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Concept Testing “Will the Dogs Eat the Dog Food?”.

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Presentation on theme: "Concept Testing “Will the Dogs Eat the Dog Food?”."— Presentation transcript:

1 Concept Testing “Will the Dogs Eat the Dog Food?”

2 Testing the Product/Service Concept What is it? Validating the value proposition How to do it?Talk to customers

3 Why talk to customers?

4 Market Broad landscape of buyers Segment Subgroup with similar needs Customer Representative of segment willing and able to purchase the product Medical Market Private Clinics Specific Private Clinic Who is the customer?

5 Types of Customers Buyer End-users Partners Joint development partners Licensee Re-seller or distributors Important to recognize layers of value propositions Value to the buyer or partner Value to the end-user or customer Same or different

6 Defining Customers and Segments: First Pass* DescriptionExamples DefinersCharacteristics that delineate customers into groups with similar needs Allows measurement of segments Country or geographic region Size of organization Installed base of other products Professional title/occupation Annual income DescriptorsNon-quantitative characteristics of customer Role in buying decision process Risk tolerance Benefits sought Motivations ContextHow will the customer use this product? Location of use Application In conjunction with other products Frequency of use *modified from So what, who cares, why you? by Wendy Kennedy

7 Concept Testing Plan of Attack

8 Overview Clearly define the product or service concept Identify the type of information needed Identify who has the information Select the best tool(s) for gathering the information Summarize/analyze information

9 Importance of product definition Clearly defined product concepts elicit clear responses Defining the product concept State the problem that your product is meant to solve Offer supporting product attributes (features) to add credibility to the product’s ability to solve the problem Link features to benefits o “Rapid file access will increase throughput 2-fold” o “The lighter weight will reduce fuel costs by 30%” Note: For some, concept testing may be more exploratory Using customer input to help shape/refine product concept

10 Step 1: Identify questions to be answered What are the most pressing questions I need to have answered? Value-network questions Who are the customers with this problem? Are they solving the problem today? How? How significant is the problem? What is the economic impact? What is it’s impact on others?

11 Step 1: Identify questions to be answered (cont) Product-specific questions(value proposition) How relevant is the product to the customer’s needs? What is the perceived value? Need-to-have vs nice-to-have? What is the price sensitivity? How unique is the concept? Are there any certifications or approvals prior to purchasing? What is the purchasing process? Who is involved? How products evaluated? Industry/Market Information Trends in the market Current/Emerging competitors Regulatory issues

12 Step 2: Where to get the information? Primary Sources (people) Product-specific information Examples o One-on-one interviews o Focus groups o Quantitative surveys o Field tests Secondary sources (reports) Broad market information Examples o Internet searches o Market research reports o Analyst reports o Polls and surveys

13 Step 2b: Who to talk to? Customers Buyers End-users Partners Quasi-customers Thought leaders Early adopters Industry experts o American Society of Association Executives Gateway: find industry associations to contact for info. American Society of Association Executives Gateway o ThomasNet: list of industrial trade associations ThomasNet Defined by market segment(s)

14 Step 3: Choose the information gathering tool AdvantagesDisadvantages Personal interviews Allow more 'depth' Allow modification More flexibility based on customer response It can take a long period of time to arrange and conduct. Some respondents will give biased responses when face-to-face with a researcher. Online surveys Cost savings Quick access and response time Easy to cross geographic boundaries/international Possibility for large sample sizes More amenable to data analysis Access to large target audience can be difficult or expensive Low response rate Self-selection can bias results

15 Step 4: Analyze Information Look for consistent, significant trends Possible outcomes Confirm and support concept feasibility Need more information Modify concept based on valid feedback Identify a brand new opportunity No-go

16 Interviews

17 Interview Tips Interviewees Spend time up front finding the right people Leverage the network (personal, coaches, inventors) Associations The Questions Be specific, when necessary o “If you were to use this product today, how much time would you save each week?” Be general, when necessary o “What trends over the next 10 years will most affect your buying decisions” Be quantitative o “On a scale of 1 to 10, with 1 being low and 10 being high, how would you rank the value of this product” o Ask quantitative questions across all interviews

18 Interview Tips II The Interview Prepare questions ahead of time and create worksheet Keep it short and simple One person leads the interview o Useful to have several people attending Ask good follow up questions to explore and probe o “Why do you say that?” o “Could you elaborate on that point” Be on the lookout for great quotes o “Every doctor I know would use this” o “This is one of the most innovative products I’ve seen in years” Balance flexibility with consistency Questions may need to be changed after first several interviews But you need consistent questions across interviews to spot trends.

19 Surveys

20 Onilne Survey Tools Google Docs Survey Gizmo Survey Monkey Zoomerang Qualtrics (MBAs) Many more…

21 Getting Respondents Your network Email Facebook Craigslist Online tools offer distribution for fee Is it worth $100 to test your idea? Facebook ad

22

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24 Examples

25 Example 1 Fitness machine for children “BowFlex for Kids” Combines strength training web portal to track progress and win prizes Target markets Parents with competitive children Middle schools Gyms and fitness centers

26 Market/Customer Definition ParentsSchoolsFitness Centers DefinersParents with middle- school aged children playing in competitive sports Middle schools with after-school sports programs Gyms and fitness centers DescriptorsParents who push children to succeed in sports Parents who live vicariously through children’s athletic success Highly competitive coaches and teachers Schools with strong parent support Private schools? Gyms with large parent membership Gyms that integrate children into activities ContextUse the product at home Input from coaches? As part of the athletic training program In the gym alongside parents At home as part of the membership

27 Questions to be answered Do middle school parents and coaches care about strength training? What would motivate a parent to purchase the product? How do middle schools fund athletics? Which of these three market segments should be targeted first? Which sports would be the best fit? Are there any children’s safety regulations around the product?

28 Who to ask? Parents Friends and family Coaches Local soccer league Middle school coaches School principles Gyms Local gyms and fitness centers YMCA Industry experts Product safety issues

29 Example 2 Biocompatible gel for time release for drug delivery Application: subcutaneous injections of cortisone Time release provides 2x longer effect Target market End user: orthopedic doctor Development partners o Cortisone suppliers and manufacturers

30 Market/Customer Definition Orthopedic DoctorsCortisone suppliers DefinersPrivate practice and hospitalsManufacturers of hydrocortisone DescriptorsDoctors who work in orthopedically active areas (retirement communities) Longer activity = fewer shots Incentive to broaden their product line ContextAs part of a treatment regimenAs part of a product line of treatments

31 Questions to be answered What is the average number of shots per patient? Per doctor? Is increasing the effect two-fold significant? Are orthopedic doctors the only ones who give cortisone shots (primary care physicians)? If the product results in fewer shots, can the doctor charge more? If not, is there a disincentive? What symptoms trigger cortisone shot? What partners have the competencies needed? Regulatory expertise Reimbursement experience

32 Who to ask? Orthopedic doctors UNC Hospitals Other doctors Sports medicine Geriatrics Local sales rep for cortisone Elderly

33 Homework First pass at defining target market(s) Name of market(s) Definers Descriptors Context Questions to be answered Identify at least 10 questions to be answered Prioritize them Sources of information Identify the people to be interviewed Match the questions with the interviewees


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