the woes and throes

It was late afternoon. Streaks of golden sunrays beamed through the glass window of the corner office and brightened up the grand mahogany table. Behind it stood Alex – fidgeting every now and then, but otherwise lost in deep thought. Alex is the Product Manager of a multinational CPG firm. On his table lie two apparently harmless reports. But together, they have been playing foosball with his mind’s peace. The first report is a gem of a product idea that Alex has painstakingly put together. The other is a research publication that says more than 90% of all new product launches – fail!

As excited as Alex is with his brilliant idea, he is helplessly unsure of how the market would respond to it. How could he possibly know the reaction of the thousands of potential buyers?

While that is a million dollar question, fortunately, the answer is not too farfetched – thanks to the trusted and respected “Concept Test”!

Concept Test has been one of the most helpful tools in a marketer’s kitty, when it comes to testing waters, for a new product launch. It is an efficient way of gauging customers’ reaction to a product idea prior to committing resources towards its development.

Houston, we have a problem
“This is exactly what I need”, exclaimed Alex. But that is only part of the story. In the process of materialising a concept, a marketer comes across a plethora of challenges at every stage of testing.

Some of these challenges are:

Is the stimulus stimulating?
Apt translation of an idea into the right stimulus is a pre-requisite of Concept evaluation. Appropriate representation of the salient features in a proposed offering, provides clarity and helps elicit true responses On the other hand, oftentimes, marketers unknowingly overload a stimulus with too many claims and ‘reasons to believe’. Rather than improving clarity and generating interest, this could lead to the ‘problem of plenty’ which makes a concept difficult to comprehend.

Another focus area is to effectively convey how a new offering is an improvement over the products already existing in the market.

One too many
Problem of plenty is an issue while deciding on the number of concepts to be tested. With more concepts per respondent, fatigue creeps in, thereby rendering the responses unreliable.

What’s in a score?
Interpretation of Concept test results is a major challenge for the marketer and the researcher alike. It’s difficult for a marketer to interpret the score as is (whether it’s good, bad or ugly) if there are no predefined benchmarks. Biggest challenge for marketers lies in reconciling the KPI scores from a Concept test to specific business goals.

Cannibalization – is it happening?
A concept test study isn’t going to highlight the impact of the introduction of a new product on the rest of the products of the same brand / company. The challenge is to measure the impact of cannibalization through concept evaluation, which is indeed a drawback.
Price is what you pay – value is what you get
In the initial stages of concept development, it’s difficult to understand the association of price with the idea. Although price testing is a continuous process but it is however a challenge to identify the price point/ price range in such initial stages of development. Needless to say it’s an important parameter of concern for the marketers.

Keeping pace with innovation
It’s a challenge for a marketer to keep up the pace of research and ensure that it doesn’t turn out to be a bottleneck for innovation. Time lag in setting up a Concept Test, recruiting respondents and analyzing results can potentially delay a concept’s time to market.

Alex has to take the most appropriate decision to solve his business problem amidst the existing challenges. It is a pleasant afternoon and the rays from the sun are radiating from the window panes. The shining sun gives him a sense of hope that there will be a way.

Authored by Soumya Sarkar – Consultant, Market Research Practice at Absolutdata and
Sanchi Bhatia – Research Analyst, Market Research Practice at Absolutdata.