Are you tired of investing time, money, and resources to develop products that don’t resonate with your target audience? Have you ever launched a product that received little to no interest from the market? If so, you’re not alone. 

Launching a successful product in today’s highly competitive market can be daunting. However, concept testing can help you validate your product ideas, refine your concepts, and increase the likelihood of success.

Concept testing evaluates customer responses to a product idea before launching it in the market. It involves gathering feedback from potential customers to understand their preferences, pain points, and expectations. By conducting concept testing at different stages of product development, you can identify potential issues and improve your product before it’s too late.

In this article, we will explore the importance of concept testing in product development and provide an overview of the different stages involved in the process. From idea generation to launch testing, we will discuss how concept testing can help you maximize your product’s potential and increase your chances of success in the market. 

What is concept testing? 

Concept testing, also known as idea testing, is a crucial step in the product development process. It involves testing a product idea with potential customers to gauge their level of interest and gather feedback to refine and improve the idea.

Concept testing aims to validate a product idea before investing significant resources in developing it. It allows product teams to gather valuable insights from potential customers and make data-driven decisions based on their feedback. This helps to reduce the risk of failure and increases the chances of launching a successful product.

Concept testing can be conducted using various methods, including surveys, focus groups, and interviews. It typically involves presenting potential customers with a description, sketch, or prototype of the product and gathering their feedback on various aspects, such as its features, pricing, and overall appeal.

Concept testing is an integral part of the product development process as it can help companies avoid costly mistakes, such as launching products with no market demand. By gathering feedback early on in the product development process, companies can make informed decisions about whether to proceed with the product idea or make modifications to improve its chances of success.

Stage 1: Idea Generation

Ah, the brainstorming stage – the time to let your imagination run wild with new product ideas! But wait, before you start investing time and resources into developing a product, have you considered the importance of concept testing in the idea generation phase?

Concept testing is critical in the idea generation stage, as it helps to validate and refine your product ideas. Imagine spending months developing a product only to discover that it’s not something your target audience wants or needs. That’s where concept testing comes in – it helps you to validate your ideas before you invest significant resources into developing them.

Let’s say you have an idea for a new fitness tracker that tracks your daily water intake. You might think this is a great idea, but will your target audience feel the same? Through concept testing, you can present your idea to potential customers and gather their feedback on your product’s features, pricing, and overall appeal. If your target audience doesn’t see the value in tracking their water intake, you can refine your idea to include more appealing features.

In addition to validating your ideas, concept testing in the idea generation phase can also help you to generate new ideas. Presenting your product idea to potential customers may generate feedback that inspires new features or functionalities you have yet to consider.

Stage 2: Concept Development

Welcome to stage two – concept development! This is where you take your product ideas and start developing them into a tangible concept. But how do you know which concept is the most promising one? You guessed it – concept testing!

Concept testing in the concept development stage can help you to evaluate different concepts and identify the most promising ones. Let’s say you have developed three concepts for your fitness tracker – one that tracks water intake, one that tracks sleep patterns, and one that tracks heart rate. Through concept testing, you can present these concepts to potential customers and gather feedback on their level of interest in each one. Based on their feedback, you can identify which concept most appeals to your target audience.

Not only can concept testing help you to identify the most promising concept, but it can also help you to refine the concept further. Through feedback from potential customers, you may discover areas that need improvement or additional features that would make the product even more appealing.

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Stage 3: Prototype Testing

Now that you have a promising product concept, it’s time to develop and test a prototype with your target audience. This is where concept testing can help to refine your prototype and identify areas for improvement.

Let’s say you have developed a prototype of your fitness tracker that tracks water intake. You present it to potential customers, and while they are interested in the idea, they express concerns about the size and comfort of the tracker. Through concept testing, you can gather this feedback and refine your prototype to address these concerns. You could make the tracker smaller or adjust the design to make it more comfortable to wear.

In addition to refining your prototype, concept testing can help you identify areas for improvement. For example, if potential customers express confusion about how to use certain features, you may need to adjust the user interface to make it more intuitive.

Concept testing in the prototype testing stage can be conducted in various ways, such as usability testing or field testing. These methods allow you to gather feedback on the functionality and user experience of the prototype.

By refining your prototype based on feedback from concept testing, you can increase the chances of launching a successful product that meets the needs and desires of your target audience. So, don’t underestimate the power of concept testing in the prototype testing stage – it can make all the difference between a mediocre product and a successful one.

Stage 4: Launch Testing

Now let’s look at launch testing! This is where you test the market readiness of your product and identify potential issues before launch. 

Concept testing in the launch testing stage can help you gather feedback on your product’s final version before launch. This feedback can help you to identify potential issues, such as pricing concerns or a lack of interest in certain features. 

For example, if you have developed a new smartphone app, you can present it to potential customers and gather feedback on its functionality, design, and pricing. Based on this feedback, you can make necessary adjustments before launching the app to the market.

By gathering feedback from potential customers in the launch testing stage, you can also gain insights into the competition and the overall market demand for your product. This can help you to make informed decisions about pricing, marketing, and distribution strategies.

Concept testing in the launch testing stage can be conducted in various ways, such as beta testing or product demos. These methods allow you to gather feedback on the final version of your product and make necessary adjustments before launching.

Methodologies for concept testing

Now that we’ve explored the different stages of concept testing and their importance in product development, let’s dive deeper into the various methodologies that can be used for concept testing.

There are several different methods for conducting concept testing, each with advantages and disadvantages. The most commonly used methods include surveys, focus groups, and usability testing.

Surveys are a great way to gather feedback from a large number of potential customers. They can be conducted online or in person and are typically used to collect quantitative data on different aspects of a product concept, such as the level of interest in certain features or pricing.

On the other hand, focus groups are more qualitative and involve gathering a small group of potential customers to discuss and provide feedback on a product concept. They are often used to gain more in-depth insights into the thoughts and feelings of potential customers, as well as to gather ideas for new product features or functionalities.

Usability testing is another method that can be used to gather feedback on a product concept. It involves observing potential customers as they use a prototype of the product and gathering feedback on the usability and functionality of the product.

In addition to these methods, there are other types of concept testing, such as A/B and field testing. A/B testing involves presenting two different versions of a product concept to potential customers and gathering feedback on which one is more appealing. Field testing involves testing a product concept in a real-world setting, such as in a store or online marketplace.

Best Practices

Now that we’ve explored the different methodologies for concept testing let’s explore some best practices for conducting effective concept testing. These best practices help ensure that you gather the most valuable feedback and make informed decisions about your product development.

Firstly, defining clear research objectives before conducting concept testing is important. This will help you focus on the most important aspects of the product concept and gather relevant feedback for your goals. Clear research objectives also help ensure you don’t waste time or resources on gathering irrelevant feedback.

Secondly, recruiting the right participants for your concept testing is essential. This means targeting individuals representing your target audience and likely to use or purchase your product. It’s also important to ensure the participants are engaged and invested in the concept testing process. You can achieve this by providing incentives or rewards for their participation.

Another best practice is to use the correct methodology for your product concept and research objectives. This means choosing a method best suited for gathering feedback on the specific aspects of your product concept that you want to test. 

For example, if you want to gather quantitative data on pricing, a survey would be more appropriate than a focus group.

Finally, analyzing the data effectively is crucial to make informed decisions about your product development. This means looking for trends and patterns in the feedback and using this information to refine and improve your product concept. It’s also important to prioritize the feedback based on its relevance and impact on the product’s success.

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Limitations of concept testing

While concept testing is a valuable tool for product development, knowing its limitations is essential.

For example, concept testing can only provide feedback on the specific product concept being presented to potential customers. It may not capture all possible issues or challenges that arise once the product is launched in the market. 

Additionally, concept testing can be influenced by factors such as how the concept is presented, and the language used, or the participants’ demographic.

Another limitation of concept testing is that it may not capture a product’s emotional or experiential aspects. For example, a potential customer may express interest in a product concept, but they may have a negative emotional response once they use the product.

By acknowledging the limitations of concept testing, product development teams can use it as a tool in combination with other methods, such as user testing and market research, to gain a more comprehensive understanding of their product’s potential success in the market.

Case Studies in Concept Testing

Now let’s look at some real-life case studies of successful concept testing in product development. 

One example comes from the UK-based cosmetics company Lush. In 2018, Lush developed a new product concept for a solid shower gel. Before launching the product, Lush conducted concept testing by sending samples to customers and gathering feedback through surveys. The feedback was overwhelmingly positive, with customers expressing interest in the new product and suggesting additional scents for the line. Lush used this feedback to refine the product and launch it successfully in the market.

Another example comes from the US-based fast-food chain Taco Bell. In 2017, Taco Bell conducted concept testing for a new menu item called the Naked Chicken Chalupa. The company used focus groups and taste tests to gather feedback on the product concept and made adjustments based on the feedback. The Naked Chicken Chalupa was a huge success when launched, selling over 25 million units in its first year.

