MODULE 4: Developing new products and managing the

product life cycle

6.2 PRODUCT RESEARCH

Ansoff Matrix - framework for determining growth strategies, and moving into the
processes for developing new products.

The Ansoff Matrix categorizes strategies based on whether a company is dealing with
new or existing products and markets, leading to 4 types of growth strategies:

1. Market Penetration - grow market share in existing markets (pricing,

advertising)

2. Market Development - expand existing products into new markets

3. Product Development - create new products for existing markets

4. Diversification - launch new products in new markets (most risky)

Companies localise their strategies based on market needs and regulations

Challenges:

• Adapting to regulatory complexities (tax systems in different countries)

• Understanding cultural nuances while maintaining global scalability

Product Development Lifecycle

Product development follows a structured, iterative approach (Figure 6.2):

1. Discover (Divergence) - Idea generation through understanding trends and

consumer needs

2. Define (Convergence) - Concept development based on market and

competitive insights

3. Develop (Divergence) - Manufacturing or digital production

4. Deliver (Convergence) - Product launch and monitoring success through
customer feedback and iteration

Modern Approaches - companies rely on futurecasting (trend analysis to predict

future needs) before ideation to ensure products are relevant and future-proof.

New Product Development Process

Phases in the New Product Development Process
 1. Identify Motivational Conditions (Needs & Wants) - what customers desire
and why
- How can I identify & size opportunities?
- What are their needs when it comes to the category?
- What are the usage & purchase habits (6W, Customer Journey)?
- What are the opportunities in my category?

2. Idea Generation - explore creative ideas based on trends and market insights
- Which ideas have the biggest potential?
- What is the internal feasibility of the company to introduce the idea?
3. Concept Development - develop concepts into viable solutions.
4. Concept Evaluation - assess the feasibility and alignment of concepts with
market needs.

5. Forecasting - predict potential success using market research and data.

For 3,4,6 :
- Does my product experience compare to key competitors?
- How to optimise the recipe of my product?
- How to optimise packaging & claims?
- What is the acceptable price for my product?
- What stops people from my product, using my service?
- How unique & relevant is my concept vs my current offer & competitors?
- What is the purchase intent of the new idea?
- How do I create & evaluate concepts?

Key Takeaways

1. Frameworks like the Ansoff Matrix help companies choose the best growth
strategies, whether focusing on existing or new markets/products.
2. Localization plays a crucial role in scaling globally while addressing cultural
and regulatory differences.
3. The Product Development Lifecycle and the New Product Development
Process provide a roadmap for creating and launching successful products.
4. Continuous market research and customer feedback are essential for refining
products and ensuring long-term success.

Uncovering Customer Needs and Wants

The 1 step in the new product development process - discovery phase in the NPD
process, heavily relies on QUAL research techniques

This phase, known as discovery, aims to uncover opportunities for innovation and
define the target market

Key Steps and Concepts

1. Divergent and Convergent Thinking

- Divergent Thinking -Broad exploration of all potential pain points within the
target audience
- Convergent Thinking - Narrowing focus to one or two high-potential
opportunities

2. Understanding Motivational Conditions

Motivations arise from:

- Problem-solving or prevention - people act to solve a problem or prevent a
potential issue
- Sensory opportunities - people act to seek pleasure, enjoyment, or sensory
satisfaction.

3. Research Techniques
- Qualitative Methods - focus groups, in-depth interviews, online communities, and
user-generated content provide insights into motivations and unmet needs

Stakeholders involved on the client side

- Product manager
- Product development (engineering)
- Product Design (UX)
- Marketing
- Operations (how to distribute the produce the product)
- Sales

Frameworks

A. Means-End Chain Framework - links product attributes to benefits and

ultimate values through iterative “whyˮ questioning

B. Outcome-Driven Innovation Approach - focuses on the "jobs" a product

performs for a consumer. Combines:
- Qualitative Identification: lists all possible jobs a product category might fulfil
- Quantitative Analysis: asesses how important each job is and how satisfied
consumers are with existing solutions.
Outcome-Driven Innovation Example
- Consumers evaluate products based on how well they perform key “jobs”. High-
priority jobs that current products fail to perform effectively highlight areas for
innovation

This structured approach helps businesses pinpoint unmet needs and develop
products that offer greater value, addressing critical consumer motivations and gaps
in the market

The Laddering Approach- explores relationships between attributes, benefits, and

values (qualitative techqniue)
 Idea and Concept
Generation
The process of generating new product ideas or concepts involves various sources
and methods, both internal (brainstorming with employees) and external (market
research)

Ideas can come from qualitative and quantitative research, customer insights, and
trends.

