Market Research for New

Product Introduction
Product Validation Research
Potential Available
Market Market

Addressable
/Target
Market
How should we define these in
case of Tru Earth Pizza

Potential Available
Market Market

Addressable
/Target
Market
 Market Demand

Primary Secondary
Market Penetration Index and
Brand Penetration Index
Market Penetration Index and
Brand Penetration Index
Brand Penetration Index

Market Penetration Index

 Market Penetration Index and
Brand Penetration Index
Brand Penetration Index
NEW ENTRANTS TO
CATEGORY
NEW PRODUCTS – SKUS,
VARIANTS, LINE EXTENSIONS RETAIN LOYAL and
if there is overlap between the PERSUADE to SWITCH
current target market and PERSUADE TO CONSUME MORE
proposed new product target EDUCATE ABOUT OTHER USAGES
market, category extensions

NEW ENTRANTS TO Market Penetration Index

CATEGORY
SWITCH
PERSUADE to SWITCH
MARKET FORECASTS
 Market Penetration Index and
Brand Penetration Index
Munna Pack of Brand Penetration Index
NEW ENTRANTS AMUL
TO Butter
CATEGORY 10 Rs Milk Pouch Honey
NEW PRODUCTS Sachets
– SKUS, Condensed Milk
VARIANTS, LINE AMUL cheese, AMUL
EXTENSIONS RETAIN LOYAL and Dairy Whitener
Lite-
if there is overlap Many the
between more… PERSUADE to SWITCH
current target market and PERSUADE TO CONSUME MORE
proposed new product target EDUCATE ABOUT OTHER USAGES
market, category extensions

NEW ENTRANTS TO Market Penetration Index

CATEGORY
SWITCH
PERSUADE to SWITCH
MARKET FORECASTS
Private Labels in Mass
Patanjali Ghee Consumption FMCG
Fertilisers
What about Market Penetration
Index in case of Tru Earth?
Brand Penetration Index

Market Penetration Index

Volume Forecasts
Pre-Launch Product
Validation Model
SIMULATED TEST MARKETS
• Sales Estimates of New Products/New Brands/
New Extensions prior to launch
• Used by Management to decide Go/No Go
decisions
 STMs : Questions Addressed
• What is the brand’s volume potential?
– Trial and Repeat
• What marketing plan elements drive volume, and
how can the plan be improved?
• What are the strengths and weaknesses of the
concept and product?
Pioneer work on STM began in
1960s in business schools and
MR agencies as well across the
developed economies
Designor
Micro (1986)
Test Novaction
Perceptor (1980) Ipsos
BASES (1979) Research (2001)
(1977) Concept Internatio
Assessor Testing nal
(1973) Burke System Kantar to
Sloan Nielsen Novaction TNS
Schools (1998)
(1989)
 Approach to forecast
Purchase Intention Based Preference Share Based
• Likelihood of Purchase • Purchase a product from
on 5point scale given competitive set
• BASES & MICROTEST • DESIGNOR and
ASSESSOR
• BASES included
preference share
approach later.
 BASES : Simulated Test
Marketing
“BASES is a comprehensive, validated sales
estimating system which integrates consumer
response data with manufacturers’ marketing plans to
assess the volumetric potential of concepts and
products prior to introduction.”

BASES = Booz-Allen Sales Estimating System

BASES : Simulated Test
Marketing

Consumer
Response

Distribution Advertising
Plans Plans
 BASES : Simulated Test
Marketing
BASES is a
comprehensive, validated
Consumer
Response sales estimating system
which integrates
consumer response data
with manufacturers’
Distribution Advertising marketing plans to assess
Plans Plans
the volumetric potential
of concepts and products
prior to introduction.”
 A Brief Evolutionary History
• BASES, Burke Marketing Research
– Developed by Dr. Lynn Y.S. Lin in 1977
– BASES as a company started commercial operations in
1986.
– Bought by AC Nielsen in 1998.
– Introduced in India in the same year.
• Unilever now uses BASES for most of their STM
research.
– Earlier they were using their own model – Micro Test.
 Theoretical Underpinning
• Consumers do not usually do what they claim to do.
 Theoretical Underpinning
• Consumers do not usually do what they claim to do.
– However a strong correlation is found between
consumers’ claimed purchase behaviour and what
subsequently transpires in the marketplace.
.
 Theoretical Underpinning
• Consumers tend to overstate their intended
purchase behaviour.
– The level of overstatement varies by country, by culture,
and by measure.
 Theoretical Underpinning
• Consumers do not usually do what they claim to do.
– However a strong correlation is found between
consumers’ claimed purchase behaviour and what
subsequently transpires in the marketplace.
• Consumers tend to overstate their intended
purchase behaviour.
– The level of overstatement varies by country, by culture,
and by measure.
 Quantification of Volumes

Pre Bases BASES I BASES II

• Concept Test • Concept Tests • Concept Test BASES II Line
with very rough with volume combined with
volume estimates estimates within Product Test
Extension
25% accuracy • Estimates Volume
range affected by Estimation
sample size, in- incorporating
home usage, impact of
marketing plan
presence of
estimation, etc.
brand in the
• Estimates are
found to be market
highly reliable
(within 80%)
Which study is being
planned for Pizza?
 Data Collection
Concept
Intercept
Concept
Recruitment Interviewing
Stimulus
Interviewing

Product
Product 2 week In-
Interviewing
Placement Home Usage
Sampling – Quota Sampling
 Concept Stimulus
• Concept board or commercial
– Should contain as much information as will be conveyed
by advertising or other mode of communication
– Should also contain prices, sizes, and varieties
Constructs in Consumer Survey
 Questionnaire
• Key Measures
– Purchase intent
– Units per purchase
– Value for the price
– Intensity of liking
– Uniqueness
– Willingness to Pay
• Diagnosis
– Attribute Ratings
– Likes/Dislikes
– Source of Volume
– Suggested Improvements (after use)
 CONCEPT PURCHASE INTENT
Definitely Buy & Probably Buy

ADJUSTED TRIAL
Thumb Rules: 80% of Def Buy &
30% of Probably Buy

ENVIORNMENT ADJUSTMENT

MARKETING PLAN
ADJUSTMENT
1. GRPs and Resultant Awareness
2. Weighted Distribution

Trial Volume = Target Households X Trial Rate X Trial Unit

Repeat Volume = Repeat Rate X Repeat Occasions X Repeat Unit

BASES Database serves as the primary device to be used for

interpretation.
Benchmarks available for Concept and Product After Use Trials
and Repeats