Product Management_Presentation

8/9/2019 Product Management_Presentation

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PRODUCT DEVELOPMENTPRODUCT DEVELOPMENT(Conjoint analysis(Conjoint analysis -- concept testingconcept testing -- test marketingtest marketing -- launch)launch)

Soumyajyoti Halder

ShubhamYadav

Kaushal

Saurabh Pathak

AntrikshAgarwal

Ganesh Chetty18th August, 2010


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AGENDAAGENDA

Introduction

Conjoint Analysis

Concept Testing

Test Marketing

Product Launch


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IntroductionIntroduction

y Metric/non-metric input (preferences)converted to interval scaled output(utility)

y I like IBM more than Toshiba, which I likemore than Fujistu.

y What does it mean to say about my likingfor Laptops?

y An interval level scale for preference isneeded.


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ObjectivesObjectives

y To determine the contributions of predictor variables

and their respective values to the determination of

consumer preferences.

y To establish a valid model of consumer judgments useful

in predicting the consumer acceptance of any

combination of attributes, even those not originally

evaluated by consumers.


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A Simple ExampleA Simple Example

y To develop a new GolfBall.

y 3 important product features were

identified from Experience and talking

with Golfers

Average driving distance

Average Ball Life

Price


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Feasible alternatives from each of this FeaturesFeasible alternatives from each of this Features

Average

Driving

Distance

Average

Ball life Price

275 yards 54 holes Rs. 125




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the ideal ballthe ideal ball fromfrom the cost of Manufacturing perspectivethe cost of Manufacturing perspective

would bewould be

Average Driving

Distance

Average Ball life Price


Obviously the Ideal Product would be :Obviously the Ideal Product would be :

Average Driving

Distance

Average Ball life Price



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Traditional research Project might start by considering the ranking for distance

and ball life.

Rank Average

Driving

Distance

Rank Average

Ball life

1 275 yards 1 54 holes



This type of Information doesnt tell us anything that we didnt already know

about which ball to produce.(product development)


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Now considering the same features conjointly

(Ranking given from 1 to 9 scale)

Group 1 Average Ball Life

54 holes 36 holes 18 holes

Average

DrivingDistance

275 yards 1 2 4

250 yards 3 5 6225 yards 7 8 9



Average

Driving

Distance

275 yards 1 3 6

250 yards 2 5 8

225 yards 4 7 9


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Figure out a set ofvalues for Driving Distance & a second for Balllife for Group 1,

so that when we add these values together for each ball they reproduce Group 1

rank orders


54 holes

50

36 holes

25

18 holes

0

Average

Driving

Distance

275 yards100

(1)150

(2)125

(4)100

250 yards

60

(3)

110

(5)

85

(6)

60

225 yards0 (7)50 (8)25 (9)0

Note We could have picked many other sets of numbers, that would have worked,

so there is some arbitrariness in the magnitudes of this numbers, even though their

relationships to each other are fixed.


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Price

Rs. 125 1 4 7

Rs. 150 2 5 8

Rs. 175 3 6 9


54 holes

50

36 holes

25

18 holes

0

Price

Rs. 125

20

(1)

70

(4)

45

(7)

20

Rs. 150

5

(2)

55

(5)

30

(8)

5

Rs. 175

0

(3)

50

(6)

25

(9)

0

Now, Suppose Group 1 is willing to make trade-offbetweenballlife and Price.

The following figures shows a set ofvalues for price that whenadded to those

balllife reproduce the ranking for group 1.


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We now have a complete set ofvalues(referred to as Utilities or Part-Worth) that

capture group 1s Trade-off

Average Driving

DistanceAverage Ball Life Price

275 yards 100 54 holes 50 Rs. 125 20

250 yards 60 36 holes 25 Rs. 150 5225 yards 0 18 holes 0 Rs. 175 0

We would use this information to produce which ball to produce.


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Suppose we were considering one of two golf balls shown in the

following figure

Distace ball Long-Life BallDistance 275 250

Life 18 50

Price Rs. 150 Rs. 175

Group 1 Distance ball Long-Life Ball

Distance 275 100 250 60Life 18 0 54 50

Price Rs. 150 5 Rs. 175 0

Total Utility 105 110

The values when added gives an estimate of the preferences of

the cluster


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Research Problem

Define Stimuli (factors and levels)

Basic model form

Data collection

Full profile Trade off Pairwise

DataCollection (Create stimuli)

Factorial design Fractional factorial

Select preference measure

Form of SurveyAdministration

Assumptions

Select estimation technique

Evaluate results

Interpret results

Validate

Apply results

Conjoint Analysis

Decision Process

This technique requires alot of

upfront work to think through the

design, data collection, and

analysis options.


