Understanding the management approaches that result in competitive advantage has been a permanent objective of Booz.Allen & Hamilton for over 25 years. This paper reports the results of our most recent research on the subject to date and highlights the latest information on companies' "best practices" in new product management for both consumer goods and industrial products.
In its major food and drink forecasting study across West Europe (NUTRITION 1990), GIRA predicted the volume decline in food and drink markets, but compensated by an increase in value in food markets. The explanation of this paradox is that the perceived quality of products will improve by an increasing penetration of improved or modified products into standard mass markets : GIRA has coined the term MICRO-MARKETS to describe these very specifically targeted products. GIRA has found since the middle of the 1970's an increasing number of concrete cases where consumers are prepared to pay a higher price for "better" food products.
We have attempted to address in an approach to measurement we have called 'Brand Diagnosis'. Our objectives in doing so were to combine the 'divergence' of a qualitative research methodology with a method of analysis which would simulate the 'convergence' of normal quantitative methods. Our aim was therefore to find an approach to brand image measurement which would preserve the capability of providing insight - typical of qualitative research - and at the same time provide the sort of structured findings that the decision-orientated environment of a marketing company usually requires.
This paper starts from the premise that the Simulated Test Markets (STMs) now being used in Europe have an impressive track record in terms of the validity of the predictions they make regarding the future success of new products. The techniques that they use actually succeed in indicating how the consumer will behave in the real-life marketplace.
In this paper, I shall discuss an alternative approach which, although developed in the early fifties, has only recently been applied for the development of consumer goods and which is based on Response Surface Methodology (RSM) and the use of Magnitude Estimation Scales (MES).
The paper argues the case for extending the value of much market research data concerned with concept testing, concept/product use testing and usage and attitude tracking studies by employing modelling systems to predict sales volume or market shares. The points are made that: - such an approach can do much to improve the success rate of new product launches - the present state of the art of available systems is such that their forecasting abilities and versatility in dealing with different product and market scenarios is considerable. - since much of the data is available anyway, only relatively small amounts of time, effort and money are necessary to extend the value of market research to a substantial degree.
Productivity and success in the new product area could be vastly improved through increased concentration and thinking in the early stage planning phase; particularly, in terms of defining the strategic role of the new product, identifying and understanding the primary prospects, and setting specific goals in a clear development plan.
This paper introduces - necessarily briefly - OPAS, a system to optimise products and assortments. Basically, two parts can be distinguished. The first part consists of all models related to data collection and conjoint measurement, resulting in an array of values (called utilities) for each attribute level. Starting with traditional conjoint measurement, problems for applications are summarised. For a significant part of these, solutions have been formulated and the implications for the models are shortly indicated. Thus, it is possible to include a large number of attributes and to apply this system to taste-testing. The second part contains models for prediction (including a set of probabilistic choice models) and the routines for optimisation. Since the latter can include constraints (e.g. costs, number of products) a large amount of practically relevant questions can be answered. This is illustrated by a sample of the situations where OPAS has been successfully applied, which is followed by a concluding section on limitations and future extensions.
This paper will describe a model and market measurement system which predicts new product potential at the concept/product stage of development and explicitly links the prediction to perceptions before and after use. The discussion includes model development, measurements, and analysis findings. A case study is presented which demonstrates an actual application of the model. Finally, validation results are shown for recent studies performed in Europe and Japan.
The paper considers current and developing creative research methods used in generating ideas from consumers in the area of new product development. The role of consumers as idea-generators is discussed within an overall model commencing from a problem-orientation standpoint. The paper focuses specifically on various aspects of methodology including recruitment of respondents and practical aspects of creative workshops and creative panels.
Market research has developed several tools for selecting the optimal combination of product features. One of the methods which has become fairly popular within the last years is the "Trade-Off Model". With this method, utility indices are computed based on the evaluation of different product features through a sample of consumers. In our paper we are criticising the "Trade-Off Model" for not adequately describing consumer behaviour. We suggest using another product test approach, the "Experimental Pair Comparison Test", which permits an unbiased prediction of consumer behaviour. Empirical findings are presented to demonstrate the usefulness of the "Experimental Pair Comparison Test".
This paper reviews some methods for assessing foreign product opportunities and presents a sample case (introducing a North American beer in Europe) of international market choice. The paper shows that by following a methodological approach the firm would select different markets (in this case, Belgium, Austria, Germany and the U.K.) than if an experiential decision had been made.