Concept and Product Testing of Nespresso Lattissima - Research Paper Example

Concept and Product Testing of Nespresso Lattissima of Executive Summary The report is based on designing the concept testing and product prototype testing procedure for the new product development process of Nespresso Lattissima. The product is a single serve coffee espresso machine of Nestlé Nespresso S.A. which includes unique features such as one-touch milk frother technology and auto rinsing facility. The further discussion regarding the concept testing process has detailed the aim and objectives of the procedure as well as the suitable respondent for the market research process. The objective of the concept testing is targeted to analyze the acceptability of the concept within the potential marketplace. The targeted respondents include current users of Nespresso coffee machines, specialists from Specialty Coffee Association of America and importers from six major coffee import countries. The report has suggested focus group discussion for the successful completion of the concept testing process. The organization needs to select 8-10 respondents from each group to conduct the research. This process will allow the organization to gather in-depth details of the market while incurring less expense. This section has also evaluated the justification and limitation of this research process. The second section has discussed the product testing process which will focus on relating the customer experience regarding the product prototype with the product concept. It will assess the feasibility and acceptability of the finished product within the marketplace. This research process has selected quantitative as well as qualitative aspect to gather insight from market. The quantitative process includes online survey and conjoint analysis while the qualitative part considers focus group discussion. The report has detailed the implementation process of these research metho0ds with sample questionnaire. Finally, it has discussed the justification as well as the limitation of the research processes in the product testing method. Table of Contents Introduction 4 Concept Testing 4 Aim and objectives 5 Suitable respondents 5 Concept testing procedure 6 Justification of the concept testing procedure 7 Limitations of concept testing 7 Product testing 8 Research aim and objectives 8 Key information for the research process 9 Suitable participants for product testing 9 Product testing processes 10 Implementation of research method 11 Justification of the product testing procedure 12 Limitation of product testing 12 Conclusion 13 References 14 Appendices 15 Introduction New product innovation and development processes are the integral part of any organization that allows businesses to survive in the competitive market. The rapid changes in the current business trends, technologies, consumer preference and limited product differentiation has hugely shortened the product life cycles of different organizations. This changing environment is influencing a number of organizations to frequently introduce new products (Ulrich & Eppinger, 2012). According to Crawford & Di Benedetto, (2008), the development of new product concept involves the estimation of unique and relevant characteristics of products that can assist organizations to generate benefits to problems related to other available products. Proper utilization of different steps of market research assists organizations to provide products as per the changing demands of the consumers while poor research provides inability to properly meet the demand of consumers. Therefore, organizations need to properly analyze the likeliness of concept and adaptability of products before introducing the final product to the targeted market. Crawford & Di Benedetto, (2008) have offered three basic tests that are essential for product innovation such as concept testing, product testing and market testing. The further discussion of the report will focus on designing the concept testing and product testing procedure of the market research plan prior to the launch of single service coffee espresso machine known as Nespresso Lattissima. It is a brand of Nestlé Nespresso S.A. which is considered to be one of the leading coffee and coffee machine manufacturing organizations. Nespresso Lattissima is one of the recent innovations of the organization which provide consumers one touch milk frother solution. The model of Lattissima is developed by an Italian original equipment manufacturer DeLonghi. The organization sells their machine under the brand name of Nespresso (De’Longhi, 2007). The result of the concept and product testing of Nespresso Lattissima will enable the marketers to successfully launch the product in the market. Concept Testing Concept testing is one of the major stages of NDP process that is essential for analyzing the reactions of consumers towards the concept of new products. The concept testing procedure generally used to gather relevant information related to the concept of a new product such as the feasibility of the technology, customer utility and potential cost of new products. The information gathered from concept testing allows organization to assess and eliminate poor concept, determine the market size and develop potential marketing strategies. This procedure involves the designing of a series of questions that will allow organization to evaluate the feelings and opinion of consumers regarding new product concept (Soukhoroukova, et al., 2012). Aim and objectives The major aim of the concept testing process for Nespresso Lattissima is to analyze the likeliness and adaptability of the potential consumers towards the concept of this new one touch milk frother espresso machine. The further research will focus on the following objectives- Determination of the need of the market and the suitability of the product according to it. Analysis of the strength of the concept as well as assessment of the opportunity for improvement. Analysis of the understanding