Concept Testing

Concept testing is the process of testing new or hypothetical products or services before they are launched. The testing is intended to screen a number of concepts to identify the strongest ones for progression, to improve/refine the base product or service proposition, and/or to forecast their likely success.

Purpose of the study

Concept testing is mainly used for go/no-go decision for a new product. This decision itself may have several aspects. Below are some examples of situations in which this study finds its usage:

• Reaching out to a new market segment
• Ranking and selecting the best potential product concepts, brand name, packaging, logo, etc
• Determining the optimal pricing point for new products
• Testing customers’ trial experiences to see if product or communications adjustments should be made.
• Benchmarking
• Forecasting demand

Concept Testing Process

The process of concept testing involves stages such as defining the goal of the study, choosing the sample population, deciding upon a survey format, communicating the concept, measuring consumer response and interpreting the results. Hence the steps are synonymous of most marketing research methods that we had seen in the previous modules.

The expected outcome of the study is to capture the consumer purchase intent. Broadly the questionnaire designed for the survey has 3 main sections though they can vary depending on the product and the research company.

1. Qualification

   Screener questions are asked to ensure that only valid responses are processed. Let us consider that a company wants to launch a new battery operated scooter/electric bike for college going students (new market).

An important question in the demographics section should be:

• How far do you live from campus?

If the student stays within 5 miles of the campus, he might not need the scooter at all. Similarly, if he stays too far away, a scooter might not be the optimum mode for commuting. So again, the student must be eliminating while consolidating the results.

2. Product Description

   Also known as communicating the concept, the new product idea is described to the respondents using several techniques such as:

   • Verbal description
   • Photo
   • Video
   • Multimedia
   • 3-D model
   • Working prototype
   • Storyboard
   • Simulation
3. Purchase Intent

   After describing the product by using one of the applicable methods mentioned above, the purchase intention of a potential consumer can be checked by using a simple likert scale:

• If the scooter is priced as per expectations, how likely are you to purchase it in the next one year?

❏ Definitely won’t purchase

❏ Probably won’t purchase

❏ Not sure

❏ Probably would purchase

❏ Definitely would purchase

Sources of Error in tested results

Though concept testing predicts the acceptability of a new product fairly accurately, the results may be skewed either positively or negatively in the following situations:

• Word of Mouth impact
• Pricing Mismatch
• Level of Promotion
• Competition

Conclusion

In a nutshell, the goal of concept testing is to develop, refine and nurture new product and service initiatives around solid consumer insights with a view to reducing the probability of failure and increasing the probability of a successful launch and in-market performance.

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