderating • Generalize insights, not effects!

  5. Perceptual Mapping • Managerial judgments • Insight into market structure • Insight into similarities/competition • Attribute ratings • Specify attributes; collect data; factor analyze; present means • Overall similarity ratings • Collect data; mds; present positions; interpret structure

  6. Perceptual Mapping Applications • Gaps may suggest new product ideas • Concept positioning can be assessed • Maps can suggest directions for development—ideal points

  7. Concept Testing Quantitative assessment of a concept’s potential and potential for improvement • What is a “product concept”? • Sample properly • Solicit a variety of reactions • Be aware of likely biases • Measures of trial, not repeat

  8. Concept Testing • Measures—PI, frequency, amount, general diagnostics, specific attribute responses, customer characteristics • Analysis—PI, diagnostics, crosstabs

  9. Example: Respondent examines proposed concept(s). • What is your reaction to the proposed product? • Very negative 1 2 3 4 5 6 7 8 9 10 Very positive • Why so positive or negative?________________ • How interested are you in the concept? • Not at all interested 1 2 3 4 5 Very interested • Why did you answer as you did?___________________ • How likely are you to buy this product at a price of $___? • Definitely not / probably not / maybe / probably yes / definitely yes • Explain your answer to #5.______________________ • What are the product’s main strengths?_____________ • What are the product’s main weaknesses?_______________

  10. Additional measures: • How frequently do you buy this product? (categories) • When you buy, how much do you buy? (categories) • How unique do you find this product? • Just like all the rest 1 2 3 4 5 6 7 Very unique • How believable is this product idea? • Impossible to believe 1 2 3 4 5 6 7 Very believable

  11. More questions • How important is this product idea to you? • At a price of $_____, does this product seem to be a good value? • How much interest would you have in this product? • Do you like (specific attribute)? Not at all---very much • Where would you expect to purchase this product? • Where would you look for information about this product? • In which of the following situations would you use this product?

  12. Still more questions • In your own words, describe the main idea of the product________. • Which of the following seems best to describe the product: • (alternative descriptions) • Indicate what you believe about each of the following product features: • (attributes, followed by appropriate scales) • Respondent characteristics: • Demographics • Product use situations • Place of purchase • Sources of information • Attitudes toward competitive brands

  13. Conjoint analysis • Advantages: mimics real decisions, standard metrics, quick and cheap • Process: • Identify attributes and levels • Develop an orthogonal array of descriptions • Identify sample • Collect rating, ranking, or preference data • Analyze

  14. What MBA's Said... Rank Based on Conjoint Job Attribute Salary 6th 1st 2nd 2nd Region of US 5th 3rd Job Location 1st 4th People/Culture 3rd 5th Functional Area 7th 6th Firm Growth 8th 7th Business Travel 4th 8th Opp. to Advance Conjoint Analysis: Why not ask directly about attributes?

  15. Conjoint analysis • Output: • Utility weights, usually 0-1.0 • Attribute importance scores (range of utility/sum of ranges • Applications: • Compare attractiveness of various combinations • Identify “best” product • Identify preference segments • Analyze cost trade-offs • Forecast sales

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