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Managerial Uses of ConjointManagerial Uses of Conjoint

AnalysisAnalysis

1. Find the product with the optimum setof features

2. Determine the relative importance ofeach feature in consumer choices

3. Estimate market share among products

4.Identify market segments

5. Evaluate the impact of price changes orother marketing mix decisions.


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CONCEPT TESTINGCONCEPT TESTING


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CONCEPTCONCEPT TESTINGTESTING

y Concept testing is the process of using

quantitative methods and qualitative methodsto evaluate consumer response to a product

idea prior to the introduction of a product

to the market


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QUALTATIVE METHOD OF CONCEPTQUALTATIVE METHOD OF CONCEPT

TESTINGTESTING

y Concept testing has been performed

using field surveys, personal interviews

and focus groups, in combination with

various quantitative methods, to generate

and evaluate product concepts.


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QUANTATIVE METHOD OF CONCEPTQUANTATIVE METHOD OF CONCEPT

TESTINGTESTING

The quantitative portions of concept testing

procedures

have generally been placed in three categories :-

1. Concept evaluations,where conceptsrepresenting product ideas are presented to

consumers in verbal or visual form and then

quantitatively evaluated by consumers by

indicating degrees of purchase intent, likelihood

of trail,etc.,


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QUANTATIVE METHOD OF CONCEPTQUANTATIVE METHOD OF CONCEPT

TESTINGTESTING

y 2) positioning, which is concept evaluation

wherein concepts positioned in the same

functional product class are evaluated together,and

y (3) product/concept tests, where consumers

first evaluate a concept, then the corresponding

product, and the results are compared.


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TEST MARKETINGTEST MARKETING


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Test marketing is the phrase commonly used toindicate an experiment, study, or test that isconducted in a field setting.

Test marketing is a technique used in developmentof new product to determine peoples response

towards the product.

Test marketing main purpose:

To test the sales potential for a new product orservice

To test variations in the marketing mix for aproduct or service


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Pros:

Allows most accurate method of forecastingfuture sales

Allows firms the opportunity to pretestmarketing mix variables

Cons:

Does not yield infallible results

Are expensive

Exposes the new product or service to

competitors Takes time to conduct


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PRODUCT LAUNCHPRODUCT LAUNCH


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Two sides of same coin:Two sides of same coin:

Innovation and New product developmentInnovation and New product development

Innovation New product

development

Innovation is the foundation for

growth through NPD: a new

product starts with a breakthrough

idea.

An innovative culture is the key forany organization seeking long term

growth through NPD

The idea means nothing if the

company isnt quick (or disciplined)

enough to get into the hands of the

customers.

A process for fairly examining

ideas potential discouragesorganizational biases.


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New product launchNew product launch

y It is unusual for a new product to gain success

on its own- regardless of how innovative or

breakthrough it may be- to deliver revenue for

the company if the launch fails to:- Communicate the products promise

- Convert buzz into revenue

y A product launch is therefore the most

sensitive step in achieving growth through

innovation and NPD.


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The risks of new product launchThe risks of new product launch

y On average 40 to 70 % of all new products

failed.

y 47 % of the companies that pioneer new

product categories later pull out of thosebusinesses.

y Customers are averse to change.

y Companies go to the market before they are

ready with the stocks.


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What do smart companies do?What do smart companies do?

y Replicate a precisely executed launch

each time they introduce a new product.

y Follow a specific process for positioning

products, training the sales force, working

with channel partners, and communicating

with customers.

y Prepare themselves for slow adoption.


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Three phases of new productThree phases of new product

launchlaunch

Launchplanning

Determination of appropriate product positioning , volumeforecasting, distribution channels and budget allocation.

Launchexecution

Introduction of products to market with awareness anddemand generating campaigns , sales force and channelpartner training.

Launchmonitoring

Evaluation of product, sales representatives and channelpartner performance; product feedback collection fromcustomers and sales teams.


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Product placement worksheetProduct placement worksheet

Target customer Customer behavior

-Demographics-Life stage and income

-Psychographics

-How will products functionalityappeal to customers or entice them to

buy?

-How might product engage customers

from an emotional perspective?

Context within brand Products role in portfolio

-How does product support our core

brand values?

-How do our core brand values

support product?

-What does product offer that is

currently missing from our present

product portfolio?

- How does product support our long

term brand strategy?

Pricing Competitor outlook -What is the clients willingness to pay?

-What are the highest and lowest price

points we should consider?

-What do we want to achieve in

volume and profitability?

-Who will be the primary competitors

with the product?

-Which of our competitors products

will directly compete with product?

How should we address our go-to-

market strategy?


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Sales support readiness checklist


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Sales and Marketing Performance Dashboard


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Latest tool: Supporting Product launch through unconventional channels

and use of multimedia

Adding multimedia to product release increases engagement by 55 %.


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THANK YOU

Documents

Product Management_Presentation