jonathan honiball ● senior director, customer research new market research techniques to improve...
TRANSCRIPT
Jonathan Honiball ● Senior Director, Customer Research
New Market Research Techniques to Improve Product Acceptance
February 20, 2014
February 2015 2
Speaker Introduction
Agenda– Don’t Do Market Research?!?– Learning from Outside the Industry– Learning from Within the Industry– New Market Research Techniques– Case Story– Why Invest Early in Research?
Introduction
February 2015 3
“If I had asked people what they wanted, they would have said faster horses.”
–Henry Ford
Don’t Do Market Research?!?
February 2015 4
Launch and refine is risky for medical devices given FDA approval requirements and product reputation
“Speed to Market Strategies” are Risky
Get prototype product in front of customers as fast as possible, solicit feedback, and incorporate feedback in next prototype for customer evaluation
Lean Process
Pilot Testing
Introduce new product to a sample set of all customers (e.g., of the company’s customers in a region) and evaluate customer response
February 2015 5
Learning from Outside the Industry
In January of 2012, CEO Ron Johnson (ex- Sr VP, Apple) launched a new retailing strategy
JC Penney shoppers rejected the new model
JCP stock fell from $42.44 to $14.62 in 2012/13 and the CEO was fired (Δ Mkt Cap > -$ 5 B)
February 2015 6
Over the past two years, we have interviewed investors involved in funding medical devices
While we did hear about many successes, most of what we heard were horror stories
Many products fail because of technical issues – however, even if the product is exactly as intended, it can still be a commercial failure.
Learning from Within the Medical Device Industry
February 2015 7
Charging the wrong price Targeting the wrong specialty Not understanding laggard behavior
– A better product is not enough to cause a switch
Engineers, Sales and Marketers not being on the same page
Typical Reasons for Commercial Failure
February 2015 8
Many companies lack sufficient information early enough to properly define “successful” new products/services where…
“successful” =
– correct mix of product and service features, benefits, price points and distribution channels
– which provides a “total solution” to meet/exceed customer expectations
– to meet/exceed company’s product financial targets
The Problem
February 2015 9
Research Questions For Your New Products
Product Acceptance
How big is the market?
What features and
functionality to offer?
What price to charge?
How to position vs.
competition?
How to promote?
February 2015 10
“Sell” the product before you build it.
Gain customer feedback to understand their actual needs rather than focusing on pushing out a product– How to use market research to get this customer
feedback
A Solution: Sell - Build
February 2015 11
February 2015 12
…But Market Research has Changed
Cheaper, Faster, AND Better Information
February 2015 13
Ethnography
Mobile Ethnography
• Invited customers perform tasks, recording and detailing as directed by a researcher leveraging mobile technology
February 2015 14
Focus Groups
Discussion Boards
• Invited customers respond to topics and questions presented by a moderator in an asynchronous online discussion boards
February 2015 15
Customer Satisfaction (VOC)
CRM Integration
• Design a feedback loop within each customer interaction. Continuously field surveys and analyze data.
February 2015 16
1. Determine the product-brand-price mix that will appeal to the greatest proportion of the target market
2. Understand product expectations and purchase drivers across customer segments
3. Reduce the risk of over or under investing due to mismatch between product and customers’ needs
4. Limited number of questions create a forecast of future behavior
Consumer Choice Model
Consumer Choice Model (CCM)
CCM techniques to determine the most successful mix
February 2015 17
Consumer Choice Modeling Has Changed
Due to historically high costs, use was limited
With technology, the costs are 10% of what they were
Timelines are now weeks instead of months
1960s 1970s 1990s 2000s
1970s
Done using manual methods, regression analysis, mainframe computers
2000s
More powerful, lower cost computers, more complex simulations using advanced analytical techniques
1990s
More powerful computers, more sophisticated analytical techniques(e.g., advanced statistical methods)
1980s
February 2015 18
Product Acceptance
What Attributes Define Product Acceptance?
