Product Innovation Management -Kindle

Executive Summary

The purpose of this report is to provide an in-depth analysis of concept and product testing in new product development. It provides an evaluation of the most appropriate methods that should be used to ensure that concept and product testing are carried out in an efficient manner. These conclusions were drawn from theoretical work along with secondary research and applied to the Kindle E-book reader.

Identifying who will be involved in the concept and product testing will determine the quality of information gained. Young optimism and visual achievers of the Roy Morgan values segment along with industry experts, employees, suppliers and retailers will provide the best quality of information as they will be most able to understand the concepts involved with the Kindle.

The methods used within concept testing will also enhance the quality of information gained. Focus groups and surveys will be used along with a number of techniques within these methods to ensure that useful and accurate data is obtained.

Product testing will involve Alpha and Beta testing as this ensures that when released the Kindle will meet consumer needs while also have been thoroughly checked for performance issues.

Due to time constraints caused by it being necessary to release the Kindle in a timely manner some functional issues may arise, however concept and product testing and the methods used ensure that the best product reasonably possible is delivered to consumers in an efficient manner that will decrease future costs to the business such as product recalls caused by product malfunctions.

Table of Content

Introduction………………………………………………………1.0

Concept Testing………………………………..2.0

Research Objectives…………………………………………. 2.1

Concept Statement………………………………………….. 2.2

Define Respondent Groups………………………………. 2.3

Market Research Techniques………………………….….2.4

Implementation of Research Techniques…….……..2.5

Limitations………………………………………….……….……2.6

Product testing………………………..….……3.0

Research Objectives……………………………………….… 3.1

Define Respondent Groups………………………………. 3.2

Market Research Techniques and Implementation 3.3

Limitations………………………………………………………… 3.4

Caveats…………………………………………… 4.0

Conclusion……………………………….……….5.0

Reference List…………………………………. 6.0

Introduction 1.0

The creation of a global market place through a breakdown of boundaries between different markets and the advancements in technology has increased the competitiveness of consumer markets in the 21st century. For businesses this means that they must be forever attempting to increase or even just maintain a percentage of market share. One of the best ways to increase a business's market share is new product development. However the success rate of new products is around 60% (Griffin, 1997), this means that businesses need to approach new product development with care. However while care should be taken it is important to conduct concept and product testing as efficiently as possible (Regina C. McNally, 2011). Harmancioglu (2007) explains that sudden and dramatic changes can occur in the intended market for a product/service, which may inhibit the success of the product/service. Harmancioglu (2007) further elaborates that it is especially important for products that possess a distinct competitive advantage to get to market as efficiently as possible so as to keep a competitive advantage. This is of particular importance to new products such as the Kindle as they are creating a new market and as such stand to lose a competitive advantage if a competitor enters the market before them, while incremental new products such as line extensions may produce acceptable results. Hamel and Getz (2004) explain that it is innovative products that deliver the biggest payoffs. While this is important it does not guarantee success. Success is determined by the research that is conducted before the product is released; this includes concept testing, product testing and market testing (cooper and Kleinschmidt, 1995). When conducting these tests it is of paramount importance to ensure that the right questions are directed to potential consumers in the correct way. Henry Ford once quoted "If I had asked people what they wanted, they would have said faster horses." This statement underlines the importance of asking the right questions of the target market, as often consumers are unsure of what exactly it is they what.

Concept Testing 2.0

Research Objectives 2.1

1. What are the potential market segments for the E-book market?

Information needs

- Segmentation of the market based on:

• Benefits sought

• Psychographics

• Socio-graphics

• Recency, frequency and monetary

2. What attributes/features of the kindle E-book reader would be important to potential market segments?

Information needs

- Design

• Size

• Colour

• Weight

• style

- Functionality

• Battery life

• Connectivity

• Storage capacity

• CPU power (load times)

• Inputs

• Interface

• Available content

3. What would potential customers be willing to pay?

Information needs

• Is quality more important than a high price

• How much will price determine the perceived value/position of the E-book reader

4. Do potential customers see a need for the Kindle E-book?

5. What do potential segments believe the strengths and weaknesses of the Kindle concept to be?

Information needs

• What do they think is being done well

• What do they think could be done better

6. Is the concept missing any product features or have features that may not be necessary?

Information needs

• What isn't being done at all

Concept Statement 2.2

This is an industry first product, it is called the Kindle E-book reader and it is smaller and lighter than the average hard cover book. It is revolutionary in that it allows for the user to carry around thousands of books along with a myriad amount of other content such as newspapers and magazines. The interface has a high-contrast screen that simulates a printed page, meaning that your eyes will not grow tired as a traditional screen would have you do.

It has no ongoing fees, provides free built in wireless and E-books are a fraction of the price of their paper back counter-parts. The design is more ergonomic than stylish so as to focus on having the best product features, while keeping the price reasonable.

Define Respondent Groups 2.3

Respondent groups will contain the target market while focusing on market segments that will be best able to understand the concept of the Kindle. This includes the Roy Morgan values segments young optimism and visible achievers; it will also include early adopters of new technology along with consumers who particularly enjoy reading. Finally industry experts or in the Kindles case as there is currently no E-book industry, technical experts within and outside the company will be used to determine if it is technologically possible to engineer the attributes that are important to respondents.

The segment young optimism will be included as they are "young professionals, technocrats and students