Chapter 8 - Concept Testing

CONCEPT TESTING
PREPARED BY:
MUHAMAD ZAKI BIN YUSUP
IAR DEPARTMENT
INTRODUCTION
Address personal transportation market of new product concept

Team response - product concept from potential customers
Select concepts that should be pursued,
Gather information to improve concept
Estimate sales potential
Identifying original product opportunity to forms mission statement
Refine demand forecast when nearly complete (before full production
and launch)
Generally follows concept
Key element for economic analysis
Various of testing may be completed at times other than during

concept development
PURPOSE CONCEPT TESTING
Go/no-go decisions
What market to be in?
Selecting among alternative concepts
Confirming concept selection decision
Benchmarking
Soliciting improvement ideas
Forecasting demand
Ready to launch?
At the end of this chapter, student should be able to:
1. Explain what is the purpose of concept testing
2. Apply the concept testing in a product development process.

Concept System-Level Detail Testing and Production
Planning Development Design Design Refinement Ramp-Up
Qualitative Quantitative
Concept Concept
Testing Testing
Mission Development
Statement Identify Establish Generate Select Test Set Plan Plan
Customer Target Product Product Product Final Downstream
Needs Specifications Concepts Concept(s) Concept(s) Specifications Development
Perform Economic Analysis
Benchmark Competitive Products
Build and Test Models and Prototypes

- narrow the set of alternatives
- closely related to prototyping: represent the product concept
7-step method for testing product concepts:

1. Define the purpose of the concept test.
2. Choose a survey population.
3. Choose a survey format.
4. Communicate the concept.
5. Measure customer response.
6. Interpret the results.
7. Reflect on the results and the process.

Step 1: Define the Purpose of the Concept Test
Concept testing is an experimental activity

Purpose of testing should be address
Primary questions :
• Which alternative concepts should be pursued?
• How to improve the concept?
• Approximately how many units to be sold?
• Should development be continued?

Step 2: Choose a Survey Population
reflects the target market for the product
first few questions are called screener questions
fits the definition of the target market

sample size should be large enough to ensure a
confidence in the results
may be prohibitively expensive in cost or time
choose to survey potential customers from only
the largest segment
Step 3: Choose a Survey Format
Face-to-face interaction: Interacts directly with respondent.
Telephone: Target specific individuals
Postal mail: Concept-testing materials sent and

respondents asked to return a completed form
Electronic mail: Similar to postal mail
Internet: Create a virtual concept-testing site

PART 1, Qualification
o How far do you live from campus?
<If not 1-3 miles, thank the customer and end interview.>
o How do you currently get to campus from home?
o How do you currently get around campus?
PART 2, Product Description

o <Present the concept description.>
PART 3, Purchase Intent
o If the product were priced according to your expectations, how likely
would you be to purchase the scooter within the next year?
I would I would I might I would I would

definitely not probably not or might not probably definitely
purchase purchase purchase purchase purchase
the scooter. the scooter. the scooter. the scooter. the scooter.
“second box” “top box”

PART 4: Comments
o What would you expect the price of the scooter to be?

o What concerns do you have about the product concept?
o Can you make any suggestions for improving the product concept?
Thank you.
EXAMPLE
Purpose of concept test:

What market to be in?
Sample population:
College students who live 1-3
miles from campus
Factory transportation
Survey format:
Face-to-face interviews
Step 4: Communicate the Concept
Verbal description: points summarizing the product concept

Sketch: showing the product in perspective
Photos and renderings: when appearance models exist / photorealistic illustrations
Storyboard: series of images
Video: allow more dynamism than the storyboard
Simulation: implemented as software , mimics the function or interactive features of the product
Interactive multimedia: combines visual richness of video with the interactivity of simulation
Physical appearance models: look like real products
Working prototypes: works-like models, to illustrate product appearance and function

EXAMPLE
1. Verbal Description
The product is a lightweight - easily folded ( inside building or on public transportation.
The scooter weighs ~ 25 pounds. Travels speeds up to 15 miles/hour

Can go about 12 miles on a single charge.
Can be recharged in two hours from a standard electric outlet.
Easy to ride and has simple controls — just an accelerator button and a brake.
2. Sketch 3. Rendering 4. Storyboard
3D Solid CAD Model Working Prototype EXAMPLE
Appearance Model Beta Prototype

Matching the Survey Format with the Means of Communicating the Concept
Issues in Communicating the Concept

Must decide how aggressively to promote the product and its benefits
Purchase price of product should be included
May provide extremely high performance or unique features
Instead show single concept, we can ask respondent to select several alternatives.
This approach is attractive when trying to decide among several concepts under
consideration.
Step 5: Measure Customer Response
Most concept test surveys : Communicate product concept then measure

customer response.
In early concept development phase: Customer is been requested to

choose from two or more alternative concepts
Additional questions : Focus on why respondents react that way /how the
product concepts could be improved.
Concept tests : use to attempt to measure purchase intent.
purchase intent scale has five response categories:
Definitely would buy.

