Concept-$ales Effect-Test


Which Image- and $ales Effect do alternative concepts achieve?

Companies must develop new products to grow, stay competitive and be profitable, however, experience has shown that innovation is risky and costly. A great majority of new products never make it to the market and those new products that enter the market place face very high failure rates. According to the Fraunhofer company 1919 initial ideas are required, in order to launch 52 new offers, of which again only eleven (= 0.6 per cent) become sweeping successes.

Despite increasing attention to new product development (NPD), the new product success rate has improved only minimally over the last decades. Concept tests are widely accepted as a way to safeguard against unjustified investments, but considerable experience has proven that they often fall short in separating successful concepts from failures. Most concept tests tend to focus on the concept itself but not on future market effects caused by the tested concept alternatives. They measure criteria such as uniqueness, attractiveness, believability, likes and dislikes etc. These questions are of course relevant and should be analysed. But the key objectives, the image and sales effects caused by concepts later in the market are often neglected or not predicted at all.

The key learning emerging from NPD performance analysis is that success is primarily determined by a unique and superior product in the eyes of the consumer. Individual customers use a simple bench mark for comparison: the actual brand most often purchased, thus reducing complexity. This is because the current main brand offers individually the “best problem solution” of all currently known market alternatives. It determines which perceived combination of emotional benefits and factual features at what specific level satisfies optimally the individual need structure of all competitive offers specific respondents are aware of.

The onus is on the new concept to prove that it is better than the current main brand. If it fails to establish this superiority in the perception of recipients, individual consumers will feel no motivation and see no reason to buy the new concept in the future. It is a common marketing experience that long term successful products are only those, which are perceived by sufficient number of customers as being superior and free of negatives. – If real innovations are tested comparisons to current main brands may be not appropriate. Therefore in these cases we use a similar tough tool: a multivariate consistency check analysis. (see innovation for more detail)

Absatz: To get a reliable indication of alternative concepts’ future market chances we use sequential analysis in combination with explorations or the Limbique Emotional Explorer (LEE). The sequential analysis is often also called “significance trouser” (because the statistical analysis schema looks similar to a pair of trousers). The advantage of the sequential analysis that it allows significant tests with a low number of respondents (often 30 respondents are sufficient). This is important if the interviews are expensive (eg. experts, physicians, pharmacists) or only a limited number of concept samples are available. Basis are pair comparisons (eg. comparison of a new concept with the individual main brand or comparision between two alternative concepts).  The “significance trouser” is used only by a limited number of experts which is partly due to the fact that it used to be a top US military secret.

The Concept $ales Effect Test has proven to be an effective tool to safeguard against unjustified investments and to reduce the time it takes to introduce new products successfully at the market. The diagnostic power of the Concept $ales Effect Test is high. This method tells you why the concept potential is not higher and indicate concrete actions what has to be done in order to improve its sales effect in the future (e.g. which image dimensions have to be improved).

The following case studies indicate the opportunities:
WD-40 Case Study