of potential buyer regarding the product concept. Analysis of potential barriers and negative perception regarding the feature and function of the product. Assessment of the target market and analysis of their behavior in terms of product usage, buying decision and price sensitivity. Suitable respondents The concept testing procedure of Nespresso Lattissima will include the following groups of respondents: The sample of consumers who own earlier models of Nespresso coffee machines. The opinion and experiences of this sample will allow the marketers to analyze the current performance of their products as well as the required developments. A small section of specialist from Specialty Coffee Association of America (SCAA) will be selected for the concept testing to gather better understanding related to several issues of coffee machines and their solutions. SCAA is a trade organization for specialty coffee industry which set standard for growing, brewing and roasting of premium coffees (Wilson & Wilson, 2014). The concept testing will also consider a sample of coffee importers from the major six coffee importing countries across the world such as USA, France, Italy, Germany, Japan and Belgium (Johnson, 2012). The analysis of the rate of product concept likability and adaptability by the coffee importers of these countries will enable the marketers to assess the potential sales and target market. Concept testing procedure The concept group testing process will utilize qualitative research methods to analyze the opinions and feelings of a wide range of respondents. The qualitative research process will assist the management to gather an in-depth understanding regarding human behavior, perceptions and ideas (Corbin & Strauss, 2014). The most suitable concept testing procedure for Nespresso Lattissima will be focus group discussion. Focus group discussion is a qualitative research method which allow the researchers to select a small section of representatives from the target market or audience to gather their perception, believes, attitudes and opinion regarding the researched topic. This research process required a group moderator and a questionnaire to initiate and conduct the discussion. The overall process provides the opportunity to the group members to clearly impart their ideas and opinions through a discussion process. The group moderator is responsible for gathering the thoughts and ideas of a group of people on a specific idea or design by administrating the members towards a proper direction of discussion (Gibbs, 2012). The benefits of arranging a focus group discussion are- This process will assist the management to get in touch with a number of important respondents around the world with incurring minimum expenses. This process will provide clearer idea regarding the target market and their likeliness towards the concept. The constructive discussion of different focus group regarding the preliminary product concept will provide sufficient data to the management to analyze the idea of the new concept (Gibbs, 2012). The focus group discussion procedure will be conducted by gathering 8-10 representatives from each group of respondents. The focus group discussion with the respondents of different countries can be conducted through video conferencing. Initial invitation of group discussion will be sent to near about 150 respondents of each selected groups. Therefore, 8-10 members will be allocated as per their interest, response and time availability. During the focus group discussion, each group will be provided with a moderator to administrate the discussion regarding the attribute, potential features and price and required product modification for Nespresso Lattissima. The moderators of each focus group will be provided with a concept statement and questionnaire guide for the free flow of the discussion. Justification of the concept testing procedure The recommended focus group discussion procedure will assist the management to gather detailed information and ideas regarding the new product idea of Nespresso Lattissima. The small group discussion process will enable them to cover different global markets such as major importers of coffee and coffee machines, local and global coffee machine market and other specialists. The different aspects of the gathered qualitative data through this research tool include- Identification of the feasibility of the concept within the target market group. Identification of the potential market and develop strategy accordingly. Allocation of the strengths and weaknesses of the concept. Modification and change the concept according to the ideas gathered from the targeted groups (Corbin & Strauss, 2014). The industry analysis of coffee machines has indicated the increase in the number of competitors that are entering in the market with different innovative products. The analysis of current market trend of the coffee machine industry has detailed that presently there are no particular product that provides multiple facilities such as one-touch milk frother and automated rinsing facility (Stevenson, et al., 2014). These facilities provide various benefits to the consumers by reducing their time in coffee preparation and cleaning procedure. Therefore, Nespresso Lattissima can be considered as an innovative product concept for the potential consumers. It is essential for the management to move towards the next stages of new product development to guarantee desired market growth. Limitations of concept testing The concept testing procedure has also witnessed a number of limitations which should be considered by the management for the proper execution of the plan of new product launch. The potential limitation of this concept testing has been listed below: The respondents of the focus group may face difficulties to conceptualize the attributes of the new technology and product based on only the concept statement. The time lag between the focus group research and result analysis can witness changes in the concept of the