Finally, an example from Asia comes from the Chinese tech company Xiaomi. Xiaomi developed a new product concept for a foldable phone, but before launching the product, the company conducted concept testing by sending out a prototype to potential customers for feedback. The feedback was mixed, with customers expressing concerns about the phone’s durability. Xiaomi used this feedback to make necessary adjustments and launch a successful foldable phone.

Key Takeaways

In conclusion, concept testing is a crucial step in the product development process. It allows brands to gather feedback from potential customers, refine their product concepts, and increase their chances of success in the market. 

Brands can conduct effective concept testing and make informed decisions about their product development by following best practices such as defining clear research objectives, recruiting the right participants, and analyzing data effectively.

Here are some key takeaways to keep in mind:

  • Concept testing can be conducted at different stages of product development, including idea generation, concept development, prototype testing, and launch testing.
  • Different methodologies can be used for concept testing, including surveys, focus groups, and usability testing.
  • Effective concept testing requires careful planning, execution, and analysis of data.
  • Concept testing has limitations, and it should be combined with other methods to gain a more comprehensive understanding of a product’s potential success in the market.

Overall, concept testing is a valuable tool for product development that can help companies to create products that truly resonate with their target audience. By implementing the best practices and key takeaways discussed in this article, you can increase your chances of success and launch a product that will delight your customers.

If you want to conduct concept testing for your next product development project, consider using a market research agency like Kadence International. We have extensive experience conducting effective concept testing and can help you gather valuable feedback from potential customers. To get started, simply submit your research brief.

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Product managers and designers frequently get requests to design new products and add new features to existing products, making it difficult to determine which ideas to invest in for the best outcome. 

This is where concept testing comes into play. 

Concept testing ideas and even features for existing products before moving into implementation and design is the best way to approach a customer-centric product development process.

What is concept testing?

Concept testing is a market research method to get user feedback before bringing a new product or feature to the market. It often allows users to provide their input on potential solutions. When end users are involved in the initial product development and design phase, it takes the guesswork out of what consumers want and allows them to shape the idea before it is launched in the marketplace.

It involves putting the idea in front of real consumers and asking them to assess the product’s value in multiple areas. 

Whether the goal is to bring a new concept or product into the market, update an existing product, or change pricing or messaging, input from real customers translates into informed decision-making. This allows brands to save time, money, and resources while preventing financial losses due to failed products and also helps protect the brand and customer relationships.

In today’s highly competitive business environment, brands need to employ a customer-centric approach, and all decision-making should start and end with the consumers’ interests and preferences in mind.

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The value of concept testing

According to studies, more than 25 percent of total revenue and profits come from launching new products, which is true across industries and product categories. 

With concept testing, brands can validate an idea or vision before investing valuable resources into building something that may not resonate with its users. It also helps brands identify potential challenges in executing the idea. Concept testing precedes usability testing, which must be conducted once the refined design prototype or wireframe becomes available. Product testing is crucial and happens after the final product is ready for launch to get first-hand information on how consumers will respond to the final product. 

Launching a product or service is a massive undertaking, even for larger organizations. Research shows only 55 percent of all product launches occur on schedule, and 45 percent are delayed by at least one month. 

Therefore, brands must ensure the product resonates with the end user before launching it. Concept testing helps confirm that your assumptions around a solution or idea are correct. 

Concept testing comes after the ideation phase and is a way of testing ideas that have been developed to an extent but need further refinement and provides a more detailed understanding of the needs of your potential customers. 

Concept testing may also be used to design a complete User Experience (UX). According to studies, every USD 1 invested in User Experience (UX) design results in a USD 100 return. Providing consumers with a seamless UX is crucial for brands to stay competitive in today’s volatile market conditions. 

Concept testing should be considered an unobstructed learning process where brands open the concept up to end users to discover their perceptions —without any predefined parameters.

Benefits of concept testing

Concept testing minimizes risk and is easy to set up.

Concept testing allows brands to test and understand how real consumers will feel about the product before investing time, money, effort, and resources into it, which minimizes the risk of product failure. 

Concept testing can help you optimize the concept before the launch.

Concept testing can provide more information regarding the potential roadblocks to implementation, consumer perceptions, price perceptions, competition, and how the new concept fits into the brand. 

It also allows brands to test multiple solutions or concepts to arrive at the best one and helps provide some information on potential market demand.

Research helps forge strong brands.

Concept testing is a great way to show consumers and investors that your brand believes in constant innovation, has a customer-centric approach, and is transparent. This helps boost loyalty and enhance brand value and equity.

Concept testing prevents costly mistakes.

Even some of the biggest brands, like Google and Coca-Cola, are not immune to making mistakes due to false assumptions about what consumers want (or do not want).

In 2012, Google first announced Google Glass —an eyeglasses-shaped head-mounted display with smartphone functionality. It was based on the premise that “technology should work for you —to be there when you need it and get out of your way when you don’t.” The brand wrongly assumed what consumers wanted from technology. In 2015, the company discontinued the product due to low market demand. 

Coca-Cola is another great example illustrating the importance of concept testing. When Coca-Cola’s flagship cola drink started losing market share to Pepsi, it changed its drink formula for the first time in 99 years. It introduced New Coke, which failed miserably. The brand reintroduced its older recipe and rebranded it as Coca-Cola Classic.

Similarly, in 1990, US-based beer Coors introduced Coors Rocky Mountain Sparkling Water to tap into the fast-growing bottled water segment but fell flat as the Coors name confused consumers. 

Concept testing boosts confidence in product launch and team buy-in.

If you have a concept but need to assure the senior team that it will work, concept testing is the best way because you can show evidence that real consumers will use it.  

The importance of well-designed questions

Over 80 percent of all new products fail, and concept testing allows brands to determine if a new product or feature is a good market fit by asking real users the right questions. 

Therefore, you must ask the right questions that will give you valuable insights into the needs and requirements of real users. Determining the metrics, you will measure in your concept testing is crucial. 

You will set your goals depending on the concept and methodology you choose, and your survey questions should aim to reach these goals. For instance, if you are testing a new type of single-serve, wireless blender, the goal is to determine if your potential customers need a product that makes smoothies on the go. The questions will revolve around understanding the consumer better and if they need a solution like this, along with any other features they might want to see in this blender, for instance, a sippy cup cover or straw to go with it. 

This is where research design comes into play, and the research questions depend upon the business need. For instance, if a brand is taking its concept to a new market segment, they need to conduct a needs analysis using qualitative and quantitative research methods. The questions will be designed to find out if the concept will work in the new market. 

Let’s say the brand is testing a new concept before its initial introduction. In that case, they need to conduct Concept Fulfillment utilizing qualitative research to determine if there is a need for the new product concept.

Some common goals brands set for concept testing are as follows.

  • Get a metric on how likely existing customers and new market segments will be to purchase the product. 
  • How the product will do based on current competition in the market, and what features will make it stand out. 
  • Learning which features would get existing customers to purchase from the brand.

These goals provide brands with invaluable, high-quality data and insights into consumer behaviors, attitudes, and preferences. 

Concept testing methodologies

Brands test concepts in many ways and all the methods involve getting feedback from potential users on the idea’s validity. It can be done via a face-to-face or remote interview. Depending on the concept and the study’s goals, it can be done asynchronously or unmoderated. 

There are four standard methods for concept testing. They are based on the number of ideas you want to evaluate.

Comparative testing

This method is used when you have more than one potential concept to test. Brands use the comparative method to see how multiple concepts measure against each other.

When using this method in a survey, respondents are asked to rate each concept against a set of criteria. Questions must be specific features that can also be ranked to determine which features are most preferred by respondents.

Monadic testing

Unlike comparative testing, monadic testing shows research participants one product or idea. 

This concept testing takes your entire target audience and breaks it into subsets, showing only one concept to each. These user-friendly tests provide a deep dive into the consumer’s mind. They also reduce bias and provide accurate results.

Sequential monadic testing

A sequential monadic survey shows your entire target audience or a subset of the audience, either all of your concepts or some of them—with at least two concepts being shown randomly.

Proto-monadic testing

Proto-monadic testing combines sequential monadic and comparison testing. It asks participants to analyze concepts and compare features to help them choose the best concept.

Steps in Concept testing survey design

When you’re ready to test your concepts, there are four steps to follow:

Choose the most suitable methodology for your business needs.

Select the best methodology depending on the scope, time, and number of features or concepts being tested.

Set a goal.

Work backward, set a goal based on the objective and the information you want to gather from your customers, and design survey questions accordingly.

Choose survey components appropriately.

Make sure you use the most appropriate components for your surveys. From Likert scales to images and demographic questions, brands should carefully make these choices to design a survey with questions that will produce valuable data.

Identify the most promising concept.

Review the collected data to get a clear picture of the concept favored by the target market. Dive deeper into the most desirable features to determine which concept has the highest potential for market success. 

If the data reveals something unexpected or is something you did not imagine before, feel free to change course. This is why you conducted concept testing in the first place —to ensure the concept works in the marketplace. The ultimate goal of this study is to do what’s profitable for the brand. 

