Transcript Session 1-Introduction to Marketing

Concept Test
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A concept test is a way to assess consumer interest
in a new product.
Measures (primary)
» Level of interest
» Comparison on a battery of attributes
– with consumer’s regular brand.
– with competitive brands
» Purchase Intention
» Purchase Intention at a price point
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Measures (secondary)
» Open-ended “reason why”
» most important product features.
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Executing a Concept Test
Factual presentation
» presents the bare product concept
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Persuasive presentation
» with product positioning statement
» Story board is as close as possible to what the consumer will
actually see in finished media advertising
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Choice of visual or words depends on how a consumer will
normally think about the concept.
» concept scores must not be compared across options
Factual
Persuasive
Words Only
Visual Only
Words + Visual
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Purchase Measures
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Trial Intent
» Yes-No dichotomous scale often used
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Purchase Intent
» five/seven point scale (definitely buy to definitely will not buy)
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Purchase Frequency or Product Change Frequency.
» Use the average inter-purchase time for category as the midpoint. This helps to measure purchase intent by user
segments.
» Five/seven point scale (for toothbrushes: more than once in
two months, about once in two month, about once in 6
months, about once in 8 months, less that once in 8
months.)
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The Use of Purchase Measures
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What use will you put the relative value of trial and
purchase intent scores to in launch planning?
» Allocation to sampling/consumer promotions versus theme
ad.
» Computing the perceived risk in the category. Why is this
useful?
» Helps to plan price off to consumer versus trade promotion
allocation during launch
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What is the primary use of purchase measures?
» Sales volume per hh per time period equals
%hh who intend to purchase x expected number of
purchases per time period x expected number of units per
purchase
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Using Purchase Intent Data
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There is a strong correlation between intent scores and “actual
trial” in the marketplace for low-ticket consumer product
categories such as toothbrushes.
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But purchase intention measures typically overstate actual
purchase or “final adoption” and steady-state market share.
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Why? What is the problem with this type of concept test?
» Shelf-effect,
» competitive promotions
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Using Purchase Intent Data
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Rules of thumb in package goods categories in the U.S.
» Conservative: convert purchase intent to actual purchase by
considering only the definitely would purchase group as purchasers
- the top box rule.
» Use a 5% confidence interval around the top box score.
» Less conservative is the top box + 20%of the second box(probably
would purchase)
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Remember, trial and first purchase are insufficient to ensure the
success of a consumer product.
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Repeat purchases are required for this. Concept scores do not
predict repeat purchases
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We need a “product test”
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Pre-Test Market Analysis
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Once a concept becomes an actual product, a set of
research tools help managers make go/no-go
decisions on full market introduction and the
supporting marketing mix.
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Costs of test marketing
» alerting competition
» timing of introduction
» representativeness of the test market.
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Pre-test market analysis is sometimes used in place
of a full test market, or to determine whether test
marketing is necessary.
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Basic Structure of Pre-Test Market Models
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Use the hierarchy-of-effects model as a good
descriptor of customer purchase behavior.
Purchase phenomenon broken up into three
behavioral stages:
» Stage 1: Awareness of the product given product concept
and marketing mix.
» Stage 2: Given awareness the trial percentage.
» Stage 3: Given trial, repeat purchase propensity.
» proportion of future category purchases to the new brand.
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Impact of Marketing Factors on Customer
Movement Down the Hierarchy
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Unaware to Aware:
» Advertising, Sampling, Couponing.
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Aware to Trial:
»
»
»
»
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Product concept.
Ad persuasion.
Distribution.
Price.
Trial to Repeat:
» Product quality.
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P(Become a Regular User):
» P(Aware) X P(Trial, given Aware) X P(Regular Use, given
Trial)
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Two Popular Estimation Methods:
A. Bases II (SAMI-Burke)
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Bases II uses information from SAMI-Burke’s huge data base of
new product introductions to obtain the estimates for the
Awareness-Trial-Repeat progression.
Key regularities summarized into three sets of norms:
» Category Norms: These estimate the awareness in the target
market generated by a given marketing plan.
» Concept Tables: Convert buying intention data and awareness
data from consumers in the target market to an actual trial estimate.
» After-Use Tables (from product tests): Customer data on: (1)
stated buying intentions, (2) like/dislike scores, and (3) perceived
price/value are converted into an estimate of the repeat purchase
rate using these tables.
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B. Assessor (M/A/R/C, Inc.)
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Assessor is a simulated test marketing procedure, compressing
the time and space of a traditional test market into a laboratory
situation. Typically,
» Customers from the target population are exposed to advertising for
the new brand through the “folder” method.
» Respondents then “shop” at a mock store set up, where the new
brand and its competitors are available. They are given an amount
of money to spend on their purchase.
» Those buying the new product are called after a typical interpurchase period period and offered a chance to repeat purchase.
» Thus, trial and repeat, and hence long term share, are estimated
given 100% awareness and availability.
» This estimate is adjusted (down) for the planned awareness and
availability.
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How well do they work?
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BASES claims that”90% of their forecasts are within
20% of actual volume and over half are within 10%”
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ASSESSOR claims that average error is 21.5%;
adjusting for actual introduction conditions, the error
falls to 11.6%
Additionally, one of the major values of these
procedures is the diagnostics they provide:
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» these can result in changes in the marketing plan or perhaps
the product itself.
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