Josephine EL-ZOGHBI
11417831
New Product Marketing
Final Exam Notes
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1. Analytical Attribute Approaches & Concept Testing
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Product attributes are of three types:
o Features – What the product consists of.
o Functions – What the products does, how it works.
o Benefits – How the product provides satisfaction to the user.
Analytical attribute approaches use different attributes;
o Dimensional analysis uses features
o Checklists use all attributes
o Trade-off analysis also uses determinant attributes
Analytical attribute techniques allow us to create new product concepts
by changing one or more of its current attributes, or by adding
attributes, and to assess the desirability of these concepts if they were
to be developed into products.
Perceptual Gap Analysis
• Maps of the market;
o Products are positioned on the market map
o Clusters of items
o Gap is identified as open space between them
• Gap Map;
o Determinant Gap Map – Based on managerial expertise and
judgment.
o AR Perceptual Map – Based on customer attribute ratings.
o OS Perceptual Map – Based on customers’ perception of overall
similarities.
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Determinant Gap Map
• Manager (or researcher) identifies two dimensions that become the
attributes used in axes.
• These attributes should be differentiating and important.
• A two-dimensional map is created.
• Managers then score each brand on each of two dimensions/factors/
attributes.
• Advantages; Speedy and cost efficient.
• Disadvantages; Based only on manager’s judgment.
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Attributes Rating (AR) Perceptual Gap Map
• Ask customers to tell what attributes they believe products have.
• Perceptual map is based on market perceptions even though they may be
incorrect (e.g. lollypop has high nutrition.)
• Perceptual map is based on customer rating on a set of attributes
• Usually rated on a likert scale (strongly disagree ! strongly agree) OR a
semantic differential scale (nutritious ! non nutritious).
Josephine EL-ZOGHBI
11417831
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Factor analysis is typically used to reduce the large number of attributes
to a small number of underlying dimensions (factors). Scree test &
eigenvalue rule.
These factors are used for the axes of the map.
Cluster analysis can be used to group individual respondents based on
their preferences.
Advantages of AR map;
o Receive consumer insight
o Can see gaps in the market
Disadvantages of AR map;
o Complicated factor analysis
o May not be accurate consumer perceptions
o Attributes to be rated must be identified by manager and
researcher.
o Measurement errors
Overall Similarities (OS) Perceptual Gap Map
• Customers rate their perceptions of overall similarities between pairs of
brands.
• Choice is also based on ‘latent’ or ‘phantom’ attributes (can’t be
fathomed).
• Multi Dimensional Scaling (MDS) attempts to plot brands based on
similarities.
• Challenges of MDS;
o Manager’s knowledge regarding the market is used to determine
axes and their name.
o Any rotation of map preserves the distance or similarities between
brands.
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Comparisons
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Considerati Determinant Map
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Input
Required
Manager’s
judgment
Usage
OS Perceptual
Map
Ratings on specific
attributes
Overall similarity
ratings
Factor Analysis
Multi-dimensional
scaling (MDS)
2-dimensional
map based on
axes determined
by manager
Multi-dimensional
map positioning
brands on underlying
factors.
Multi-dimensional
map positioning
brands based on
relative distance.
Quick & Cost
efficient
Attributes easily
articulated.
Difficult
articulating
attributes
Analytic
None
Procedures
Graphical
Output
AR Perceptual Map
Josephine EL-ZOGHBI
11417831
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Concept Testing
• Early screening questions take place;
o Market Worth – What is the attractiveness of the new product to the
targeted customer population?
o Firm Worth – Is the new product viewed positively by management?
Does it enhance the firm’s competencies?
o Competitive Insulation – Can the product’s advantage be maintained
against competitive retaliation?
• Many ideas are eliminated before concept testing
• PIC eliminates most new product ideas
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Process
• Prescreen the early concept based on various criteria including
consumers’ responses;
o Identify very poor concepts for elimination
o Estimate the sales or market share
• Concept development to reinforce the idea of helping the item, not just
killing it off
• Market research directed as a manager of screen
• Some firms do not use do not use formal concept testing
• Concept testing can sometimes be hard to apply if;
o The prime benefit is a personal sense
o New art and entertainment
o Some new technology that users cannot visualize
o When consumers do not know what problems they have
• Product Concept Statement – A statement about anticipated product
features that will yield selected benefits relative to other products or
problem solutions already available.
• Purchase intentions can be researched through surveys e.g. how likely
would you buy this product?
• This can be done by;
o Mail concept tests – verbal description
o Mail concept tests – sketch
o Online concept tests – visual
o Qualitative concept tests – focus groups, in-depth interviews or
observation with prototype.
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Trade-Off & Conjoint Analysis
• Trade-off analysis is the process where consumers compare and evaluate
brands based on their attributes or features.
• Conjoint Analysis is an analytical tool used to assess tradeoffs.
• Using conjoint analysis assumes you can represent a product as a set/
bundle of attributes.
• Conjoint analysis puts all the attributes together in new sets and
identifies which sets of attributes would be preferred by customers.
• AR gap analysis can be used to select the attributes used in the conjoint
analysis.