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Concept Testing: Basics For New Product Development

By Shana Latham, Senior Data Manager, Polaris Marketing Research

Concept testing is the qualitative and/or quantitative process in which researchers evaluate consumers� thoughts, reactions, attitudes, and sometimes ideas about certain products or services before introducing them into the market. Concept testing often helps management decide whether the product or service is a �go� or �no go.� More selectively, concept testing can help identify appropriate strategies for branding, advertising (messaging), pricing, distribution, sale processes, etc.

In general, concept testing methods are either qualitative or quantitative.

Qualitative methods include in-depth interviews and focus groups. Traditional quantitative methods include phone interviews and mail or online surveys. Survey questions include evaluations of the concepts on a rating scale (presented visually or verbally), perceptions of the position of the concepts or products, and evaluation of the concepts versus the competitor. (See other issues of MR Perspectives for more detail on qualitative and quantitative methods: Polaris Marketing Research Company - MR Perspectives Newsletter)

The aforementioned methods have been successfully used and are still commonly used in exploratory research to guide the bulk of concept testing. However, these traditional methods do have drawbacks. In using these traditional methods, researchers cannot identify the relative importance of each of the factors responsible for the customers� reactions. Because there is no systematic quantitative method in traditional techniques, generalizations are likely to occur. The traditional methods also do not evaluate the relationship between the consumers� reactions of new products and that of their current purchase habits.

Two modern techniques help overcome the limitations...

of traditional methods: conjoint analysis and choice modeling. The goals of these two analytical techniques are to test the attractiveness of the various concepts in relation to each other, as well as to evaluate the role of each feature or attribute. Both of these techniques provide the respondent with a choice of concept A versus concept B (or a number of concepts) described as specific levels of different attributes (i.e. price, quality, brand, warranty, etc.). Because of the systematic design achieved in the modeling of the survey questions, this enables researchers to explore the relative importance of each of the features of the concepts.

Example of choice-based conjoint question:

If you were in the market to buy a PC today and the below were your only two options, which would you choose to buy?

PC OPTION  1
PC OPTION  2
Brand A Brand B
Dual-Core 2.6 GHz processor Dual-Core 1.5 GHz processor
8GB RAM 4GB RAM
1TB 500GB
$650 $400
__ Select Option 1
__ Select Option 2

Concept testing has several purposes, such as directing the market in which the product or service should be introduced, selecting which concept is best, and forecasting the demand for the product or service. Concept testing can also introduce new ideas to and set a foundation for further research in the future. With online surveys, the more sophisticated techniques become much more palatable to respondents and affordable and timely for researchers. Concept testing is an invaluable part of ensuring new product success.

Shana Latham is the manager of the analytics department of Polaris Marketing Research Inc., where she is responsible for the all the data analysts handling data manipulation tasks involved in survey research. She has a bachelor's degree in business from Georgia State University and a Masters in Statistics from Kennesaw State University.

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