consumers. The concept test result cannot assess the satisfaction of the potential consumers after utilizing the actual product. Smaller size of sample provide limited picture in terms of the acceptability of the product concept by the large market. The rapid changes in the marketplace can change the ideas and attitude of the consumers (Soukhoroukova, et al., 2012). Product testing After the successful completion of concept testing procedure, the marketers need to consider the product prototype testing process to analyze the acceptability of the potential market. Product testing is a procedure to measure the performance and proper ties of products. This process influences the management to expose a prototype of the product to a selected sample of targeted consumers under a controlled condition. This process is targeted to evaluate the rate of market acceptability of the finished good (Grunert, et al, 2011). This process assists the management to analyze the performance rate of the product in comparison to the competitors and the process to improve the performance. It also allows the management to assess whether the attributes of the prototype are complimenting the concept of the product and whether the preferences and attitude of consumers are changing after utilizing the prototype. The development of product prototype can allow the management to analyze the preferred trends of the users in the initial stages of the new product development process. Therefore, it can assist the management to identify and solve different product related issues to eliminate market failure and added costs (Grunert, et al, 2011). Research aim and objectives The product testing procedure for Nespresso Lattissima needs to consider the following objectives: The product testing needs to confirm that the prototype is complimenting the product concept. The process also needs to ensure that the product is performing as expected while fulfilling the needs of targeted consumers. The product testing must gather feedbacks of consumers to assess the feasibility of the product. Key information for the research process The key information’s to be assessed through this product testing process are: The rate of product acceptability through the feedback, perception and experience of the consumers about Nespresso Lattissima prototype. Assessment of the performance of the prototype in comparison to the concept of the product. The product purchase intensity of the targeted consumers. Evaluation of the performance of the product in comparison to the available competitor brands. Assessment of performance of the product within the laboratory and real life situation. Identification of the technological problems and possible weaknesses. Suitable participants for product testing The product testing process of Nespresso Lattissima need to be conducted within the following group: A sample of current Nespresso coffee machine owner need to be selected to analyze their perception regarding the feasibility of the latest development of features and technologies. A small section of other coffee machine users also need to be considered to analyze their likelihood to accept this new brand over the existing. The respondents of SCAA who have already attended the focus group discussion regarding the product concept (Wilson & Wilson, 2014). The respondents of concept testing from six major coffee import countries. Product testing processes The product testing process will utilize three different research procedures for the different respondent groups. The management needs to use quantitative research procedure for the consumers who are using different models of Nespresso machine as well as other brands of coffee machines. Quantitative research process allows the management to utilize more logical as well as data-led approach to measure the responses of the samples in a numerical and statistical point of view (Bernard, 2011). The online survey procedure has been selected for the following reasons: The online survey procedure will allow the management to gather information from a wide database of respondents within a limited time frame. This process will allow the respondents to answer the questions as per their convenient time. The questionnaire of online survey can consist of a combination of scaling questions, single and multi-choice questions and open ended questions. The cost of conduction the online survey is very limited. The online survey utilizes very simplified instructions that reduce the confusion of respondents (Bernard, 2011). The conjoint technique of market research enables the researchers to determine how the consumers value or rate the attributes of the particular product. This process generally utilizes statistical measurement procedure to analyze the likeliness of consumers towards features, benefits and functions of the product (Rao, 2014). According to Crawford & Di Benedetto, (2008) the results of conjoint analysis provides valid measurements for the early analysis of the market acceptability of any product prototype. The focus group discussion will be utilized for the respondents of SCAA and six major coffee import countries. This in-depth qualitative research procedure will provide product related information from an expert point of view. This open discussion through the focus group will incur lea expense to the marketers while conducting research within wide respondents across the globe. Implementation of research method Online survey: Online survey process will be conducted for the selected sample of respondents who are utilizing the competitor brands for coffee machines. The management needs to select a sample size of 200 respondents to conduct the online survey. The management needs to organize a campaign within a shopping mall or food section of a leading super market chain to invite a number of visitors to utilize and experience the features of new Nespresso Lattissima machine. The contact details and email id will be duly noted for each of the visitors who have experienced the product. The