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PCSC2: Primary Research Strategies: How to Build a Million Dollar Business

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Kevin Gentry, PhD and Rebekah Paul's presentation from ProductCamp SoCal. Held November 6, 2010 at Cal State Fullerton - The Mihaylo College of Business & Economics.

Kevin Gentry, PhD and Rebekah Paul's presentation from ProductCamp SoCal. Held November 6, 2010 at Cal State Fullerton - The Mihaylo College of Business & Economics.

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PCSC2: Primary Research Strategies: How to Build a Million Dollar Business PCSC2: Primary Research Strategies: How to Build a Million Dollar Business Presentation Transcript

  • November 2010
    How to Build a Million Dollar Business
  • Introducing…
    20+ years experience
    Previously in senior positions at
    Quaker Oats
    Information Resources
    Grey Advertising
    Holds a Master of Arts and a doctorate (Social Psychology) from USC
    Has taught courses at USC, Santa Monica College, and West Los Angeles College
    Kevin Gentry, Ph.D.Group Vice President
  • Introducing…
    16+ years of sales, marketing, and business development experience
    Oversees introduction of C.A. Walker to potential customers
    Previously worked for a research firm and a branding company in business development
    Holds a B.S. degree in Business Administration, Marketing emphasis from CSUN
    Rebekah PaulBusiness Development Mgr
  • Who We Are
    • In business since 1972
    • Privately Held and Employee Owned
    • Mid-Sized Firm
    • Fully Integrated Data Processing and Programming
  • Current Client List
  • Market Research Strategic Issues
    Sampling
    • Representative to populations
    • U.S. Census-based demographics
    • eRewards and eSearch
    Interview Length
    • Minimum: 5 minutes
    • Maximum: 25 minutes
    • Average: 10 - 15 minutes
    Incentives
    • Paid to each participant, not sweepstakes
    • Panels include in the cost
    • May add to it (typically $100 - $150) if narrow target, e.g. physicians, requesting sensitive information, etc.
  • FAIL
    Not developing your products along with the customer, knowing what their pain points are and what problem you’re solving
    Making critical business decisions when too close to the situation, when views and experiences are too narrow, lacking perspective and objectivity
    Getting all wrapped up in building a product but never pausing to find out if there will be demand for it
    Not taking part of the budget to do the research necessary to validate the market: size of the market, how fast it’s growing and competitor activity
    Not interviewing at least 100 people in your target market to talk about what they’d like to see in a product
    Source: BNET.com
  • Market Research Strategies
    Testing new products at concept or pre-production stage
    Measuring demand for new products, estimating market size/sales volume
    Understanding prospects: demographics, how they make purchase decisions
    Determining product feature/price trade-offs
  • Case Study – Testing New Product Concepts
    A Manufacturer of nutritionally enhanced products wanted to measure reactions of vegetarians to two different forms of a particular vitamin (“1” and “2”) added to a product line.
    • Online survey among vegetarian publication subscribers responding to an email blast
    • Males and females
    • 3,287 responded and 1,057 passed the screeners
    • Must have used the product line in the past year
  • Case Study – Testing New Product Concepts
    Measures include:
    • Likelihood to purchase
    • Product line by itself
    • Product line with vitamin no form (e.g. B)
    • Product line with vitamin form 1 added (e.g. B2)
    • Product line with vitamin form 2 added (e.g. B12)
    • Awareness of derivation of forms 1 and 2
    • Preference of vitamins based on derivation
  • Case Study – Testing New Product Concepts
    Positive purchase interest of the product line with added vitamin goes down among all vegetarians as information is provided about vitamin formulation and derivation
    Total (N=1,057)
  • Case Study – Measuring Demand for New Products, Estimating Market Size/Sales Volume
    As part of an ongoing program, a Film Studio wanted to measure demand for the DVD release of one of their Family film titles, estimate market size, and project sales using a proprietary norms database that we developed.
    • Online interviews of nearly 5,000 DVD households
    • 90% Adults 18-54
    • 10% Kids/Teens 8-17
    • 1+ DVDs purchased in past 6 months
  • Case Study – Measuring Demand for New Products, Estimating Market Size/Sales Volume
    Measures include:
    • Film awareness
    • Film ratings among those who saw it
    • DVD purchase intent
    • Preference for single-disk or double- disk version and at what cost
    • First-month purchase urgency
    • First-pick among competitive titles
    • Sales volume forecast
  • Case Study – Measuring Demand for New Products, Estimating Market Size/Sales Volume
    The title had broad appeal, awareness and viewership among both parents and non-parents, with “Excellent/Very Good” ratings:
    • Parents with 6-14 year olds are the core target
    • Purchase intent was strong and above average compared to Family film norms database
    Sales volume forecast for the title (at $19.99):
    Aggressive estimate* 6.5mm units
    Moderate estimate 5.7mm units
    Conservative estimate* 4.8mm units
    *Forecast within +/-15% of actual DVD sales, supporting accurate adjustment of marketing and advertising expenditures for home video sales
  • Case Study – Understanding Prospects/Purchase Decisions
    A Health Insurance Company wanted to understand how and why its California customers are choosing their purchase channel (Agent vs. Direct vs. Internet), how committed they are to that channel, and what their key individual health plan purchase criteria are.
    • Primary or co-decision maker
    • Between 18-55 years of age
    • 281 telephone interviews with recent
    purchasers/members from their database
    • 37% applied through an Agent
    • 38% applied Direct
    • 25% applied through the Internet
  • Case Study – Understanding Prospects/Purchase Decisions
    Measures include:
    • Did they contact an Agent at all
    • Why or why not
    • If yes, how did they find him or her
    • If yes, to what degree did they rely on the Agent when making a decision
    • Did they contact Direct at all
    • Why or why not
    • Did they contact via Internet at all
    • Why or why not
  • Case Study – Understanding Prospects/Purchase Decisions
    When purchasers/members made a decision, they were most focused on (top 5, in order of importance):
    • Best benefits for the price
    • Good pharmacy benefit
    • Choice of plans to fit budget
    • Choice of amount of coverage
    • Good customer service
    Choice of which channel to use is largely
    dependent upon the purchaser’s perception of which is most convenient, how self-reliant the purchaser is, and whether or not the purchaser personally knows or has been referred to an agent
  • Case Study – Feature/Price Trade-off
    13 variables including:
    Durability
    Materials
    Design
    Price
    Style
    Size
    Determine the trade-off between features and price in purchase decisions for a specific office product line
    Discrete Choice Modeling used to value product variables’ price premiums
    601 online surveys
    Office Supply Decision Makers
    80% purchased <= 50 of these products in the past 6 mos
    7 Products with differing combinations of the 13 variables
  • Case Study – Feature/Price Trade-off
    Most important features for purchase intent
    Recycled materials not yet a key purchase consideration
  • Case Study – Feature/Price Trade-off
    Incremental Share Achieved by Maximum Upgrade
    Value Increase From baseline
    From baseline product
  • ~ FIN~