1. Teaching materials to accompany:
Concept Testing
Teaching materials to accompany:
Product Design and Development Chapter 9
Karl T. Ulrich and Steven D. Eppinger 5th Edition, Irwin McGraw-Hill, 2012.

2. Product Design and Development Karl T. Ulrich and Steven D
Product Design and Development Karl T. Ulrich and Steven D. Eppinger 5th edition, Irwin McGraw-Hill, 2012.
Chapter Table of Contents:
Introduction
Development Processes and Organizations
Opportunity Identification
Product Planning
Identifying Customer Needs
Product Specifications
Concept Generation
Concept Selection
Concept Testing
Product Architecture
Industrial Design
Design for Environment
Design for Manufacturing
Prototyping
Robust Design
Patents and Intellectual Property
Product Development Economics
Managing Projects

3. Product Development Process
Planning
Concept
Development
System-Level
Design
Detail
Design
Testing and
Refinement
Production
Ramp-Up
Qualitative
Concept
Testing
Quantitative
Concept
Testing

4. Concept Development Process
Mission
Statement
Development
Plan
Identify
Customer
Needs
Establish
Target
Specifications
Generate
Product
Concepts
Select
Product
Concept(s)
Test
Product
Concept(s)
Set Final
Specifications
Plan
Downstream
Development
Perform Economic Analysis
Benchmark Competitive Products
Build and Test Models and Prototypes

5. Outline Essence of concept testing
Process for product concepts testing
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6. Nature of concept testing
Further narrow the set of concepts under consideration,
based data gathered from potential customers in the target markets, rather than the judgments made by the development team
Specific Objectives
Select one from multiple concepts,
Gather information on how to improve a concept, and
Estimate the sales potential of the product
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7. Input and output Input to the potential customer
Prototype
Output from the potential customer
Likelihood for the potential customer to buy the product
Estimate of how many units of the product the company is likely to sell
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8. Purposes for 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?
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9. Concept testing process
Define the purpose of the concept testing
Choose a survey population and sample size
Choose a survey format
Communicate the concept
Measure customer response
Interpret the results
Reflect on the results and the process
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10. Define the purpose (step 1)
Which of the alternative concepts should be pursued
How can the concept be improved to better meet customer needs
Approximately how much units are likely to be sold
Should the development be continued
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11. Choose a survey population and sample size (step 2)
Sample size varies from a few to thousands
Factors affecting the sample size
The stage of product development
Cost to conduct survey
Nature and intent of the survey
Budget (amount) of the development project
How possible to collect the intended information.
Possible to structure multiple surveys with different objectives at different stages.
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12. Choose a survey format (step 3)
Face to face interaction
Telephone
Postal mail
Electronic mail
Internet (a test site on the internet)
Each has its pros and cons
Each has its bias.
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13. Communicate the concept (step 4)
Communication means
Verbal description
Sketch
Photos and renderings
Storyboard (a series of images shown a temporal sequence of actions involving the products)
Video (allowing more dynamic than the story board)
Simulation
Interactive multimedia (video and simulation)
Physical appearance model (looks-like)
Working prototypes (works-like)
Survey formats vs. means, page 154
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14. Measure customer response (step 5)
Measurement
Mere their preferences among alternative concepts
Understand why and how they respond to the product concepts
Attempt to measure purchase intent (the likelihood of buying)
But avoid aggressively promoting the product concepts
The solution space?
Alternative function diagrams?
Alternative ways to decompose the problem?
Additional external resources?
All ideas generated and integrated?
Survey form, page 156.
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15. Interpret the results (Step 6)
Q = N x A x P
Where P = Cd x Fd + Cp x Fp
Q = the quantity of the expected sales
N = the number of potential customers expected to buy
A = the fraction of these potential customers aware of the product and the product is available
P = the the probability that the product is purchased if the customer is aware of it and it is available.
Fd = the the fraction of survey respondents indicating that they would definitely purchase
Cd = the percentage that those in Fd will actually buy (.1-.5)
Cp = the percentage that those in Fp will actually buy (0-.25)
Be aware that sales also depends on
Words of month
Fidelity of the concept description
Pricing
Level of promotion
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16. Market sizes Population and demographic data
Sales volume of various products
Airplanes
Machine tools
Cars
Hand tools
Printers
Ball pens
Razor blades
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19. Concept Testing Example: emPower Electric Scooter

20. Scooter Example Purpose of concept test: Sample population:
What market to be in?
Sample population:
College students who live 1-3 miles from campus
Factory transportation
Survey format:
Face-to-face interviews

21. Communicating the Concept
Verbal description
Sketch
Photograph or rendering
Storyboard
Video
Simulation
Interactive multimedia
Physical appearance model
Working prototype

22. 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 25 pounds. It travels at speeds of up to 15 miles per hour and can go about 12 miles 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.

23. Sketch

24. Rendering

25. Storyboard

26. 3D Solid CAD Model

27. Appearance Model

28. Working Prototype

29. Beta Prototype

30. Video Animation Interactive Multimedia Live Demonstration

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

32. 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?
I would definitely not purchase the scooter.
I would probably not purchase the scooter.
I might or might not purchase the scooter.
I would probably purchase the scooter.
I would definitely purchase the scooter.
“second box”
“top box”

33. Survey Format PART 4, Comments Thank you.
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.

34. Interpreting the Results: Forecasting Sales
Q = N x A x P
Q = sales (annual)
N = number of (annual) purchases
A = awareness x availability (fractions)
P = probability of purchase (surveyed)
= Cdef x Fdef + Cprob x Fprob
“top box”
“second box”

35. Forecasting Example: College Student Market
N = off-campus grad students (200,000)
A = 0.2 (realistic) to 0.8 (every bike shop)
P = 0.4 x top-box x second-box
Q =
Price point $795

36. Forecasting Example: Factory Transport Market
N = current bicycle and scooter sales to factories (150,000)
A = 0.25 (single distributor’s share)
P = 0.4 x top-box x second-box
Q = 150,000 x 0.25 x [0.4 x x 0.2]
= 6000 units/yr
Price point $1500

37. emPower’s Market Decision: Factory Transportation

38. Production Product

39. Sources of Forecast Error
Word-of-Mouth Effects
Quality of Concept Description
Pricing
Level of Promotion
Competition

40. 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?

41. Other Images

42. Issues to discuss
Why do respondents typically overestimate purchase intent?
Might they ever underestimate intent?
How to use price in surveys?
Or how much would the customer be willing to pay?
How much does the way (the concept is communicated) matter?
When shouldn’t a prototype model be shown?
How do you increase sales?
How does early (qualitative) concept testing differ from later (quantitative) testing?
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43. Sources of Forecast Error
Word-of-Mouth Effects
Quality of Concept Description
Pricing
Level of Promotion
Competition
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