The goal - develop initial concepts that address consumer needs and trends, refining
them through structured frameworks and analysis.

Qualitative Methods
- Focus Groups - gather consumer insights through group discussions
- Ethnography - immersive observation of consumers in their environments to
identify unmet needs
- Online Pop-Up Communities - virtual forums where participants interact and
provide feedback over weeks or months
- Social Listening - scraping and analyzing online consumer conversations (forums,
blogs, social media)

Quantitative Methods
- Usage and Attitudes (U&A) Surveys - analyze consumer behaviors and
perceptions
- Segmentation Surveys - identify and categorize distinct consumer groups for
targeted strategies
Brainstorming and Idea Refinement
- Divergent Thinking - broad ideation to explore all possible solutions to consumer
problems
- Convergent Thinking - narrowing down to high-potential ideas for further testing
- Double Diamond Approach - alternates between divergence and convergence to
refine ideas into actionable concepts

Key Steps for Social Listening

1. Define the business challenge or audience

2. Identify relevant data sources (social media, blogs)

3. Use analytics to extract insights (sentiment, trends)

4. Analyze audience language and feedback

5. Translate insights into actionable strategies

6. Revisit conversations to track changes over time

This process ensures businesses can identify trends, understand consumer needs, and
develop innovative solutions effectively.

Initial Idea and Concept Screening

Once pain points and unmet needs are identified, the next step - screening initial
ideas and concepts to determine which products, features, or brand promises best
address these needs. Key steps in this phase include:
1. Developing Product Specifications
- Use identified needs and pain points to create a product spec
- Develop features and benefits aligned with these needs
- Include prototypes or mock-ups of a Minimum Viable Product (MVP)to
visualize the solution

2. Idea Reduction - large number of ideas (often over 100) is narrowed down to a
manageable set

3. Consumer Evaluation - consumers evaluate concepts based on criteria such as:

• Likelihood to purchase—Uniqueness—Believability
Concepts are presented factually, avoiding persuasive marketing language to ensure
objective feedback.
 Concept Development
After the initial reduction phase, surviving concepts are further refined and described
in greater detail.

Key aspects include:

1. Detail of Concept Descriptions - level of detail varies (some including objective

product information and comparisons to competitors); straight forward product
description

2. Methods for Testing - focus Groups (FGs) or Individual Depth Interviews (IDIs)
are preferred
- Smaller sets of ideas may allow for more elaborate descriptions
3. Structure of Concept Descriptions - concept statements typically include:
- Title - name for the concept
- Insight - brief description of the consumer insight driving the concept
- Benefits - key functional and emotional benefits
- Visuals - picture, drawing, or sketch
4. Simplified Alternatives:

For quick evaluations, "Tweetable" concepts (200 characters or fewer) summarise

the title and key benefit, suitable for mobile surveys.
Concepts are presented succinctly to allow for scoring and comparison, enabling the
identification of the most promising ideas.

Concept Evaluation and Test

This phase involves seeking feedback on product concepts or prototypes from larger
samples.

Feedback can be gathered through basic verbal descriptions, visual mockups, or

persuasive representations. There are two types of methodologies that can be applied.