ProductFeatures
Aesthetics
Performance
Brand
PriceFinancing
Comparative
Residual Value
Switching cost
ExperienceExpectations
Function
Emotion
Social proof
AccessChannels
Regulation
Location
Timeliness
ServiceAccess to service
Customer care
Warranty
Purchase
February 2015 19
This matrix represents 21,600 possible combinations
CCM: Example Attribute Table
Level 1 Level 2 Level 3 Level 4 Level 5 Level 6Brand Company 1 Company 2 Company 3 Company 4Effectiveness 99% 97% 95% 90% 85% 80%Market Usage Used by 50% Used by 35% Used by 25% Used by 10% New to marketSize 2 cubic feet 4 cubic feet 8 cubic feet 12 cubic feet 20 cubic feetRun Time 30 minutes 25 minutes 20 minutes 15 minutes 10 minutes 5 minutesPrice $200 $300 $400 $500 $600 $700
February 2015 20
Divides a product into key attributes/product features and then combines these attributes/product features into a selection of “hypothetical products”
Testing the boundaries and not just focusing on current features
CCM: Question Example
Company 1 Company 2 Company 3
90% effective 95% effective 80% effective
Product is new to market
Product is used by 10% of consumers
Product is used by 35% of consumers
4 cubic feet 2 cubic feet 8 cubic feet
10 minutes 15 minutes 20 minutes
$500 $600 $200
m m m
Which of the following medical devices would you be most likely to purchase?
February 2015 21
Market Simulator Sample
Market Configuration
Preference Share
65%
35%
Simulations• Add products to the
marketplace• Change product
attributes• “What if” scenarios
for any possible market changes
• External metrics can be calculated
Company 1 Company 2
90% effective 95% effective
Product is used by 10% of consumers
Product is new to market
2 cubic feet 4 cubic feet
10 minutes 15 minutes
$600 $600
February 2015 22
Market Simulator Sample
Market Configuration
Preference Share
45%
55%
Simulations• Add products to the
marketplace• Change product
attributes• “What if” scenarios
for any possible market changes
• External metrics can be calculated
Company 1 Company 2
90% effective 95% effective
Product is used by 10% of consumers
Product is new to market
2 cubic feet 4 cubic feet
10 minutes 15 minutes
$300 $600
February 2015 23
Simulator Demo
February 2015 24
Simulator Snapshot
February 2015 25
Can Be Analyzed for Any Sub-Segment
February 2015 26
Running a Simulation
February 2015 27
Running a Simulation – Selecting Options
February 2015 28
Running a Simulation – The Output
Increase from 35%
February 2015 29
Running a Simulation – A Better Solution
Increase from 35%
February 2015 30
Helps avoid costly, distracting and time-consuming missteps
Aligns and engages customers early
Makes sure that attributes are those that matter to buyers and influencers
Better aligns your engineering and sales teams
Why Invest Early in Research?
February 2015 31
For more information or a demonstration, please contact:
Jonathan HoniballSenior Director, Customer Research
[email protected]: 650-223-8228 | Office: 650-327-8108 | Mobile: 267-992-6730
Pacific Consulting Group | 200 S. California Avenue, Suite 200 | Palo Alto, CA 94306www.pcgfirm.com
February 2015 32
Challenge:
A life science company launched its brand in the US two years earlier as the first and only product indicated for two different conditions.
Competitor launched in select overseas with plans for a US rollout.
Research objectives:
Determine the sales impact on existing markets from competitive launch, as well as the likely impact in yet undeveloped markets.
Case Story: Competitive positioning and timing
February 2015 33
Methodology:
Choice Modeling was used to evaluate current and future competitive situations
Market Simulator calculated a "preference share” enabling comparison of current and future market share.
Results:
Simulator gave the client dozens of scenarios to plan investment. Client accelerated R&D efforts in order to launch 1st in other markets.
Actual market share in all markets measured are in line with model predicted preference shares.
Case Story: Competitive positioning and timing