Ten-Step Program

My last "Views" memo (November 6, 1994) stimulated a call from a friend. He wanted to know why I would utilize a 10-step consumer research program for the development of a new product idea. His approach to new product development is to take the idea through some focus groups to define the idea and then place the product in a blind test. If the product passed the blind test hurdle (he uses the paired comparison method), he would go straight to a test market.

My concern with his approach was two-fold. First, I believe that good ideas are few and far between and therefore, I want to maximize the potential for success by enhancing all the elements of the product. This means studying the alternatives not only for the composition of the product, but also the aesthetics, packaging, price, and above all the positioning/promise (concept). My second area of concern involves the cost of test marketing products that have not been enhanced to give the brand its best chance to succeed.

Our conversation brought to mind an experience I had where I was asked to look into the reason why a seemingly promising upgrade of a brand failed in the marketplace. The company had two versions of an upgrade. They tested both in a paired comparison, blind test. One version, call it A, significantly beat the other version (call it B). When A was introduced into the market, it failed.

After reviewing the data, I conducted one study. The study involved a 3 by 2 design, three products with 2 panels each. One panel was a parallel, single product design and the other was an identified concept and use design. The products were: Product A, Product B, and the current market version.

The overall results were as follows:

Panel:		Average Scale Difference (Test minus current version)
	A	B
Blind Test Panel	4.2	1.6
Identified Concept & Use Panel	(2.2)	3.5

Version A did well when the brand name and positioning were not known but not when it took on the identity of the brand it was to replace. It did not have the same acceptance level. Version A just did not fit the image, positioning and heritage of the brand. Version B on the other hand, was well accepted in the blind test and its acceptance was enhanced by the brand name and positioning. Version B when introduced into the market, went on to enhance the brand's number one position in the category. While the technology of Version A may have been a good candidate for a second brand, it was not used as such. The technology of Version A was utilized in a new brand in a different, but related product category that has become the number one brand in its category.

The above points out the need to research new ideas in the blind context, as most companies do, but also in identified/concept & use context. Unlike my friend, I believe there are 10 clearly definable steps in the development of a good idea prior to market introduction.

Note: Elrick & Lavidge, Inc. will be covering the distribution cost of these memos.