Monadic Design: each respondent evaluates 1 concept (800 respondents split evenly
among four concepts). Respondents rate factors like purchase likelihood, relevance,
uniqueness, and promise delivery.
Competitive Design: uses conjoint analysis - evaluate new concepts against existing
alternatives, including factors like brand and price, to predict consumer choices.
• Methodology
Respondents are presented with multiple options, including the new product,
existing competitors, and variables like price and brand
- Allows researchers to estimate the likelihood of consumers choosing the new
product over existing alternatives

• Advantages
- Accounts for competitive dynamics by incorporating real-world factors
- Provides insights into consumer trade-offs and preferences
- Enables evaluation of multiple attributes (features, pricing) simultaneously
• Limitations
- Requires significant setup and expertise to design and analyze conjoint studies
- Focuses on average consumer preferences, which may overlook niche or
segmented markets

• Applications
- Particularly useful for product launches in competitive markets.
- Helps in pricing decisions, feature prioritisation, and understanding brand
influence.

Forecasting

• Purpose - predicts the market success of a concept if launched.

Concept tests alone may not always accurately forecast real-world outcomes

• Insights Provided
- Sales Projections - estimates in-market sales for new concepts
- Source of Sales - determines if sales will come from new customers, existing
customers, or cannibalize current products

• Key Metrics
- % of target market likely to try the product
- Re-purchase rates and long-term adoption trends
Applications
- Guides decision-making on whether to move forward with a product concept
- Helps companies strategise for launch and market positioning
Commercial practice

Balancing Speed to Market vs. Rigorous Testing (cоотношение скорости выхода

на рынок и качества Тщательное тестирование)
- Companies face trade-offs between thorough testing and being first to market;
faster launches can reduce testing risks but allow competitors to gain an advantage

B2B Product Development Approaches

- Often limited to qualitative research due to complexity and niche audiences
- Suggests a sell-design-build model over design-build-sell for complex offerings
Market Sizing Analysis: purpose - assess the revenue potential of a product within
defined markets
Key terms
- Total Addressable Market (TAM) - largest possible market size without
competitors
- Serviceable Available Market (SAM) - market size feasible based on distribution
and brand
- Target Market - subset of SAM most likely to purchase.
Approaches to Market Sizing
A. Top-Down Approach
- starts with TAM and reduces it based on assumptions (channels, reach)
- quick but risks overestimating TAM as it ignores scalability
- example questions: how much do people spend on this product yearly
B. Bottom-Up Approach
- focuses on details like customer behavior, purchase intent, and product pricing
- example questions: Whatʼs the price per unit?
Comparison
- Top-Down - quick but may overestimate
- Bottom-Up - more accurate and feasible for scaling
 6.3 Advertising Research
Advertising research is either used to develop the advertising strategy or measure
whether your advertising investments paid off.

1. Before Campaign Launch

- Helps in go/no-go decisions, ad concept selection, and audience targeting
- Includes ad copy testing to refine messaging and creative elements.
2. During/After Campaign
- Measures ad effectiveness and overall campaign impact
The AIDA Model
1. Attention (A) - consumers notice the product or ad (linked to awareness)
2. Interest (I) - consumers consider the product/brand, showing active interest

3. Desire (D)- leads to purchase intent or brand preference

4. Action (A)- actual consumer decisions (purchases)

Consumers can quickly transition between stages (awareness to purchase)

Digital tools accelerate the process but also allow movement back and forth
(purchasing and returning items)
 Marketing Funnel Campaigns
• Top-of-Funnel Campaigns
- Goal - drive awareness; broad targeting and high reach over extended periods.
- Example- linkedIn highlights "lots of jobs" without detailing application processes
• Middle-of-Funnel Campaigns
- Goal - increase interest and consideration
- Focused messaging that educates and informs about benefits.
- Example - in-store displays or educational website content
• Bottom-of-Funnel Campaigns
- Goal - drive direct action (purchases)
- Targeted at consumers already aware of the brand
- Example - ads that encourage trial or purchase of new/existing products
• Full-Funnel Campaigns
- Coordinated efforts to move consumers through all funnel stages
- Common for B2B and complex products requiring education post- awareness
Advertising Strategy Research
A. It starts with reviewing the general research that is available on the audience they
want to reach with the campaign. For example, if you want to develop a
campaign, you may want to find all the relevant research available on IT
professionals (in the markets, read: countries) where you plan this campaign.

B. In this phase we may also use focus groups to get some initial insights from our
audience. A research methodology that has been especially useful in the
development of an advertising strategy is the laddering approach, sometimes
referred to as the means-end chain framework.

