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.

1. How to Build a Million Dollar Business
November 2010

2. 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

3. 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 Paul
Business Development Mgr

4. Who We Are
• In business since 1972
• Privately Held and
Employee Owned
• Mid-Sized Firm
• Fully Integrated Data
Processing and Programming

5. Current Client List

6. 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.

7. 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

8. 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
Market Research Strategies

9. 9
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

10. 10
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

11. 11
Case Study – Testing New Product Concepts
65%
58%
50% 49%
23%
16%
0%
10%
20%
30%
40%
50%
60%
70%
Product line
by itself
No form Form 1 Form 2 Form 1 +
derivation
Form 2 +
derivation
3-
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)

12. 12
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

13. 13
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

14. 14
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

15. 15
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

16. 16
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

17. 17
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

18. Case Study – Feature/Price Trade-off
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
13 variables including:
Durability
Materials
Design
Price
Style
Size
7 Products
with differing
combinations
of the 13
variables

19. Case Study – Feature/Price Trade-off
0% 20% 40% 60% 80% 100%
Design Element 10
Design Element 9
RecycledMaterials
Design Element 7
Design Element 6
Design Element 5
Design Element 4
Design Element 3
Design Element 2
Design Element 1
Durability
Size
Price
1%
1%
3%
4%
4%
4%
5%
6%
9%
10%
11%
12%
20%
Most important features
for purchase intent
Recycled materials not yet a
key purchase consideration

20. Case Study – Feature/Price Trade-off
$0.00
$1.00
$2.00
$3.00
$4.00
$5.00
$6.00
$3.05
$1.24
$3.33
$3.69
$4.17
$5.41 $5.01
$5.31
$5.46
Upgrade 4
Upgrade 3
Upgrade 2
Upgrade 1
+13.8 +23 +18.5 +17.2
Incremental Share Achieved by Maximum Upgrade
From baseline product
ValueIncreaseFrombaseline

21. ~ FIN ~