next stage will include the distribution of the questionnaire through an email. The management is expecting to gather responses from at least 130 respondents. The final stage will include the analysis of the responses. This process will require two months to complete the analysis procedure. The survey will be in a narrative format and respondents will receive the survey through emails. The survey details have been provided in the appendix 2. The survey questions will probe different issues related to the satisfaction of the respondents in terms of their usage of competitor brands. It also focuses on the requirement and preferences of the respondents in terms of coffee machines. The survey will emphasize different factors that affect the decision making process of respondents such as price, features, technologies etc. The initial stage of online survey process will include the allocation of consumers who are using competitor brands. Conjoint analysis: Conjoint analysis process will be utilized for the selected respondents of Nespresso coffee machine users. The conjoint analysis will be conducted through a scaling questionnaire which also will be circulated through email. The respondent will be selected from the visitors of the campaign in the shopping mall or food section of a leading super market chain. The existing consumer will be contacted through email as well as phone calls to attend the campaign. The email for survey will be sent to the existing consumers of the organization. The management needs to select a sample of 200 respondents. It has been expected to receive at least 150 responses for the proper analysis of the survey. The responses need to be gathered within 1 month. Therefore, the statistical analysis will be conducted within another month. The questionnaire for online and conjoint analysis will be the same. The research process will mainly probe questions regarding the current features of the product and their feasibility and adoptability within the consumers. It will also emphasize on the potential drawbacks and weaknesses of the new as well as current products. This research process will be based on different attributes such as brewing time, auto-rinsing facility, one-touch milk frother, capsule coffee extraction, removable milk container, design, energy consumption, price and warranty length. The questionnaire of this research has been detailed in the appendix 2. Focus group: The focus group research will be conducted within the similar set of respondents of the concept testing. Most of the focus group process will be conducted through video conferencing. The analysis of the focus group research data will be compared to the concept testing process to assess the similarities and dissimilarities of responses. This process will allow the management to evaluate the similarities of the product and its technologies as per the concept of the product. Justification of the product testing procedure The product testing process has utilized wide range of research methodologies to gather information from different types of the respondents. The online survey and conjoint analysis will allow the marketers to gather information from a wide range of existing as well as potential consumers. This process will enable the organization to impart knowledge about their newly developed product and its features to the potential consumers. Therefore, it will allow them to increase the awareness regarding the product without incurring much cost. The focus group research will be beneficial to analyze the gap between the product concept and actual product. This process will assist the management to plan for product development and product modification to meet the need of the market. Hence, this process will enable the management to design their marketing plan to launch their product. Limitation of product testing The limitation of product testing includes: This process is not capable to measure the market side, the volume of sales and the repeat purchase tendency. The time gap between research initiation and result analysis can reduce the market attractiveness of the product. This process is not suitable to analyze the price of the product (Grunert, et al, 2011). Conclusion The report has evaluated the role of market research process during the new product development phase. The discussion has illustrated the concept testing and product prototype testing process for Nespresso Lattissima. The concept testing process has allocated different respondents from the six major coffee supplier countries, Specialty Coffee Association of America and current users of prior model of Nespresso. This stage has selected the focus group discussion process to gather in-depth information related to the feasibility of the concept. The successful implementation of concept testing assists organization to generate product testing process. This method allows the management to generate prototype to assess the market acceptability of the product. This process will utilize online survey, conjoint analysis and focus group process to analyze the likeliness of the respondents to accept and adopt this product. The discussion has also justified the utilization of these research processes for the benefit of the new product launch procedure. Finally, it has also detailed the potential limitations to the processes. References Bernard, H. R. (2011). Research methods in anthropology: Qualitative and quantitative approaches. Maryland: Rowman Altamira. Corbin, J. & Strauss, A. (2014). Basics of qualitative research: Techniques and procedures for developing grounded theory. London: Sage publications. Crawford, C. M. & Di Benedetto, C. A. (2008). New Products Management: Ninth Edition. New Delhi: Tata McGraw-Hill Education. De’Longhi, 2007. Nesprosso Lattissima. Retrieved from https://www.nespresso.com/ecom/medias/sys_master/public/8842497327134/delonghi_lattissima_fr_en.pdf. Gibbs, A. (2012). Focus groups and group interviews. Research Methods and Methodologies in Education, Thousand Oaks, 