Ad Copy Research
Importance of Ad Copy
- Effective messaging is crucial for a successful product launch
- Ads should highlight key phrases and reasons to believe (RTBs) that resonate with
customers and drive purchase intent
Testing Ad Copy and Creative

Message Testing - uses various trade-off techniques to evaluate alternative messages;

often includes competitive comparisons to refine positioning

Creative Testing - multiple creative formats (static, audio, video) are tested across
channels like TV, radio, billboards, and social media
- Neuroscience methods are employed to identify ads with the strongest emotional
and cognitive appeal.

Evaluating Ad Effectiveness
- Cognitive Measures - recognition, recall, persuasiveness, believability, and
memory impact
- Emotional Impact - assessed through advanced methodologies, including eye-
tracking and neuroscience
Testing Methods

• Day-After-Recall
- Ads are broadcast in a specific region during commercial breaks
- Respondents are contacted the next day to measure recall and recognition
- Limitations: lack of control over the adʼs position
• Forced Exposure
- Respondents are shown ads directly and questioned afterward
- Measures include recall, recognition, and persuasiveness
- Eye-tracking can further gauge engagement with specific ad components
Assessing advertising effectiveness
Advertisements can be evaluated based on their cognitive and emotional impact on
consumers

Types of Advertising Copy Tests

Direct Recognition Test

- Respondents are shown a set of ads, including the target ad, and asked which ads
they recognize
- Measures ad effectiveness by the percentage of respondents who correctly identify
the ad
Direct Recall Test
- Respondents are given a general cue ("Do you recall a beer commercial?") to
assess recall
- Results can be complicated by respondents recalling competing ads or partial
information

Indirect Recognition Test

- No direct reference to the ad; respondents are shown brand names and asked to
describe benefits
- Effective for measuring if respondents associate key messages ("organic" and
"healthy") with the brand

Indirect Recall Test

- Respondents provide unaided feedback (describing impressions of a brand)
without ad-specific prompts

Methods for Evaluating Live Campaigns

Control vs. Exposed Experiments - compare groups exposed to ads vs. those
unexposed

A/B Testing - test variations of ads to determine which performs better

Marketing Mix Modeling - analyze the contribution of ads to sales and awareness
metrics

Campaign Tracking Surveys

Surveys conducted before, during, and after a campaign track key metrics such as:
- Brand Awareness - determines if awareness increases over time
- Consideration and Preference - tracks shifts in consumer intent and preference
- Ad Recall and Liking- measures how well respondents remember and react to the
ad

Control VS Exposed Experiments

These experiment are used to assess whether advertising campaigns lead to

measurable improvements ("lift") in metrics such as awareness, familiarity,
consideration, and brand perceptions

Control group - consists of a target audience not exposed to the campaign, while the
exposed group is shown the ads.
Pre- and post-method - measures metrics before and after the campaign to evaluate
effectiveness

Forced exposure - respondents view an ad to assess recognition and creative

effectiveness, identifying issues like self-bias, brand misattribution, and earned media
impact

Marketing MiX Modeling

MMM evaluates the overall effectiveness of a firm's advertising efforts, focusing on

three key purposes:

1. Evaluating ROI - determines if marketing investments generate a positive

return

2. Assessing Spending Levels - identifies if the firm is over-, under-, or optimally

spending
3. Measuring Channel Effectiveness - analyzes ROI across channels like TV,
radio, and online ads

MMM uses time-series data (weekly sales and advertising spend over years) and
regression models to calculate ROI for each channel

Advertising effects:
- Immediate effects - ads drive purchases shortly after being seen
- Lagged effects - ads influence purchases weeks later
- Diminishing returns - additional spending has little impact after a certain point
Complexity: requires years of historical data across multiple campaigns, making it
hard to evaluate individual campaigns or ads.

Benefits
- Identifies overall ad effectiveness
- Highlights the best-performing channels
- Suggests budget reallocations to maximize ROI
Limitations
- Requires extensive historical data
- Struggles to isolate the impact of specific campaigns or creatives