Probably would buy.
Might or might not buy.
Probably would not buy.
Definitely would not buy
Step 6: Interpret the Results
If comparing two/more concepts, interpretation

of results is straightforward
If one concept dominates, confident that the

respondents understood choose the preferred
concept
If results not conclusive, choose a concept

based on cost/other considerations, or produce
a multiple versions of the product.
Interpreting the Results: Forecasting Sales
Q=NxAxP
Q = sales (annual)
N = no. of (annual) purchases/ no. of potential customers expected to
make purchases F definitely = survey respondents
A = awareness x availability (fractions) definitely purchase
F probably = survey respondents
P = probability of purchase (surveyed) probably purchase
= Cdef x Fdef + Cprob x Fprob C definitely and C probably are calibration
constants
“top box” “second box” 0.10 < C definitely < 0.50; C definitely = 0.4
0 < C probably < 0.25 ; C probably = 0.2
FORECASTING EXAMPLE
College Student Market
N = off-campus grad students (200,000) Factory Transport Market
30 percent of the students aware of the N = current bicycle and scooter sales to
product factories (150,000)
P = 0.4 x top-box + 0.2 x second-box A = 0.25 (single distributor’s share)
definitely- would-buy fraction of 0.10 P = 0.4 x top-box + 0.2 x second-box
probably-would-buy fraction of 0.05 Definitely-would-buy fraction of 0.30
P = 0.4 x 0.10 + 0.2 x 0.05 = 0.05 Probably-would-buy fraction of 0.20
Q = 2,000,000 x 0.30 x 0.05 = 30,000 Q = 150,000 x 0.25 x [0.4 x 0.3 + 0.2 x
units in the first year 0.2]
= 6000 units/yr
Price point $795 Price point $1500
Production Product
Sources of Forecast Error
Word-of-Mouth Effects
Quality of Concept Description
Pricing
Level of Promotion
Competition
Discussion
Why do respondents typically overestimate purchase intent?

◦Might they ever underestimate intent?
How to use price in surveys?
How much does the way the concept is communicated matter?

◦When shouldn’t a prototype model be shown?
How do you increase sales, Q?
How does early (qualitative) concept testing differ from later (quantitative)
testing?
Step 7: Reflect on the Results and the Process
Primary benefit of concept test :

- feedback from real potential customers.
Qualitative :
- through open-ended discussions with
respondents.
- most important result in early development process.
Team should reflect on this evidence as well as on the

numerical outcome of its forecast.
Concept test - direct response to product description from potential customers in
the target market.
Concept testing - data gathered directly from potential customers (lesser degree on
judgments made by the development team.)
•Concept testing- verify product concept met customer needs, assess the sales
potential, gather customer information for refining the product.
•Concept testing - is appropriate at several different points in the development

process:,
When identifying product opportunity,
Selecting concepts should be pursued,
Assessing the sales potential
Decision for further development process/commercialization
•7 step recommended method for testing product concepts:

1.Define the purpose of the concept test.
2.Choose a survey population.
3.Choose a survey format.
4.Communicate the concept.
5.Measure customer response.
6.Interpret the results.
7.Reflect on the results and the process

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CONCEPT TESTING

Address personal transportation market of new product concept

Various of testing may be completed at times other than during

1. Explain what is the purpose of concept testing

2. Apply the concept testing in a product development process.

Perform Economic Analysis

Benchmark Competitive Products

Build and Test Models and Prototypes

7-step method for testing product concepts:

2. Choose a survey population.

3. Choose a survey format.

4. Communicate the concept.

5. Measure customer response.

6. Interpret the results.

7. Reflect on the results and the process.

Concept testing is an experimental activity

• How to improve the concept?

• Approximately how many units to be sold?

• Should development be continued?

fits the definition of the target market

Face-to-face interaction: Interacts directly with respondent.

Telephone: Target specific individuals

Postal mail: Concept-testing materials sent and

Electronic mail: Similar to postal mail

Internet: Create a virtual concept-testing site

PART 2, Product Description

I would I would I might I would I would

“second box” “top box”

o What would you expect the price of the scooter to be?

Purpose of concept test:

Verbal description: points summarizing the product concept

Working prototypes: works-like models, to illustrate product appearance and function

The product is a lightweight - easily folded ( inside building or on public transportation.

The scooter weighs ~ 25 pounds. Travels speeds up to 15 miles/hour

Can be recharged in two hours from a standard electric outlet.

Appearance Model Beta Prototype

Issues in Communicating the Concept

Purchase price of product should be included

May provide extremely high performance or unique features

Most concept test surveys : Communicate product concept then measure

In early concept development phase: Customer is been requested to

Concept tests : use to attempt to measure purchase intent.

purchase intent scale has five response categories:

Definitely would buy.

If comparing two/more concepts, interpretation

If one concept dominates, confident that the

If results not conclusive, choose a concept

Why do respondents typically overestimate purchase intent?

How to use price in surveys?

How much does the way the concept is communicated matter?

How do you increase sales, Q?

Primary benefit of concept test :

Team should reflect on this evidence as well as on the

•Concept testing - is appropriate at several different points in the development

•7 step recommended method for testing product concepts:

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