From finding the right approach for screening early-stage ideas to identifying key dimensions for your product’s success, there are a few key points manufacturers need to understand about concept testing – the first being there is more than one thing to consider.
Approach concept testing as a series of stages
In the pharma industry, where development timeframes allow for repeated testing over the course of 3-5 years, product testing follows a stage-gate based approach. This often entails a series of up to 6-7 well-defined stages and milestones.
FMCG/CPG companies used to operate in a similar way. Nowadays, these companies have become more agile, with flexible manufacturing systems and principles, such as lean development. Their process of product development and testing has also become much faster and manufacturers can now start testing almost immediately. This translates to a much shorter time span, of 2-6 months, rather than several years.
Benefit from agile
The time required to run a concept test using traditional methods usually means restricting yourself to 2 or 3 testing stages instead of 6-7. Automation allows for a truly agile vision of test and learn at every stage, where manufacturers benefit from the rigor of iteratively testing initial ideas, features, and benefits.
In doing so, they can create the product that will maximize appeal for their target audience and optimize the marketing strategy around it. This can all happen within the shorter timeframes, resulting from the speed and cost efficiencies created through research automation.
Learn from concept testing failures
Here is a stat that has kept many market researchers up at night: 85% of new product launches fail within their first year of launch. The reality is that the majority of products fail because one of the testing stages was either not completed or not listened to. Unlike advertising, which follows a much more controversial and polarizing testing process, formulating an appropriate testing process for product development will help prevent a bad launch.
That said, FMCG/CPG’s need to take great care in how they approach concept testing. As a matter of fact, there are a few classic examples of new products that were tested badly—notably, the fax machine.
Tested in London during the 80’s, the fax machine failed to capture initial interest and was predicted to be a commercial failure. Had participants been able to understand and assess the utilization of the product – the value of sending documents in seconds, as opposed to hours or days – the results would have been vastly different.
Find the right methodology
Since then, the industry has created much improved and validated concept testing processes. You can implement sophisticated concept testing methods that go beyond just the likelihood of success to specific elements. These could include demographic and psychographic profiling of likely purchasers, media budget for your required level of penetration, line combinations, etc.
The key thing to remember is you need to pick the right methodology for your stage of concept development. Allow for more System 1 (gut and emotional) approaches to screen early stage ideas and build up to more high-touch diagnostics to optimize your winners.
Advanced assessment methods such as price optimization, substitutability analysis, and line optimization through TURF in tools like MARC Rapid Results are key to pin down those critical dimensions of your product’s go-to-market.
Test for disruptive innovation – but the right way
When it comes to disruptive products, the reality is they do tend to be harder to research than an incremental innovation. These type of products make up the majority of the industry’s volume and are completely suited to their standard tools and procedures.
Obviously, the more revolutionary a product, the harder it becomes for consumers to include it in their world. Regarding the few genuine revolutions, such as the introduction of the smartphone, my recommendation to manufacturers is to proceed with ethnographic insight, focusing not just on the form but on the utilization of the new product.
One important shift we are noticing now, particularly with agile solutions like those developed by ZappiStore, is that clients are becoming less likely to stick with one research company throughout their development process.
We are moving to a world where, as a client, you can pick and choose the best agency for each stage of development, playing on the strong suits of each methodology on offer. I can only expect this trend to become stronger in the future, presenting an interesting conundrum on the client and agency side, to say the least.