Real-world examples of Concept testing

It’s one thing to determine if people want a product or service and yet another to say they are willing to open their wallets and buy the product. 

This is where purchase intent testing comes into play. This helps determine if people will purchase your product or service at your desired price.

Many brands test the product without the price first to gauge consumer interest and later add price to determine purchase intent. 

US-based Electric Vehicle brand Tesla conducted purchase intent testing for a car model before it even designed it.

In 2016, the pioneering EV automobile brand tested purchase intent for the Tesla Model 3 before it was even designed. Interested buyers were asked to put down USD 1,000 for the Tesla Model 3, and about 400,000 people ended up putting down money to book the car. The participants also provided feedback on the car, and Tesla made modifications and features based on real customer input. This also gave Tesla the confidence and the capital needed to develop the car. 

Another undefeated brand due to its concept testing research is Denmark-based Lego, a plastic building-block toy company. For years, Lego was predominantly bought for boys, so the brand conducted extensive market research to discover that boys and girls played with Legos differently. Boys preferred stand-alone structures, while girls enjoyed recreating backgrounds, scenes, and environments. 

In 2012, based on these findings, the brand launched the Lego Friends product range with cafes, salons, supermarkets, and so forth to tap into the new consumer segment successfully. 

Concept testing is a great way to evaluate and identify winning product concepts. It promotes innovative thinking and developing products, features, and pricing that resonates with end users. It allows brands to stay ahead of the competition by developing and designing concepts based on market demand and creating products only after testing the idea and getting invaluable feedback from real consumers. 

Kadence International helps leading brands make game-changing decisions. If you are looking for a research partner to help better understand your customers, we would love to help. Fill out our Request for a Proposal here.

Brand trust is one of the most valuable intangible assets of a company. Brand trust is meeting or exceeding consumer expectations by how well a brand delivers on its promises with its products and services. When a product fails to launch successfully, it can be costly and erode brand trust, which can take years to rebuild.

While product innovation is essential to building market share and customer satisfaction, products that fail to launch successfully can have the opposite effect, eroding market share, creating dissatisfaction, and sometimes bad press. 

For example, the US Food and Drug Administration (FDA) recently reviewed claims that pulse oximeters, the medical device that clamps onto a patient’s fingertip to measure their blood oxygen levels, can yield less accurate readings in people with darker skin tones. Medical professionals use these devices in ambulances, surgeries, emergency rooms, and hospitals worldwide, so it is alarming that these commonplace devices could be inaccurate. Thorough product testing with a diverse sample could have potentially detected this problem before launch and helped avoid the erosion of trust for these products. 

Recalling faulty, dangerous, or flawed products can cost a company millions and cost much more in lost brand trust. The most costly product recall to date is the Takata Airbag which is said to have cost USD 24 billion.

While safety, functionality, and accuracy are reasons to conduct product testing, it also analyzes a product concept or feature to determine how existing or potential customers will use or react to a product. 

Product testing is a research methodology that allows brands to collect qualitative and quantitative data about consumers’ potential consumption and usage behavior, preferences, and reactions to a product.

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Product testing helps development team members measure a product’s market potential. Brands can use product testing research to determine whether a product functions as expected or whether a target audience will find value in a new product feature. Specifically, product testing helps research, marketing, product managers, and developers:

  • Gain insights: Discover valuable insights about customers’ needs and preferences, which can provide direction during development.
  • Improve products: By gathering and reviewing feedback during development, product development teams can use this information to improve products to meet customers’ expectations.
  • Save time: Product testing can help teams save time during development by identifying potential problems or risks early in the development process before launching the product to consumers.
  • Achieve business goals: Product testing helps product development teams prioritize so they can achieve key business goals, such as attracting more customers or increasing revenue.

Six common types of product testing

The type of product testing deployed can vary based on the project. Here are six common types of product testing. 

1. Concept testing

Commonly used to explore the feasibility of a product idea or concept, concept testing evaluates how the product may perform in the marketplace when launched. 

Depending on the product, concept testing often involves presentations, customer surveys, or wireframes. Concept testing can help product developers and engineers determine whether to progress to the next stage of development by evaluating responses to the idea. It can also clarify the features or functionality customers want from the product.

2. QA testing

Quality assurance (QA) testing is commonly conducted in a staged environment, where product developers test the features or functionality of a product before its public release. QA testing research teams evaluate the product using different scenarios to imitate a customer’s use. QA testing can test product updates or new features before releasing the changes to a broader audience. This type of research ensures the product works as expected and helps teams identify problems before launching the product.

3.A/B testing

With this type of product testing, product developers create two versions of a product’s feature or component and ask a research sample of customers which version they prefer. The differences in the versions may be slight, such as two different color schemes on a product label, or they may be considerable, such as two distinct brand names. A/B testing helps product developers and engineers make design choices based on customers’ preferences. 

4. Market testing

Market testing introduces a product to customers to assess the market potential. Market testing is finding the optimal landscape, at what price point to sell, and which types of customers fit best. The product and research teams typically release the product to customers in different geographic areas and/or demographic groups, such as Gen-Z. Market testing can help product development teams measure the potential success of a product in the market. Market testing is often used to forecast product sales, plan advertising campaigns and determine effective distribution strategies.

5. User testing

User testing is research after the development team has built the product. Product development and research teams perform user studies by observing how customers interact with their products. They gather data and information based on customers’ experiences with the product to determine whether to make changes in future product releases. 

6. Regression testing

Regression testing occurs after customers have begun using the product. During regression testing, teams test the current features of a product to help them determine the features they want to add or update. While some existing features may remain, regression testing helps product development teams determine if newly added features impact the current product’s functionality.

Product testing best practices

There is rarely a one-size-fits-all when it comes to product testing. To get the most from your next (or first) product test, it is always best practice to speak with experts in the field. 

  • Use different methods: It’s helpful to use different product testing methods to provide clear direction throughout all phases of development. For example, your product development team may use concept testing to determine the viability of a product idea, A/B testing to assess its design, and QA testing to ensure the product functions as expected.
  • Refrain from making assumptions: Though it’s helpful to develop a hypothesis before product testing, refrain from making assumptions about how customers may use or react to a product. This mindset allows you to evaluate data objectively.
  • Test successful products: While it’s important to conduct product testing to identify potential problems or risks, it’s also helpful to test successful products to learn what’s already working well. Collect this data through product testing and use that information when developing future products for continued success.

Launching a new product into an existing market, releasing new features, or launching a current product to a new audience is an exciting time for a brand. Product launches come with a certain amount of risk. With the right product testing research, you can swing the pendulum in your favor, make sound strategic decisions and maximize optimal returns. 

Just like reaching an unknown destination without a map is difficult, so is building a business strategy without competitive intelligence. 

Competitive intelligence helps brands shape their product development, distribution channels, pricing, messaging, positioning, brand promotions, and features. It allows brands to identify their challenges and opportunities in the market in relation to their competition, so they can see what their competitors are doing and differentiate themselves from them. 

What is competitive intelligence (CI)?

Competitive intelligence refers to any intentional research where brands collect, analyze, and utilize data and information gathered on their competitors, customers, and other external factors, potentially providing brands with a competitive advantage.

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When brands ethically and legally collect competitive intelligence, it can help boost the organization’s decision-making capabilities. The goal of any competitive intelligence study is to create a business plan and strategy so organizations can make well-informed decisions based on market considerations.

Competitive intelligence goes beyond knowing the competition; the process is designed to take a deep dive to unravel the finer points of the competitor’s target markets and business strategy. 

The Japanese auto industry carried out a compelling competitive intelligence study in the 1970s. The Japanese automobile industry analyzed the U.S. automobile market to discover a need for smaller, more fuel-efficient cars in a country where gasoline prices were rising. Using competitive intelligence across its borders, Japanese automakers identified a critical trend to beat their competition in the U.S. 

Competitive intelligence plays a vital role in all major departments of an organization and can take on a different meaning for each department or function. For instance, for a product development team, competitive intelligence may mean new features being added to products. For a sales executive, it may be helpful to know how to create a winning proposal. For leadership, it may be understanding the competitor’s marketing strategies so they can craft a plan to gain more foothold in the market.

Competitive Intelligence studies and exercises can be tactical (shorter-term) or strategic (longer-term). The goal of tactical competitive intelligence studies, for instance, can be to obtain insights into increasing revenues or gaining market share. At the same time, strategic or longer-term reporting focuses on significant risks, threats, and opportunities, present or emerging. 

A competitive intelligence study typically includes a wealth of information and insights from various sources, like government records, online mentions, social media, trade shows and journals, customer data and interviews, and traditional news media, to name a few. These sources are easily accessible and form the starting point for the studies. More in-depth information from distributors, suppliers, competitors, and customers is needed to make truly informed decisions. 

What are the key benefits of competitive intelligence?