186-192. Grunert, K. G., Verbeke, W., Kügler, J. O., Saeed, F. & Scholderer, J. (2011). Use of consumer insight in the new product development process in the meat sector. Meat science, 89(3), 251-258. Johnson, D. Z. (2012). International Intellectual Property Scholars Series: Using Intellectual Property Rights to Create Value in the Coffee Industry. Marquette Intellectual Property Law Review, 16(2), 283. Rao, V. (2014). Applied Conjoint Analysis. New York: Springer Science. Soukhoroukova, A., Spann, M. & Skiera, B. (2012). Sourcing, filtering, and evaluating new product ideas: an empirical exploration of the performance of idea markets. Journal of Product Innovation Management, 29(1), 100-112. Stevenson, P. G., Bassanese, D. N., Conlan, X. A. & Barnett, N. W. (2014). Improving peak shapes with counter gradients in two-dimensional high performance liquid chromatography. Journal of Chromatography A, 1337, 147-154. Ulrich, K.T. & Eppinger, S.D. (2012). Product Design and Development. McGraw-Hill. Wilson, A. P. & Wilson, N. L. (2014). The economics of quality in the specialty coffee industry: insights from the Cup of Excellence auction programs. Agricultural Economics, 45(S1), 91-105. Appendices Appendix 1: Concept statement and moderators guide for the focus group research of concept testing 1. Research goals: Determine the need of market regarding the new concept of product. Assessment of the strength of the concept and opportunity for development. Analyze the understanding of the respondent regarding the concept of the product. Analyze the negative perception and potential barrier of the concept. 2. Introduction: Purpose Welcome everyone and thank you very much for your willingness to participate in this focus group. I am _________ and today I am here to guide the discussion regarding a new product concept of Nestlé Nespresso S.A. I want to let all of you know that I am not an expert in this area but I would like to gather your honest opinion regarding the topic we are going to discuss. There is no right or wrong answer for the questions. Before I start the discussion, I would like to provide you details about the features and function of the product. We are going to discuss about Nespresso Lattissima. This is a single serve espresso machine with one-touch milk frother and auto rinsing facility. The model of Lattissima is developed by an Italian original equipment manufacturer DeLonghi. Disclosure I want to inform you that the entire discussion will be recorded as well as I will take required notes. The identity of each respondent will not be disclosed in the final report. Procedure There is no right or wrong answer. I want to gather opinion from everyone. Please provide honest opinion. One person talk at a time. The entire process will take 40-45 minutes. 3. Questions for consumers Q 1. Do you prefer to use coffee espresso machine? Yes or No? Why? Q. 2. Which features of your espresso machine you like the most and why? Q.3. Which features of your espresso machine you dislike the most and why? Q.4. Which features you are expecting to have in a one-touch espresso machine? Q.5. Do you think one-touch milk frother will be beneficial for you according to your usage? Q. 6. Do you think auto rinsing facility will be beneficial for you according to your usage? Q. 7. What do you think will be potential benefits and drawbacks of this concept? Questions for SCAA specialist and coffee importers Q.1. Do you think consumers are inclined towards purchasing coffee espresso machines? Q.2. According to you what is the future growth potential of single serve espresso machines? Q.3. Which facilities do you think will assist the coffee espresso machines to capture a good share in the market? Q.4. What is your opinion about one-touch milk frother facility in coffee espresso machine? Do you think the market will adopt this product concept? Q.5. What is your opinion about auto rinsing facility in coffee espresso machine? Do you think the market will adopt this product concept? Q.6. What barriers and restriction this concept may face in the market? Appendix 2: Questionnaire for online survey and conjoint analysis Introduction Thank you for showing interest in this survey. This study has been conducted to gather your opinion regarding your experience of the Nespresso Lattissima machine. Your participation in this study will assist us to gather knowledge about the feasibility of the product features. Hence, we would like to gather your honest opinion in this section. Disclaimer Your responses will be treated unanimously. None of your personal details will be disclosed in the final report. Q.1. What is your age? 65 Q.2. What is your gender? Male Female Q.3. Occupational activity. Full-time Part-time Student Unemployed Retired Q.4. Please rate these coffee types in order to your preference (1- being most preferred and 4 being least preffered) Instant coffee Branded coffee shop coffee Vending machine coffee Home coffee machine coffee Q. 5. Please mention the name of coffee machine brand you are currently using? Lucca A53 Mini Faema Carisma Saeco Aroma Jura Impressa J9 Nespresso Inissia Nespresso Espresso Others Q. 6. Which feature you like the most within your product? Q.7. Which features you dislike the most within your product? Q.8. Rank this features of Nespresso Lattissima as per your preference. (1 being most preferred and 5 being less preferred). One-touch milk frother facility. Auto rinsing facility. Low brewing time. Removable milk container. Price. Color. Design. Q.9. According to your idea what should be the pricing strategy of the product? Premium Price Competitive price Flexible price Value added price Q.10. Which features you liked the most in the Nespresso Lattissima machine? And why? Q. 11. Which features you disliked the most in the Nespresso Lattissima machine? And why? Q. 12. Do you think that the product can fully support the concept? Please provide reason? Yes No Q.13. Do you like to purchase this product in near future? Provide reason for your choice? Yes No Read More