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New Product Development Management NPDM 7 Mohsen SADEGHI Department of Graduate School of Management and Economics Sharif University of Technology
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Concept Testing
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Concept Development Process
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Concept Testing: What is it? Concept testing is: closely related to concept selection different from concept selection in that it is based on data gathered directly from potential customer and relies to a lesser degree on judgments made by the development team.
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Concept Testing: What for? 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?
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A seven-step method Step 1: Define purpose Step 2: Choose a survey population Step 3: Choose a survey format Step 4: Communicate the concept Step 5: Measure customer response Step 6: Interpret results Step 7: Reflect on results and process
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Define purpose of concept test Write down the questions the team wishes to answer with the test: – Which of several alternative concepts should be pursued? – How can the concept be improved to better meet customer needs? – Approximately how many units are likely to be sold? – Should development be continued? – …..
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Choose a survey population The underlying assumption is that the survey population reflects the target market. – Ex.: emPower scooter has two main markets: urban consumer college students
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Alternative Concepts
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Choose a survey format Face-to-face interaction – Stopping people at the street Telephone – May be targeted to specific individuals Postal mail – Somewhat slower than other methods, often poor response E-mail: – Similar to postal mail except respondents seem slightly more likely to reply than via postal mail Internet – A team may create a Web site for virtual concept testing
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Communicate the concept Written or verbal description Sketch Photos and renderings Storyboards Video Simulation Interactive multimedia Physical appearance models Working prototypes
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Verbal description The product is a lightweight electric scooter that can be easily folded and taken with you inside a building or on public transportation. The scooter weighs about 12 kg. It travels at speeds of up to 25 kilometers per hour and can go about 20 kilometers on a single charge. The scooter can be recharged in about two hours from a standard electric outlet. The scooter is easy to ride and has simple controls — just an accelerator button and a brake.
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Price Include price in concept description?
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Measure customer response Definitely would buy Probably would buy Might or might not buy Probably would not buy Definitely would not buy
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Concept Testing Example: Electric Scooter
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Sketch
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Rendering
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3D Solid CAD model
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Appearance model
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Storyboard
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Resemblance to marketing...
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Working Prototype
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Beta Prototype
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Production Product
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emPower’s Market Decision: Factory Transportation
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Survey Format PART 1, Qualification – How far do you live from campus? – How do you currently get to campus from home? – How do you currently get around campus? PART 2, Product Description –
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Survey Format PART 3, Purchase Intent – If the product were priced according to your expectations, how likely would you be to purchase the scooter within the next year?
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Survey Format PART 4, Comments – What would you expect the price of the scooter to be? – What concerns do you have about the product concept? – Can you make any suggestions for improving the product concept? Thank you.
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Interpreting the Results: Forecasting Sales Q = N x A x P Q = sales (annual) N = number of (annual) purchases A = awareness x availability P = probability of purchase (surveyed) = Cdef x Fdef + Cprob x Fprob “top box”“second box”
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Summary Concept testing can verify that customer needs have been adequately met by the product concept, asses the sales potential of a product concept, and/or gather customer information for refining the product concept. Concept testing is appropriate at several points in the development process. Seven step method of testing is recommended: – Define the purpose of the concept test – Choose a survey problem – Choose a survey format – Communicate the concept – Measure customer response – Interpret the results – Reflect on the results and the process
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