There is no substitute for Competitive intelligence research when it is undertaken with care and diligence. It is a powerful tool for brands to gain market share, boost revenue, and continue to build the right products at competitive prices.

Here are some key benefits of using competitive intelligence for brands:

#1. Ability to predict patterns and emerging trends

As brands excavate an enormous amount of data and insights related to their competitor’s activities, they begin to identify and foresee emerging trends in the industry. This allows brands to gain deep foresight to make informed decisions and strategic business plans. 

#2. Aids in brand positioning

As brands gather insights and data about the competitive landscape, they also gain clarity on their activities and messaging. It helps them understand what works and doesn’t and cement their marketing. 

#3. Helps make more informed decisions.

When brands unearth information, they gain critical insights into how the customers feel about their brand and the competing brands. This gives brands a better view of their customers’ wants and how their competitors are meeting the needs of the target markets. 

#4. Boosts returns and profits

When you have a good understanding of the strategies and tactics employed by your competition and how they are performing, you will be better able to invest in areas that bring the highest returns, reducing risks and boosting profits.

Going back to the definition of Competitive Intelligence, we can see three necessary steps: “collect, analyze, and use competitor and market information to make informed decisions.”

Collecting data

There are many ways of unearthing relevant competitor data legally and ethically. Searching for information online may seem rudimentary, but it can provide invaluable information about the competitors and their activities. This information is readily available and accessible on the internet and is considered low-hanging fruit. With a few simple web searches, you can find great information on what the competitor is doing and what it has done in the past. You can also learn about product features, pricing, innovations, leadership, and important news and announcements relevant to your competition. There are tools that provide insight into the competitor’s search engine optimization activities and their online advertising efforts. 

From here, brands often go deeper and beyond the internet to analyze target markets and customer segments. Brands use quantitative and qualitative market research to gain more market insight. 

Brands use data to analyze their competition beyond the simple search process. This entails going through endless data and making sense of it all can become cumbersome. This is where data mining comes into play. Besides gathering data from third-party sources, brands also gather human intelligence by interviewing relevant people, including customers and past suppliers. This is a time-consuming process and must be undertaken by experts in market research to ensure it is done ethically and legally.  

Analyzing data

Analysis of data is a crucial step in the competitive intelligence process. Once brands collect data, it needs to be analyzed carefully to provide actionable insights. This allows brands to understand the patterns and separate them from the outliers. 

The analysis aims to uncover strengths, weaknesses, opportunities, and threats as they relate to the competitive landscape. Therefore, collecting and analyzing information from disparate sources is essential in verifying their authenticity and validity. This helps us move away from making assumptions and gaining real insights from more accurate pieces of data. 

Crafting a strategy 

Once a brand has enough verified data and information on its competitors and strategies, it can utilize it to differentiate itself and make informed decisions regarding product, price, messaging, and other essential aspects. It allows brands to weigh the competitor’s strengths, weaknesses, and opportunities in relation to their own to gain a competitive advantage.

For instance, pricing is an important area for differentiation but can only be done right if everything is studied and taken into account to find the right price that is profitable and aligns with the customer’s perceived value of a brand or product offering. Therefore, a successful price is not about pricing your product at the same or lower price than your competitor but positioning your brand as the choice that provides the greatest value. And to make that happen, you need to know the price of competing products and their perceived value in the buyer’s mind. This calls for a thorough study and analysis of the competing products, markets, and consumers. 

Today, e-commerce companies use sophisticated software for competitive pricing due to the market’s highly competitive and dynamic nature. Read more on how e-commerce brands utilize price monitoring software technology to track competitor pricing here.

To get the complete picture, brands may conduct competitive intelligence surveys. They can define their target audience and use various demographic and psychographic questions to identify consumer behavior. These also include questions about competing products and services. You may also use ranking and rating type questions and identify any unmet needs or gaps in the marketplace or use open-ended questions to get a more in-depth view of the consumer’s mind. Brand recall and recognition surveys are also helpful in gaining consumer perception of various brands. For instance, a sparkling water brand may ask: “When you think of bottled sparkling water, what brand comes to mind first?” This can help brands discover how frequently their brand is mentioned compared to competing brands in the category.

When armed with the powerful insights gained through competitive intelligence, brands can be more strategic in all aspects of business, from product development to pricing and distribution. By differentiating themselves from competitors, they can gain valuable market share, grow brand value, and brand equity, and boost their return on investment (ROI).

At Kadence International, market researchers are at the heart of our team. In this series, we honor some of our colleagues, asking them about their experience working within the market research industry and what the future holds for the industry.

Name: Arpan Jhingran

Position: Project Manager

Kadence Office: New Delhi, India

I joined the Kadence India office in February, 2010.

What does a typical day or week look like for you in your current role? Or what are your primary responsibilities/duties?*

Client Servicing is a significant part of what I do for the project life cycle, starting from sharing the cost to the invoice raising and updating the client and senior management on a timely basis. Our responsibilities include solving the field operations query by speaking to the client and finding the best solution.

Tell us a little about your career so far. What was your first job or role? How did you get started with market research? What other roles (in market research) have you had?*

I had worked with ACC Concrete as a management trainee at their Mumbai location, then moved to Delhi. Kadence is my first company in the Market Research industry. I joined as Operations Executive and was promoted to Senior Field Executive. I have been a project manager for the past five years.

Did you always know that you were destined for a career in market research? Why? If not, what did you actually think your career would be, or what did you say you wanted to do “when you grew up” as a child?*

During my MBA, I was fascinated with the Market Research industry because of its involvement in every possible sector. I was also intrigued by the prospect of using different methodologies for deriving results and presenting those as findings and insights to brands.

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What is your favorite quote or the motto you live by?*

Live and let live

What is the best thing about the culture at Kadence?*

I love the open culture at Kadence, which allows you to work freely and use your experience to guide you in the right direction.

What essential skills are required to excel as a Market Researcher?*

Excellent and clear communication is paramount to building trust with the client.

What is unique about the market research field / and or consumers in your country/ region?*

There is much enthusiasm for trying new products or giving their opinions on topics we need data and insights on. 

What is it about the field of market research you wish everyone knew?*

Much hard work goes behind every outcome to improve any product or idea.

What piece of advice would you give someone looking to start a career in market research?*

Clear communication is the key in any service industry to building confidence, and I would like to advise anyone inclined to join market research to hone their communication skills. 

How have you seen consumer behavior change in the past 2 – 3 years as a result of the pandemic? If so, what are your main observations?*

The expenditure pattern has changed drastically. People are ready to spend on what they want rather than save for the future. 

For one of our projects in the healthcare field, we had to visit government hospitals and understand the conditions and processes by speaking to doctors, medical staff, and patients. Also, we had to talk to doctors without medical degrees and use medication based on their experience. That was great learning of my career.

If you could time travel into the future ten years, how would market research evolve?*

I see market research moving online compared to the current scenario of being an offline-dominated industry.

What do you like to do in your free time when you are not working?  *

I enjoy spending time with my family or sometimes going out with my friends.

What is something you have accomplished in work or life that you are particularly proud of?*

A beautiful family.

What is your all-time favorite food or cuisine?

South Indian Food (particularly Dosas).

What is your all-time favorite travel or vacation spot, and why?

I love hill stations because of the drive up there and the weather. 

How has Kadence’s remote work opportunity allowed you to achieve a work/life balance? We would love an example.

It gives me some more time to spend with my family.

Emerging technological advancements are transforming market research forever. As many consumers move online, the way brands identify and understand consumer needs is being reimagined.

Many technology trends disrupt the market research industry —from data collection and new product launches to tracking brand performance. This blog post will focus on the breakthroughs in technology impacting brand tracking and product performance tracking.

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Brand and performance tracking refers to the process of continually measuring brand health over a period within the target audience. It allows brands to measure the performance of a product in relation to its competition. After a new product is launched, market research helps brands gauge performance to stay competitive. 

With consumers increasingly moving online, brands can tap into new, vast, and reliable consumer behavior data in real-time. This has also made Direct to Consumer marketing much more common. Brands like Happy Human (Singapore), Dime Beauty (U.S.A.), Joi (Malaysia), Sleepy Owl (India), Recess (Philipines), Adopt a Cow (China), and Knot (Japan) have eliminated the middleman to create, develop, sell, and distribute their products directly to the end-user. The absence of middlemen and brick-and-mortar stores allows them to maintain quality and reduce prices. But this is not all. These brands also have the added advantage of measuring performance directly without employing market research across several retail outlets. They can discover brand sentiment directly, making them more agile, nimble, and competitive. 

While there is still a place for traditional research methodologies, technologies like machine learning, Artificial Intelligence, Virtual Reality, and chatbots continue to reinvent the market research industry. 

Let’s look at the primary technologies in brand tracking and competition analysis that are changing the face of market research. 

E-commerce brands utilize price monitoring software technology to track competitor pricing.

In the fiercely competitive E-commerce world, the key to outperforming the competition is tracking and monitoring the price competing brands charge for similar products and services. Brands need to keep a keen eye on their competitor’s pricing strategy and price changes over several products to stay competitive, and that’s not an easy task even for larger companies. 

