Full citation

Ozer, M. (1999). A Survey of New Product Evaluation Models. Journal of Product Innovation Management, 16, 77-94.

Format: Peer-reviewed article

Type: Research — Non-experimental

Experience level of reader: Fundamental

Annotation: Numerous models have been developed to help new product development managers determine which projects will be successful, and which they should abandon. This article reviews models spanning the entire new product development process, from concept generation through launch activities; and also highlights the circumstances in which each is appropriately applied.

Setting(s) to which the reported activities/findings are relevant: Large business, Small business (less than 500 employees)

Knowledge user(s) to whom the piece of literature may be relevant: Manufacturers, Researchers

Knowledge user level addressed by the literature: Organization

This article uses the Commercial Devices and Services version of the NtK Model

Primary Findings

Measures:

  • Full scale test marketing can be used to obtain sales forecasts and market share data. Marketing strategies can also be tested for effectiveness. This activity can produce valuable information, however, it can also be costly and time consuming. Therefore organizations should carefully consider the risks of test market activities for high-risk products or products entering unstable markets.
    Literature Review
    Occurrence of finding within the model: Step 7.13
  • Scenario analysis and information acceleration techniques can be used to forecast future needs and desires and to simulate impending market conditions.
    Literature Review
    Occurrence of finding within the model: Stage 1
  • Survey consumers to produce multiattribute models that inform the relative importance of product functions and features, as well as its position in the marketplace.
    Literature Review
    Occurrence of finding within the model: Stage 1, Stage 2, Step 4.11
  • Employ analogies of previous products to determine the potential success of new products. Must have similar market conditions to ensure accuracy. Also helpful in forecasting resource needs for development and production activities.
    Literature Review
    Occurrence of finding within the model: Gate 2, Gate 1
  • Utilize early sales data following a product launch to predict future performance. Utilize historical sales data for analogous products to assess the diffusion of newly launched products.
    Literature Review
    Occurrence of finding within the model: Step 8.2
  • Brand-equity analyses can be used to evaluate brand/line extensions. Combining historical data with consumer surveys, this analysis allows an organization to see the potential impact of brand extensions while still at the concept stage.
    Literature Review
    Occurrence of finding within the model: Step 2.2
  • Conduct a need/usage context analysis with lead product users to gain insights into new product opportunities. Although this technique is helpful for big picture questions, more specific marketing questions should be answered by combining other measures.
    Literature Review
    Occurrence of finding within the model: Stage 1
  • Utilize focus groups to understand new product usage and purchase habits of target market.
    Literature Review
    Occurrence of finding within the model: Step 4.11
  • Obtain expert opinions to inform early go/no-go decisions. Experts can provide insight regarding changing market conditions and potential consumer acceptance of products. However, managers must be aware of the potential for biases.
    Literature Review
    Occurrence of finding within the model: Gate 1, Gate 2, Stage 1, Stage 2
  • Survey consumers to obtain purchase intentions. Managers must note that changes in the marketplace and long spans of time between testing and product release may impact the reliability of such results.
    Literature Review
    Occurrence of finding within the model: Stage 1, Stage 2, Step 4.11
  • Pretest market studies can be used to obtain sales and marketing data prior to a large-scale test market or full-scale launch. Best used for low cost/low risk packaged goods.
    Literature Review
    Occurrence of finding within the model: Step 7.13
  • Environmental scanning can help to inform potential new products, as well as an organization's current offerings. However, the information must be communicated to various functional units within an organization.
    Literature Review

Method: Prototype testing can be used to uncover and correct problems. However, the small samples used may not be representative of the entire population. Information may be more useful for troubleshooting than for predicting success.
Literature Review
Occurrence of finding within the model: Step 6.3, Step 6.1

Tips:

  • Value products using a portfolio approach, considering a set of related products. Can be helpful for planning the sequential launch of new products, valuing products, and developing positioning strategies.
    Literature Review
  • Utilize pattern recognition/data mining techniques to uncover trends and develop long-term strategies.
    Literature Review