Making Sure the Next Big Idea is the Right Idea

When launching new products and services, marketers need accurate, detailed assessments of their likely performance. Ipsos Vantis Senior Vice President and General Manager Stephen Bohnet explains the merits of concept screening based on marketplace potential.

A quick scan of the best-run businesses in the world today would reveal a common asset, regardless of industry: strong brands. Smart companies have capable teams devoted to keeping existing brands healthy, whether through creating operational efficiencies, enhancing or refreshing brands' image, or improving marketing ROI. But they also have something else: a commitment to innovation. Current products and services can only take a business so far. To maintain strong brands and a competitive position, companies must develop new ideas.

From Concept to Reality

The next big idea is tantalizing; before it is born, it is perfect; there is nothing in its way. We spend enormous amounts of time and money hunting it down. We urge out nascent ideas in lonely cubicles or together in conference rooms. We sit with people in their homes, red-eyed from watching them use our products and searching for evidence of a new consumer need. We hire specialists, hoping they will come up with better ideas than our own. If ever there was a testament to the hunger for the next big idea, it is that there are trained experts for just about any task you can think of to evaluate new products: pushing very little telephone buttons, getting hit on the head, counting skin wrinkles, watching people shower, and even sniffing cat litter boxes.

Despite all this hard work, not all "next big ideas" are really that big, at least at the beginning. They need scrutiny. After that, they need different things: some need nothing (they're big!), some need coaxing (they're troubled but worthy of more work), and some need to go away (sad but true).

Once an opportunity has been identified and a few concepts dreamt up to satisfy it, it's time to put each concept to the test: does it have potential as a real product or service in the marketplace?

Most marketers know that at this stage they need consumer feedback to prioritize their new concepts. Usually, they'll go the route of a quantitative concept test, where they must avoid two pitfalls - the notorious Type I and Type II errors (from stats 101):

• Type I: A false positive. In concept testing, this means you think the idea is good, and you advance it. Later it falls short of expectations.
• Type II: A false negative. Translated to concept testing, you kill a good idea.

Challenge Your Decision Making Skills

Concept testing yields a set of survey scores, which should provide you with the basis for making good decisions about which concepts to advance for further development. Take a minute to study the following set of scores for a new product or service in your category. What would you do if you tested five new concepts and got the following results?

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• Would you advance A and B, the concepts with the strongest purchase interest?
• Would you consider advancing E, the third strongest?
• How would the value ratings affect your decision, since the prices for these products are considerably different?
• Would you be certain that your decision to advance one or more of these products would be the right decision for your business?

Potential Limitations of Traditional Concept Testing

There are two common approaches to evaluating new concepts. The first is to test many concepts in a single study and advance the winners. Most of the time this approach will identify the best concepts, but it will not necessarily identify good concepts. In other words, the best is relative ... and it is not always good enough. Concepts can appear very strong if they're tested amongst a relatively weak set. Advancing a relatively strong concept (compared to a weak set of concepts) can result in months worth of work and thousands of dollars (or millions if the concept is launched), only to learn later that the idea was not that good (i.e., Type I: a false positive).

The other common approach is to compare new concept scores to a known benchmark - either a past concept that performed well in-market or a competitor. For many businesses, the challenge with this method is to find the right product benchmark for performance and the right set of measures on which to compare. Survey norms differ by price range, by category, and may even evolve over time for new categories as they become more established. For some new products, there is simply nothing in the marketplace to compare against.

Testing for Marketplace Potential

When evaluating new concepts, what are your company's basic criteria for success? Chances are, your company is developing new market offerings to contribute to its overall financial health. The given product or service must make an impact in the marketplace for this to happen; consumers must need or want it and choose it over alternatives.

Accordingly, at Ipsos we've based our concept prioritization approach on marketplace potential. Even in the early stages of concept prioritization, decisions should be based on a concept's real chances of succeeding in the marketplace. Our approach to concept testing minimizes the risk of advancing the wrong ideas.

To assess the market potential of new concepts, Ipsos compares each concept against The Vantis Database. This database holds the largest concentration of services and durables concepts in the world. It covers such a wide range of geographies, categories, and price ranges that there is a wealth of relevant concepts against which to compare any new durable or services offer. Even new-to-the-world products in non-existing categories can be compared against the normative database, which holds over 2,000 new-to-the-world concepts.

The Vantis Database: Over 8,000 Concepts

The Vantis Database is stocked with concepts that have been launched and tracked in-market. A very high correlation exists between concept performance in the database and market success. Concepts that perform well in The Vantis Database consistently succeed in-market, whereas weak and average concepts relative to the database tend to struggle unless reworked before launch or blessed by exceptional marketing spend.

Comparing concepts against the database also improves the quality of analysis. Instead of simply identifying which concepts are better, we can pinpoint which concepts have a high chance of success. Instead of focusing one survey measure, or several key measures that can give conflicting stories, six key measures are analyzed in a comprehensive analysis that tells a story as to why the concept will succeed or not. This approach gives marketers a lot more to work with than traditional approaches do.

Let's go back to the earlier concept scores. How confident were you that you would make the right decisions on which concepts to advance? Consider how your level of confidence might change with a comparison to The Vantis Database. Each of these concepts fits a common database archetype:

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There are a couple of obvious conclusions that any methodology would pick up: Concept A you would advance; Concept C, you should not. But how did you do on the other ones?

• Concept A - Winner: A top priority for advancement. Purchase intent scores are in the top 20% of The Vantis Database. Consumers want and need this concept. Value perceptions are average, indicating the product is priced about right.
• Concept B - Under-priced: Purchase intent and liking scores are strong. Value perceptions are extremely strong, perhaps too strong. Unless this product is intended to undercut competitive prices for a value play, consider boosting the price rather than leaving money on the table.
• Concept C - Dog: Let's call a dog a dog. Scores across the board are low. This concept should not be advanced without major reworking.
• Concept D - Breakthrough: It is very well liked and very new and different from other products in the marketplace. Purchase interest at the launch price is limited, due to its high price. Consider a targeted rollout in Year 1, then broaden as the price of the product comes down in Year 2.
• Concept E - Average: Concept E is a ho-hum, middle-of-the-road idea. Nothing is jumping out at the consumer, although consumers don't seem to reject it completely either. This concept needs significant reworking to be considered for launch. Further analysis (attributes, open-ends, etc.) can help complete the story of Concept E, but average concepts can be tricky to interpret; it often remains unclear whether reworking will make a difference.

Concept Testing for Results

Enormous amounts of time and money are spent trying to find the next big idea. However, in this era of online interviewing and broadly defined panels, marketers wanting to test and prioritize their ideas can almost always find both fast and cost-effective approaches; the usual trade-off between the benefits of cost vs. timing isn't an issue. Unfortunately, deciding which concept testing methodology to use is often reduced to these two criteria.

Speed and affordability aren't enough to ask for from concept screening. You should expect a real indication of how the concept will perform in the marketplace. Making the right decisions is in fact the best way to save time and money - and have a successful product or service to show for it. Therefore, a third dimension should be added to the decision matrix for a concept screening methodology: its accuracy at predicting market success.

If your company needs to identify concepts with strong market potential, consider a concept screening methodology with a track record of predicting real winners ... where indications of potential are validated against in-market success. Market research should help companies make the right decisions - not just the most expedient ones.