This is where e-commerce price monitoring technology comes into play. 

Ecommerce price monitoring software allows brands to track their competitor’s price changes and dynamically adjust their pricing. 

By employing this type of software, brands can stay abreast with competitor pricing and adjust pricing based on demand, competition, and inventory levels. 

Many such tools are available in the market, including Minderest, Price2Spy, and Prisync, with sophisticated matching technology and high levels of accuracy. 

Market research utilizes machine learning and A.I. for brand and performance tracking to revamp advertising and messaging. 

While some grey areas are associated with A.I. in other fields, the market research industry has embraced this technology.

One of the things brands need to track constantly is how their messaging is resonating with the target audience and how the market perceives their brand. This is because a brand is not just the logo and tagline. It is a sum of all parts and is an overall feeling that tells a narrative and evokes sentiment and emotion in the audience. 

Technology helps brands better understand brand performance and perception to inform better decision-making. It allows brands to measure and bridge the gaps between their intent and how the audiences interpret and perceive their message.

The use of A.I. in brand tracking has allowed market researchers to analyze qualitative surveys at a fraction of the time taken by manual data collection methods. Furthermore, this enables them to ask more open-ended and follow-up questions, find the right panelists faster, eliminate bias, write reports quickly, and significantly improve the quality of their surveys and reports. 

In today’s dynamic digital marketplaces, A.I. is powering brand tracking to gauge the changing consumer perceptions. 

Sentiment analysis is a sub-category of A.I. and N.L.P., which automatically uncovers feelings, emotions, and sentiments behind plain blocks of text. It is extensively used in brand tracking because it is efficient, reliable, and accurate. 

Over 45 percent of the world is on social media. There are about 500 million tweets per day, and about 1.96 billion people worldwide use Facebook every day. Consumers constantly call out brands on these social media platforms and review sites. It would be overwhelming and near impossible to collect data manually. Brands can effectively gauge overall brand sentiment across platforms and channels online using automated tools. 

For instance, when the popular ride-sharing service, UBER, launched a new version of its app, it used social media monitoring and text analytics to measure user sentiment about the new version of the app. Eye-tracking technology works similarly and can track users’ engagement scores and emotions on a website. 

There are several brand tracking tools available for brands. Candymaker Mars used one such tool that combines the standard digital video metrics, like view-through rates and skip rates, with facial expression tracking of the viewers while watching the ad using an A.I. algorithm.

While the tool measures digital behaviors, it puts enormous weight on gauging emotion and sentiment. This technology is essential to track brand performance in a world plagued with minuscule attention spans. It allows brands to obtain a complete picture of consumer perception. 

Many technologies use participants’ webcams to track their facial and emotional responses while viewing ads, providing invaluable data used to inform sales forecasts. 

Chatbots are aggregating vast amounts of consumer data.

The usage of chatbots as a communication channel between brands and consumers has increased by 92 percent since 2019. 

As many consumers shop online, they engage with chatbots, making them the fastest-growing brand communication channel.  

A survey found that up to 80 percent of users answered questions, three times higher than responses from email surveys. 

Brands like IKEA are using chatbots to gather valuable consumer feedback. Companies use Whatsapp and Facebook messenger to measure consumer sentiment and feedback efficiently. 

The use of brand tracking cannot be overemphasized. It allows brands to understand how their current audience perceives the brand. It can also lead brands to uncover until now undiscovered target audiences. 

With brand tracking software, brands can see the true impact of their campaigns. Brand tracking holds the key to insights any brand needs to thrive. Using the right tools and technology, brands can obtain actionable information about the brand perception among the target audience and how it scores against the competition.

A brand is one of the most valuable assets of an organization. It is, therefore, critical to continually measure satisfaction, awareness, and perception. Incorporating brand tracking into their marketing strategy can help brands understand their target audiences and consumer needs and make more profitable marketing decisions. Technology has made it easier to uncover massive data sets to monitor a brand effectively and accurately. By combining this technology with digital metrics, brands can increase their competitive advantage.

Launching a new fast-moving consumer goods (FMCG) product is a process wrought with challenges and notoriously difficult to pull off successfully. In fact, it’s such a treacherous domain that approximately 80-85% of all FMCG launches fail! So how do you successfully launch a new FMCG product in the market?

Companies need to do all they can to maximize their chances of success when it comes to launching their product. This means getting all the different stages of the process right, investing the right amount of time and resources into planning, and making use of all the tools and knowledge at their disposal.

In this article, we’ll show you how to launch a new FMCG product in the market successfully. To do this right, you need to start at the very beginning by considering what makes any FMCG product successful.

What makes an FMCG product successful?

There are a number of factors that successful FMCG products have in common. Let’s take a look at 3 things that separate good products from failures.

They’re distinct

Successful FMCG products have to offer something that sets them apart from all the other similar products on the shelves. However, this can be a tricky balancing act — you don’t want your product to be so different that it moves away from what the customer wants. 

If, for example, you’re selling a brand of instant coffee, you know your customers want some variety of coffee that they can pour into a mug and get a fresh beverage in seconds. But at the same time, you want your product to stand out and offer something more than all the other instant coffee brands. 

Brands that can strike this balance right and create a distinctive FMCG product that continues to delight the customer will be on the road to success.

They’re what people want right now

The FMCG space is defined by being in a constant state of change and flux. Innovation is happening all the time, and people’s tastes are constantly changing.

Successful FMCG products are able to tap into trends and popular demand, giving customers what they want right now as opposed to what they wanted five years ago. For example, as people become more health-conscious, their taste in snacks has changed. The companies who picked up on this change in demands and adapted their product offering to include healthy, low-calorie, high-protein snacks were the ones most able to adapt and succeed in a changing market.

They persist

In a market where goods go in and out of fashion quickly, brands that can stand the test of time are at a huge advantage. Household names like Coca-Cola, L’Oréal, and Nestle are household names because they’re masters at staying relevant and in demand in markets that are prone to constant change.

Doing this successfully requires an intimate knowledge of your market and customers and a knack for constantly delivering even as tastes and trends evolve.

emerging-beverage-trends

Why do FMCG product launches fail so often?

There are lots of reasons why launching an FMCG product is so hard and why so many fail. Here are some of the main reasons FMCG launches tend to come up short.

It’s a competitive space

There’s no getting around it — there are lots of FMCG products out there. When you enter this market, you’ll be competing with many other brands, brands that have often been in the game for many years.

If you don’t get it right from the very beginning, you’ll never be able to effectively compete, and your target customers will go straight to the brands they have been using for as long as they can remember.

Failure to use data and market research properly

Today’s businesses are blessed with more data than ever before in history. Much, much more. And this can be augmented by wider market research to understand the market, the key trends at play and reactions to your concept or product. If used correctly, this data and insight allows you to better understand your customers and launch a product that takes the market by storm.

Unfortunately, many FMCG brands fail to tap into that rich reservoir of data, missing out on the advantages it offers and instead launching a product that isn’t closely aligned with what customers want.

Development costs and lack of funding

Another characteristic of FMCG launches is that they’re expensive. Developing a successful FMCG product can cost a huge amount of money, and this typically requires a lot of reliable funding and investment.

If you fail to secure enough funding for your project, you’re setting up the entire launch for failure.

Failure to understand timescales and stick to them

Launching an FMCG product involves a huge number of moving parts and deadlines. If you aren’t careful, it’s easy to mess this up and end up falling behind the dates you promised.

One clear example is shipping times. If your product fails to reach your customer within the time they expect, you’re creating a recipe for canceled orders, damaged reputation, lost money, and a failed launch.

Failure to understand the importance of constant innovation

The FMCG space is defined by constant, ongoing innovation. Companies are investing vast sums of money into making sure their next product is enough to stand out from the fierce competition and keep customers delighted. To survive and succeed as an FMCG brand, you need to be constantly learning, adapting, and innovating. It never ends, and it’s the only way to avoid failure.

