CONCEPT SCREENING: Why PI is Losing Its Appeal · Why PI is Losing Its Appeal ... What does PI really mean? PI is an outcome metric It is a collection of many thoughts and themes:

Nobody’s Unpredictable26 February 2009

Why PI is Losing Its AppealCONCEPT SCREENING:

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Secret codes?

PI:

DWB

PWB

M/MNB

PWNB

DWNB

Top Box / Top Two Box

Overstatement

Purchase Intent:

Definitely Would Buy

Probably Would Buy

Might or Might not Buy

Probably Would not Buy

Definitely Would not Buy

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Why PI?

To predict what consumers will do.

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Why so successful?

Intuitive

Easy to ask, and easy to answer

Correlation with in-market results

Consensus on wording, scale, interpretation

Databases

Why so problematic?

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Does it really predict future?

“Getting Real About Prediction in Marketing Research”

Jan Hofmeyr (Synovate, 2007)

9 studies linking PI to actual behavior (since ’66)

R2 = 0.09

“91% of the variance is not captured by PI”

“We ought to be embarrassed.”

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Guiding you down the innovation path

“Concept Testing: How to Test New Product Ideas Before You Go To Market”

David Schwartz (1987)

Offered warnings on relying on 1 number for determining which concepts should proceed along the innovation path

product can be polarizing

need other metrics too: expensiveness, believability

Need to understand why, diagnostics

Relying solely on PI can be dangerous

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Times are changing

Many more introductions

Analysis by McKinsey (’99 –’03): only 3% were “breakthrough innovations”

Many more line extensions or incremental improvements (“Me-too”)

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“Me-too” products

“Me-Too” products often score well on PI:

Strong brands, trusted

Minor changes to successful products

Easy to understand

Established categories

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“Breakthrough” products

Breakthrough products have a harder time:

Harder to understand / believe

Uncertain about benefits

Uncertain about tradeoffs

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PI problem #1:

Purchase intent advances lineextensions and incrementalinnovations, and killsbreakthrough and targetedproducts.

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Overstatement

57% ≠ 57%

Is the overstatement consistent in a category or country?

How do we assess this number? Is it really intuitive?

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Purchase psychology

"As Time Goes By: Do Cold Feet Follow Warm Intentions for Really New Products Versus Incrementally New Products?"

Anderson, David L., John G. Lynch Jr., Qing Wang (2008)

Journal of Marketing Research, 45 (June), 307-319

Consumers are less likely to claim PI for newer products

Consumers are less likely to follow through on claim

For newer products, PI must be deflated even more

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Clorox Anywhere

New cleaner that kills 99.9% of germs, but is safe to use around kids / food

Trial expectation = 10%

Trial reality = 3%

What happened?

PI: 60% Top Two Box

But safety concerns & believability problems among “DWB” consumers

Consumers may have discounted their concerns, and gave PI anyway

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What does PI Mean?

“I definitelywould buy

that product.”

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What about the database?

“Lets compareit to the

database.”

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PI Problem #2:

Purchase intent does not reflectthe competitive context.

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What drives consumer reaction?

On a concept board:

Price

Brand

Features

New! Folgers CoffeeBlah blah blah blah sdlkf lsdkfjslsoiusdls slk f f slkdfjs kjd fg sdlf ksldfk f sldflskdfoidkf f sdlksdf flsk dfk jfjf lfkf f f lksdfk jdfl sBlah blah blah blah sdlkflsdkfjslsoiu sdls slk f f slkdfjs kjd fg sdlfksldfk f sldfl skdfoidkf f sdlksdf flsk dfkjfjf lfkf f f lksdfk jdfl s

$2.49 for 1kg

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PI problem #3:

Purchase intent fails to discriminatedifferences in concept positioning.

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PI problem #4:

Purchase intent isnot diagnostic.

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Finding the good ideas

0 10 20 30 40 50 60

Concept X

Concept B

Concept C

Concept D

Concept P

Concept Q

Concept F

Concept G

Concept K

If Top Box > 25%,

then proceed to the next stage

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What does PI really mean?

PI is an outcome metric

It is a collection of many thoughts and themes:

Is this category meaningful to me?

Is the product relevant?

Does this product offer something new or better?

What is the tradeoff (price, features, process)?

Do I believe it?

How do I feel about the brand? Variants?

What do you really need to know at this stage of the innovation process? In screening, what are you really searching for? What is the decision criteria to move forward?

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Stronger approaches

Understand your true screening objective.

Identify key ideas or constructs that you can measure individually

Provide clear direction on how to improve

Take into account competitive context

That are directly related / contribute to the net behavior (sometimes about usage, not purchase)

Relevance = meet consumer needs

Differentiation = unique benefit vs. competition

Expensiveness = percieved price vs. competition

Individual attributes

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Human decision making

Jan Hofmeyr confirms:

Psycological and human decision making research indicates:

People are not mechanical calculators

People are comparative

Ambivalence is a fact of life

“…what matters is not how highly a product is rated per se, but how highly it rates relative to others.

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Final thoughts

PI is not bad

Its actually important and special in our industry

But we must use it carefully, particularly with today’s innovation environment.

There are other tools & techniques out there

Evaluate closely your innovation goals, and tools you’re using to move products through stage-gates

Documents

CONCEPT SCREENING: Why PI is Losing Its Appeal · Why PI is Losing Its Appeal ... What does PI really mean? PI is an outcome metric It is a collection of many thoughts and themes: