Views from the Hills by R. E. Stevens, GENESIS II (The Second Beginning) E-Mail views@aol.com

Should it be a Difference or Preference Based Decision?

During the past two months on three separate occasions, discussions around cost savings projects have come up. The questions ranged from test design to the benchmark to be used in the assessment of market viability. But the most intriguing was related to the interpretation of the preference voting.

One discussion centered around the proper use of the No Preference votes. Should we only use the votes of those who gave a preference or should the no preference votes be utilized? If the no preference votes are used, how should they be split (equally or proportionally to the preference votes)?

A second discussion centered around the actual distribution of the votes and how they should be used. Basically, to insure that there is not a gradual reduction in the quality of the brand should the cost savings product be required to receive 50% or better relative to the current product to be acceptable for the market introduction? From my point of view, the response was an emphatic "No." I believe the whole issue revolves around the Risk/Reward equation. For example, given a 51/49% loser that would result in a potential 5% sales loss but a doubling of profits (assuming the profits were at an acceptable level to start with), there is no doubt which way I'd go. I'll go for the double profits and work to regain the 5%.

To me it was interesting that in all three cases the three companies were using paired comparison preference blind tests to assess the merits of the cost savings project. In all three cases the objective was to deliver to the consumer a product of equal acceptability. The intent was that the consumer would not see a change in the brand resulting from the cost savings initiative. More clearly, they did not expect to cut cost and gain in acceptability. I don't ever recall seeing a cost cutting initiative that was expected to deliver a preference gain. Based on this thinking, a preference just might be an inappropriate measure of objective.

If our objective is to reduce cost while maintaining parity, instead of looking at a preference, should we not look instead at the ability of the consumer to see a difference in the products? If our objective is to create a product that the consumer cannot distinguish from the original, rather than taking an indirect approach through a preference test, why not go directly to the heart of the matter? That is, can the consumer distinguish one product from the other? Basically give the two products to the consumer to use, determine if they can see a difference. If so, how are they different? And if they are seen as different, which do they prefer?

I still propose that any action be based on the Risk/Reward rather than on some set standard of difference/preference. Each case judged on its own merits.


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