How to launch a new FMCG product in the market successfully


Launching a new Fast-Moving Consumer Goods (FMCG) product in the market successfully requires careful planning and execution. Here are some key steps to ensure a successful launch:

  1. Market Research: Begin by conducting thorough market research to identify the target audience, understand their needs, and assess the competition. This will help you position your product effectively and differentiate it from existing offerings.
  2. Product Development: Develop a high-quality product that meets the demands of the target market. Focus on creating a unique value proposition, whether it’s a new feature, improved formula, or innovative packaging.
  3. Marketing Strategy: Craft a comprehensive marketing strategy that encompasses product positioning, pricing, distribution channels, and promotional activities. Define your brand’s identity and messaging to create a strong connection with consumers.
  4. Pre-Launch Buzz: Build anticipation for your product before the launch by creating buzz through teaser campaigns, social media engagement, influencer partnerships, and targeted advertising. Leverage the power of digital marketing to reach a wide audience.
  5. Strategic Partnerships: Collaborate with retailers, distributors, or e-commerce platforms to ensure widespread availability of your product. Secure prime shelf space or online visibility to enhance its visibility and accessibility.
  6. Launch Event: Organize a well-planned launch event to generate excitement and media coverage. Invite key stakeholders, influencers, and journalists to showcase your product and communicate its unique features and benefits.
  7. Sampling and Trials: Offer free samples or trial sizes to consumers to encourage them to experience your product firsthand. This can help generate positive word-of-mouth and build brand loyalty.
  8. Ongoing Marketing: Sustain the momentum post-launch by implementing a robust marketing campaign. Utilize various channels such as social media, advertising, public relations, and content marketing to engage with your target audience consistently.
  9. Continuous Improvement: Collect customer feedback, analyze market trends, and adapt your product and marketing strategies accordingly. Stay agile and responsive to changing consumer preferences to maintain a competitive edge.
  10. Monitor Performance: Track sales, market share, customer feedback, and brand perception to evaluate the success of your launch. Make data-driven decisions to optimize your future marketing efforts.

Launching a new FMCG product requires a well-rounded approach that incorporates thorough market research, effective marketing strategies, strategic partnerships, and continuous improvement. By following these steps, you can increase your chances of a successful market entry and build a strong foundation for your brand.

Understand the market and your customers at the outset through market research

Understanding your customers and the market is absolutely critical when thinking about how to launch a new FMCG product in the market. You need to know as much as possible about your customer’s pain points, desires, demographics, what they’re already buying, and more. 

Understanding the broader market you’re operating in is important too. This can help you identify trends to capitalize on and size the opportunity for your FMCG launch. 

This research should take place long before the product launch, in the initial stages of planning to help inform the ideation process.

Testing, testing 

Research is also important later in the process when it comes to testing your ideas with consumers. Quantitative concept testing can help you whittle down your ideas and select the ones with the best chance of success to take forwards. Qualitative concept testing can help you to further refine those ideas in line with consumer wants and needs. There are also other elements of research to consider further down the line once you reach the prototype stage, such as pack testing, central location testing or test tastes to optimize your product ahead of launch. 

You can read more about what research you need to consider at each stage of the new product development process in our guide. 

Get your marketing right

Effective marketing is a crucial element of every FMCG product launch. Use insights from the NPD process to guide your messaging – on the pack, at the point of sale, and in your marketing and comms – to cut through with consumers and steal share of market.

Always be learning 

Testing should be an ongoing process — make sure you continue to test, measure and learn, even after the product launch. Collecting data, and making tweaks in response to the feedback you receive can help inform product relaunches or line extensions to keep you at the forefront of your category. 

Launching an FMCG product is no mean feat. It’s famously hard to pull off, and statistically, most brands who attempt it fail. But that doesn’t mean it’s impossible, and with the right approach and expertise, you can significantly improve your chances of success.

To find out how Kadence can help you boost your chances of success with an FMCG product launch, get in touch.

Concept testing and test marketing are two very important concepts when it comes to developing new products for the market.

It’s common to confuse the two ideas – indeed there are indeed several significant similarities between the two. Both concept testing and test marketing play a similar role: ostensibly, to make sure a product is ready to launch and to iron out any issues that might have gone undetected during the design and planning phase.

However, concept testing and test marketing are different processes and are used for different reasons. In this article, we’ll take a look at each, exploring both their similarities and their differences. Let’s start with concept testing.

Concept testing

Concept testing is how we test a product idea before it enters the market. As the name suggests, it involves putting the concept in front of real customers and asking them to evaluate it in multiple areas. This helps us find out how real-life customers will react to the product.

Concept testing has a series of powerful benefits for marketers. It allows you to quickly notice and fix potential errors before the product launches for real, brings fresh insights to your project, and gives you data-driven feedback that you can use to get buy-in from other members of your organization.

There are a number of methods for doing concept testing, spanning quantitative and qualitative methodologies. Each has its own pros and cons and they have different applications.

(More information can be found in our comprehensive guide to concept testing).

Now we know the basics of concept testing, let’s take a look at test marketing and how it’s different.

Test Marketing

What is test marketing?

Test marketing plays a similar role to concept testing. Its goal, like concept testing, is to assess how well a product will perform in its market.

However, test marketing has a broader scope. Instead of focusing solely on the concept or product, test marketing aims to evaluate your entire marketing plan. It takes into account advertising, distribution, sales, and many other components of your overall strategy, but it does this without actually fully launching the product and taking on all the associated risks. 

In product test marketing, you basically run a mini launch for your product in a selected market and see how it performs. It’s like a crash run of a product launch.

Neither the launch nor the test market is big enough that you would suffer greatly if the product were to fail. The goal is to trial run your entire strategy to get an idea of how it would fare on a bigger scale. This allows you to pinpoint any errors and make any changes in a relatively low-risk way.

What are the advantages and disadvantages of test marketing?

The pros of test marketing

  • You get real insights into how the product would perform in a natural marketing environment. There are many things you simply can’t predict or anticipate and the only way to highlight these issues is with a real test in a real-life environment.
  • You can gain an idea of how well the product will sell. This allows you to extrapolate predictions to the wider market, build more realistic budgets, gain buy-in from other members of the company, and make any changes needed.
  • It helps you determine the most suitable and effective channels for marketing. A small-scale test, as long as it isn’t too small, can give you a solid idea of the marketing channels your target customers respond best to, helping you allocate your resources and effort more wisely when the product launches for real.
  • It helps you identify the best distribution channels and build a data-driven distribution strategy for when the product launches.
  • Any weaknesses or flaws in your strategy will be exposed without any disastrous consequences. This way, you can make any changes and ensure your entire plan is on firmer footing when you launch for real. Failing during a test is far more preferable to failing on a grand scale.
  • You’ll see how customers react to your product, marketing, and other aspects of your brand in real-life scenarios. This gives you real data to work with as opposed to theoretical predictions and second-hand knowledge based on trends.
  • You’ll get a heads-up if your product is going to fail. Sometimes, despite best efforts, some products simply aren’t meant to be. If your product fails dramatically in your test (due to lack of interest, for example) it may be a sign to cut your losses and move on, avoiding a catastrophe.

The cons of test marketing

Although test marketing can be useful, there are also some major drawbacks. Anyone planning to carry out test marketing should make sure they are aware of these potential cons before they begin.

  • It’s expensive. Doing test marketing right involves a large-scale project which measures multiple factors across your business. This means that if you want reliable results from your test marketing, you need to be prepared to invest a lot of money.
  • It’s time-consuming. Again, test marketing is a big project with many different layers. It takes time to set up your test, and you’ll need to run it for a while before you get reliable results. This can delay your product launch, cause frustration among the members of your project team and cost money.
  • Test marketing can reveal your game plan to competitors. In a test-marketing project, you are revealing not just your product but also multiple crucial aspects of your marketing strategy in the real world. It’s very easy for competitors to view this and simply copy it with their own product before you even get close to launching.
  • The results can be misleading. With test marketing, there is a lot you need to get just right to yield useful results. If your sample size is too small and narrow, you’ll end up with a one-dimensional view of your market which doesn’t reflect reality. The channels you use to market your product and collect data might exclude certain demographics, too.
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Test marketing vs concept testing: which is best for me?

Test marketing and concept testing share many things in common, but they aren’t interchangeable. In this section, we’ll break down the similarities and differences between the two and help you work out which one is best for your situation.

The similarities

  • Both test marketing and concept testing are designed to learn about your product before doing a full launch.
  • Both can be effective ways to reduce the risk of failure, gain valuable insights about your product, and make necessary changes before a full launch.
  • Both require you to plan carefully in advance and make sure everything is set up right to get the most accurate and reliable results.

The differences

Despite their similarities, concept testing and test marketing are two very different processes. Let’s take a look at the things that separate them:

  • Concept testing is much easier to carry out. You can complete a solid concept test in a relatively short amount of time, and gain valuable insights from this.
  • Concept testing is more affordable. Concept tests can be done for a fraction of the cost of test marketing.
  • Test marketing involves launching a product in the market, even if it’s at a small-scale. As a result, it’s not suitable for early stage testing, where concept testing can play an important role.  
  • Linked to this, concept testing can allow you to test ideas securely before launch. In contrast with test marketing your products are put into the market meaning that there is a risk of competitors getting hold of your ideas.
  • Test marketing is wider in scope as it takes a broader view of the entire marketing and sales process. It measures many different factors such as advertising effectiveness which can’t be evaluated in concept testing.

Which one should I use?

Whether you opt for concept testing or test marketing depends on your goals, the resources you have available, your product, where you are in the development process and your timeline, among other factors.

Concept testing is much easier and more cost effective to do than test marketing and can yield reliable results at speed. With concept testing, it’s not hard to get reliable feedback on your product and clear direction to inform actionable changes. This allows you to make meaningful improvements to your product and launch much more confidently.

