Product development (NPD Stage 4)
Category: Marketing
This is the phase in which the organisation finds out if it is technically feasible to produce the product and if it can be produced at costs low enough to make the final price acceptable. In addition, the overall acceptability of the product concept (core product) and the physical product and service offerings (actual and augmented product) to consumers is assessed. To assist in this initial evaluation by consumers ideas or concepts can be converted into prototypes or working models.
Concept Testing
One of the main worries about new products is the likely level and type of consumer response. Advocates of consumer orientation rightly argue that some evaluation of this should be incorporated at all stages of development. Concept testing is designed to gauge something of consumer reaction at an early stage.
Group discussions are a widely used means of concept testing. Groups of about eight consumers are convened to discuss the product or the concept. Sometimes a set of written statements forms the stimulus for such discussions. Confusion and lack of comprehension of the product idea is very possible with this kind of stimulus alone, and so for convenience goods, resort may be made to dummy packages and mock up advertisements to convey a more meaningful impression of the product. The product itself would not be available for testing because concept testing comes before a decision even to develop a prototype.
Research conducted in such a fashion is bound to be speculative. None the less, it can have some limited value. The discipline of having to explain the product idea to a group of consumers is always helpful, and the associations that the concept has for these people may be instructive. Advance warning may be derived that the concept would meet resistance because it was linked in unforeseen ways with other concepts that consumers held. They may label it as not really being very new since they expected its performance to be similar to another existing product and this despite important innovations in product design. They may totally discount what the company conceived as being the major feature and, instead focus on a minor element. For example the manufacturer may see a new foodstuff as having the important advantage of reduced preparation time. Consumers in discussion groups may centre on its novel storage requirements. That introduces another problem: what is most talked about in a discussion group may not be what is most valued by the eventual consumers. Clearly, nothing is going to be proved in such exercises, although they could provide a host of hypotheses.
Problematical as it is, concept testing represents the product s first encounter with the market. Apart from gaining broad impressions of the idea’s acceptability, more detailed benefits may be apparent. Participants in the discussions may spark off a hitherto neglected aspect a new use not previously considered, a competitive position not recognised, a minor attribute that with development may be important, or a design change that could make it more flexible or open up joint consumption possibilities with other products. Concept testing can also be instructive in the initial development of communication strategies. It can establish some of the difficulties in describing the product to consumers such as whether or not product attributes should feature in the communication whether better understanding would follow from using reference groups, or stressing consumption situations or whether the concept would be better assimilated if it was associated with other firmly established concepts or products.
Tauber warns against trying to place reliance upon «purchase intention» feedback from concept testing groups.
The product concept may have been developed sufficiently to specify the product attributes in some detail. The problem then becomes one of determining which combination of attributes the consumer prefers. A quantitative approach to this problem could employ trade off analysis. The basis of this approach is consumer rankings of various combinations of attributes. For example with hand trowels used in gardening the two attributes might be length of handle and breadth of blade and the rank order of combinations given by consumers is shown in the table below. Ranking of hand trowels
| Short handle | Medium handle | Long handle | |
| Narrow blade | 8 | 5 | 9 |
| Medium | 2 | 1 | 4 |
| Broad blade | 7 | 3 | 6 |
1 = highest rank
The medium blade gets the top ranking, except when it has a long handle, and in that case a broad blade is preferred with a medium handle. The aim of the exercise is to determine how much of one attribute will be sacrificed to obtain a given level on another. Advanced statistical techniques can derive ‘utility values’ from such rankings, and Lunn and Morgan illustrate this in a study of calculators.