Give yourself the best chance

Concept testing allows you to launch your product with the best possible chance of success. Instead of operating in the dark, guided only by guesswork and opinions, you can lean on real feedback from real customers.


At Kadence, we can help you with concept testing, ensuring your product goes to market with a strong chance of success. To find out how, request a proposal today or get in touch with your local Kadence team to discuss your options.

Concept testing is a crucial stage when developing new products. Before you launch a new product in the market, it’s important to gain a solid overall idea of how your customers will respond and how the product will perform.

This helps you avoid costly errors and nasty surprises, better understand your market, and make a more confident and successful product launch. In this article, we’ll show you how concept testing works and how to do it. Let’s start with a more in-depth definition.

What is concept development?

A concept is the precursor to every great product. It’s a detailed outline of what you’re going to produce, who it’s for, the problems it will solve, how it will work, how much it will cost, and much more.

To make sure your concept is ready to go to market, it’s essential to test it properly with real customers. This process is called concept testing, and in the rest of the article, we’re going to talk about why this is so important and how to do it methodically.

The benefits of concept testing

Concept testing is the process of testing your concept before launch, so you can confidently put it into the market with a fairly good understanding of how your customers feel and how they will respond.

There are several different methods spanning both qualitative and quantitative approaches (which we’ll dive into shortly) but they all involve presenting concepts to consumers and then getting their feedback about different attributes. 

(Check out our detailed guide to concept testing for more information.)

There are multiple reasons to do concept testing, such as:

  • You get real feedback from users. Designers and product teams are often too close to the product to make clear-headed decisions about it, and they might overlook some crucial things. Concept testing allows you to access real feedback from your target customers, which you simply can’t replicate with your own internal team.
  • It helps you notice flaws. Pretty much no concept has ever been perfect. Testing your product with real users helps you notice problems that flew under the radar in the design phase, giving you many new pairs of eyes.
  • It allows you to refine your concept. Before testing, your product is just a rough prototype that has all the major pieces in place but probably needs some extra work. By shedding light on what consumers think, testing gives you some direction for how to refine and improve your product so that it’s more likely to gain traction when it hits the shelves.

The importance of concept testing

The above benefits are important for many reasons. Here are some of the reasons why you should consider concept testing in new product development:

  • It’s easier to get backing for your product. Testing gives you concrete data about how customers feel about products. You can then use this to make a compelling case to others in the organization about why you are making certain decisions. Without this data, it’s just a matter of personal opinion and it will be much harder to convince others.
  • It helps you find out what your customers like the most about the product. This is useful not just for that specific product and how to market it, but also allows you to make better decisions going forward by focusing on the things that people like most and targeting popular pain points with different products.
  • Testing can help you segment your customer base. Who should you target with your product? If certain demographics love the product and others are less enthusiastic, this is extremely helpful when it comes to focusing your marketing and distribution efforts.
  • It helps you estimate how many sales you’ll make and the ROI you’ll generate with the product when it goes to market. This is helpful when it comes to setting budgets, making plans, and getting financial backing from others in your company.

It allows you to identify a reasonable price point. It’s common to ask users during testing how much they would expect to pay for a product. This helps inform your decision for how much your product will sell for.

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How to test concepts: the qualitative and quantitative methodologies

Concepts can be tested quantitatively or qualitatively. Qualitative methods for concept testing include focus groups, online communities or in-depth interviews that allow you to uncover rich qualitative feedback from current or prospective customers relating to your planned product. Ethnography or self-ethnography are other alternatives, particularly if the concept you’re testing is worked up and in prototype form that consumers can interact with at home.

The main quantitative method used for testing concepts is an online quantitative survey, an approach that allows you to test at scale. 

Different approaches for testing concepts 

There are four main approaches for concept testing a new product, and each one has its own pros and cons. It’s best to consider your specific situation and product and then pick one which works best.

Monadic testing

This is where the audience is divided into groups, and each group is given one concept in isolation and asked to evaluate it via a series of questions.

For example, they might be asked to rate the design, evaluate the price or feedback on the packaging.

The pros of monadic testing are:

  • There is less room for order bias since the concepts are shown and evaluated in isolation
  • It’s easier for users — they only have one product to focus on and all the questions apply to that same product
  • It encourages deeper feedback as users take a deep dive into one concept as opposed to skimming over several different ones

On the other hand, the main drawback to monadic testing is that it requires a larger sample size to get enough reliable data. This means it can be costly to gather all the necessary participants, and challenging to find enough people to assess niche concepts.

Sequential monadic

In sequential monadic testing, multiple concepts are evaluated one after the other. Each participant sees two or more concepts, presented in a random order, and answers questions about each one in turn.

The main benefit is that fewer people are needed, so this results in:

  • Being cheaper to gather enough people and set up the testing
  • Taking less time to gather a sufficient amount of data
  • It also works well with niche markets where there might not be many potential customers

The main downside is that it takes longer to carry out each individual test since participants are evaluating multiple concepts instead of just one.

Comparative

In comparative testing, concepts are shown next to each other, and participants evaluate all of them at the same time. It’s an effective way to find out how one concept compares directly against another in the eyes of your customers.

The main advantage of comparative testing is that it’s good for measuring small differences and drilling down into the specific advantages and drawbacks of each product. The main downside is that its comparative nature means that it’s not very effective when both products are flawed. 

Comparative testing is often used as a follow-up for monadic testing to gain deeper insights into a specific product.

Proto monadic 

This is a blend of monadic and comparative testing. Customers evaluate a product via monadic testing and then are shown the same product in comparison with another.

It’s done to confirm the initial monadic results to gain a more sturdy overall conclusion about a product’s strengths and weaknesses.

What to measure

Once you have settled on a method of testing, it’s time to consider what you want to measure. There’s a long list of possible factors to analyze with concept testing, and these might vary based on your chosen method.

Here are some common examples of things to measure:

  • Overall reaction to the product – this measures how customers feel about the product overall, and can be measured with a likert scale (a series of options from “strongly agree” to “strongly disagree”).
  • Reaction to different elements of the product – you can also use the likert scale to rate certain aspects of the product, for example the packaging, ease of use, battery life, and more.
  • Need for the product compared to the current market – how much of a demand does your participant think there is for the product? Is there an urgent need for it, or is the market already saturated with similar products?
  • Comparison with other products on the market – similar to the above, how does your product compare with what’s already out there. Is it a significant improvement on what exists, worse, or just more of the same?
  • Likes and dislikes – what are the individual things people like and dislike about the product?
  • Purchase likelihood – this is where you ask your respondents to rate their likelihood of buying your product. You can use a likert scale for this (“very unlikely” to “very likely”).
  • Pricing analysis – how much would your participants be willing to pay for the product?
  • Likelihood of use– how much of a need does your participant personally have for the product, and what kind of role would it play in their lives?

(Check out this article for examples of how to test new product concepts.)

Testing your concepts is crucial if you want to release the best possible products to your target market, market them effectively, delight your customers, and see your revenue soar.

How can we help?

It’s important to do concept testing properly so your new products have the best chance of success when they eventually hit the market. To find out how Kadence can help you deliver this, request a proposal or get in touch with the Kadence team here.

In discussing market research and new product development, a famous story often comes up about Steve Jobs dismissing consumer market research as a tool for shaping new Apple products. The driving force behind the Mac, the iPod, and the iPhone famously said in a 1985 Playboy interview, “We were the group of people who were going to judge whether it was great or not. We weren’t going to go out and do market research.”

It is, of course, one of the most widely debunked stories in business. Apple does conduct consumer market research – and is, arguably, in its pre-eminent position precisely because it innovates using insights generated by analyzing in incredible detail its consumers’ behaviors and the market appetite for its products. (There’s video of a young Jobs extolling the virtues of market research for these purposes – it’s 90 seconds well spent.)

In the world of new product development, market research often reveals that most new offerings are iterations of existing products. For every genre-busting innovation, there are tens of thousands of new iterations of existing ideas, tweaks to brands, and updates to proven sellers. In most cases, some kind of market research will have shaped the new iteration and how it was conceptualized; helped stand up the business case for it; framed the marketing; and guided its introduction to consumers. So how does market research help businesses design and launch successful new products?

Integrating Market Research in New Product Development: Each Stage of the Innovation Funnel

There are lots of different ways to describe the innovation process, broadly broken down into three phases: ideas, concepts and creation. It’s not a science with a standard formula, however, but there are some common steps.  For example, some experts recommend breaking the process into 5Cs:

  • Capture intelligence about market gaps and organizational potential.
  • Connect opportunities to capabilities.
  • Convert ideas and available resources into concepts for products.
  • Confirm these products are viable in the market.
  • Conclude by executing a market entry plan for them.

Another way of thinking about it is a series of questions that need to be asked at each stage of the product development process. Market research can help answer them all.

1: What’s the opportunity?

Desk research, analysis of existing customer data and some qualitative investigation can help frame likely areas for innovation. In many cases, an organization will face an internal problem – overcapacity, falling margins, consumer appetites shifting away from existing products – that also frame the need for new products. The output here is an extrapolation of big trends to identify emerging needs, changing behaviors and whitespace for innovation.

2: What ideas might thrive there?

In some organizations, internal R&D will have a ready supply of potential innovations that might be applied to the opportunity. More likely, R&D and marketing teams will benefit from a brief developed from the ‘opportunity’ phase to direct R&D in more concrete areas. This process might include brainstorming inside the organization or more formal ideation sessions with an external research agency. At this point surveys can be harnessed to give more shape to the ideation process. In the search for an iterative new product (rather than a genuine technological innovation) there might be 30 broad ideas that can be tested in quantitative surveys to thin down the field.

3: What concepts deliver on those ideas?

In the next stage, focus groups and market analysis can clarify which concepts ought to progress further by exploring the strengths and weaknesses of each idea. This is also where the innovation and R&D efforts of the business are properly moulded around consumer and market insights – and some iteration takes place to align the two. Note that research here isn’t just among consumers in the core market. Channel partners, consumers and suppliers in adjacent industries are all valuable sources of insight and inspiration. For example, when Kadence worked with an airline to develop new first and business class seats, we looked to bedding experts, audiophiles and high-end restaurant maîtres d’hôtel to shape the concepts.

4: How might those concepts perform in the market?

By this point, an organization should have narrowed its ideas down to a small number of solid concepts. At this stage, a large-scale quantitative survey can be used to identify the concept with most potential to take forward, as well as the size of the potential customer base.

5: What’s the investment case for launch?

The insights gained from market and concept testing will allow numbers to be attached to the product at this point. What might revenues be? What’s the cost to produce the product or service? With research around pricing, what’s the margin likely to be? Does this justify retooling a factory or investment in marketing? This is the “go/no go” point for a new product.

6: What should the final product look like?

Using the research on market potential and consumer attitudes to the new idea, a business can shape decisions on final feature set, ancillary products or services (again, both quant and qual market research will illustrate the need or potential for these), packaging, marketing and pricing.

7: How do we get it out to market?

Research can also highlight optimum product launch strategies, including distribution, adverting and partnerships to make the most of both existing markets and potential follow-ons – whether that’s mass-market adoption for a product designed initially for a niche or early adopters; new demographic segments; or launch into different international markets.

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The known unknowns for new products

There are broadly two types of business keen to answer these questions. First there’s the radical innovators, the people who come up with brand new ideas and product concepts and want to understand whether they stand a chance in the market. This group are interested in ‘unknown unknowns’, the broader trends in consumer behavior that might hint at acceptance of a brand new idea. We’ll come on to these Steve Jobs types later.

The second, much larger, group understands the innovation funnel in more detail and seeks data to optimize a pipeline of new products. They are interested in ‘known unknowns’ and using the answers to justify, shape and execute a launch.

For this group, the challenge is modelling the potential performance of a new product against a number of variables already visible in the market. These organizations often have a sophisticated process in place to test new ideas and are keen to benchmark any new product in order to validate investment. They will have an algorithm for product development. The more variables they can pin down using market research, the higher the confidence in making those investments.

‘Benchmarking’ in this case might be looking at the performance of products within the target market; or evaluating consumer attitudes to particular features or benefits. This makes it a largely quantitative methodology.

This kind of quantitative approach is often applied with good reason. Standardized questionnaires and clear, consistent methodologies can help ensure that the market research process is more reliable and easier to interpret. And for many larger organizations with a wide portfolio of potential innovations, a fixed investment budget and the need for reliable returns, this rigour can be highly valuable.

But beyond simply looking at the “go / no go” result, it’s important to dig into the reasons why products didn’t pass this hurdle. This can provide valuable insights to inform future development.

Competitor analysis can also reveal opportunities for developing successful product iterations. Research might include:

  • Rivals’ marketing strategies – what’s their targeting and messaging; what are they missing?
  • Customer satisfaction with competitor products– where are there discontents that might be satisfied by your product?
  • Other gaps in the market – such as different price points or localized versions for international consumers.
  • Other competitor strengths and weaknesses – consider brand halo effects or financial status.
  • Early-adopter behaviors – in similar markets or using new technologies that might be adapted to your own target markets.

Learning from History: New Coke as a Case Study in New Product Development Market Research

But it’s not always done right. There’s no shortage of case studies of new product launches that didn’t go well. And often that’s not because an organization didn’t do any market research. It’s because they didn’t use it deftly enough.

New Coke is a great example. Coca Cola is an innovative business and wields one of the greatest brands in history. In the 1980s, management decided to rebuild its dominant position with a new formula. Clearly this was a huge decision, and as a market research powerhouse, it took no risks. It spent $4m on development and conducted over 200,000 taste tests across the US to research how consumers would score the new flavor against rival Pepsi. And based on those tests, New Coke was going to be a hit.

But management made a series of errors. In a classic case of confirmation bias, they tended to put more weight behind positive views expressed in focus groups, ignoring those who warned a change would turn them off the brand. They discounted emotional feedback on their brand. And they over-focused on differentiation with Pepsi, which had long marketed itself as the sweeter product.

One big mistake was conducting sip tests instead of researching how consumers would feel drinking a whole can of the sweeter formulation. But narrowing down their research focus – ignoring the context for consumption – they ended up launching a product that turned consumers off the brand altogether.

The error, then, was not failure to conduct market research. It was failure to treat research objectively and apply appropriate methodologies. Management sought justification for their decision – not confidence that it was the right one.

The impact of market research on new product development – giving you the confidence to guide a product launch

The key word here is ‘confidence’. Even iterating an existing product entails risks. Using market research for product development helps reveal and manage that risk – and allows decision-makers to test rigorously against hypotheses for new products, rather than head off down potentially blind alleys.

Note that qualitative research plays a crucial role in helping product developers fine-tune their approach and create innovations more suited to particular audiences. And as the New Coke example shows, qual research can capture the emotional components of product change much better than quantitative analysis might. Every new product launch is a balance between gains and losses for the consumer and understanding that balance is vital.

When it comes to qualitative research, organizations shouldn’t just ask themselves whether to conduct it, but how to conduct it. Whilst central location testing for instance, allows you to ensure the product is experienced in a consistent way during the testing process  pandemic lockdowns have obviously accelerated this shift towards at-home testing. New technologies are helping. Augmented reality (AR), for example, is an ideal way to help consumers visualize new products even at the concept stage. Using their mobile phones, they can ‘see’ products in their own home or a work setting, providing valuable depth to qualitative studies at even earlier stages. This is something we’ve piloted with Asahi to test their London Pride packaging and are seeing a number of benefits, such as respondents using AR organically noticing and commenting on small visual details that aren’t picked up by other respondents assessing a 2D concept.

Using market research to guide blue-sky thinking

Our market research for new product development includes testing against quantitative benchmarks to validate each phase of product innovation. Additionally, our qualitative studies in new product development market research focus on testing the emotional reaction to new products, shaping their evolution for market success. A third aspect of market research in new product development is ideation – generating new ideas at the outset.

This is often called ‘ideation’ and it’s an area where market research has played a key role since the birth of the industry – regardless of what Steve Jobs said. He was right that consumers are typically quite poor at predicting what might define or satisfy meet their own future needs. But understanding how R&D and human appetites come together is core to the market research offering.

Take a dairy business, as an example, that’s facing a slow decline in consumption. One solution would be to increase the appeal of organic products. How might they craft a brief to their own product development team?

Working with Kadence, the company use a structured approach to frame where this innovation might gain some traction in the market. Using proven research techniques, they also explored possible options for further innovation. These can be tweaked and repositioned using further research.

This approach can be further optimized if like us, the research agency has an in-house creative team that can quickly visualize concepts based on consumer feedback. We worked with a global beverage brands wanting to relaunch its range to make this happen. Based on focus groups, we were able to redesign the packaging in a matter of hours in a way that capitalized on insights from the research.  

One other process to consider: the ideation sprint. Rather than gradually piecing together some R&D, market analysis and internal feedback before gradually building out a new product for consumer testing, this involves getting all the stakeholders into a project group together to develop new ideas within a short timeframe.

Kadence has conducted these sprints with food manufacturers – where that combination of chefs, technicians, marketing experts, salespeople and researchers working in concentrated bursts over a couple of days can see a menu of ideas created,  tested with consumers and refined incredibly quickly. And because these sprints are cross-departmental, buy-in for the new product internally is much greater.

Concluding thoughts

Product development is risky even when you’re not launching a category-busting innovation or changing the world. New flavors, revived branding, tweaked feature-sets or version updates can upset existing product performance or result in costly investment in ideas that might not fly.

Far from stifling product development, market research can deliver reassurance and confidence at every stage, helping inform the choice of new products to pursue, their key attributes, how they might be marketed and what contribution they make to a business operationally and financially.

This is an area where Kadence has extensive expertise. Find out more about our product development research services or contact us to discuss how our market research can optimize your new product development brief.