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Q2. Consider the offering concept. Test this concept and suggest ways to develop it further. Develop a
positioning after the concept test (i.e. a positioning statement) (Hint: you will have to decide all the steps
involved in the concept test and then conduct the test along with data)

Concept Testing helps us get feedback from potential customers and gain qualitative insights for
improving the offering and making it more tailored to
consumer needs. Consumers derive more value from
the offering post accurate concept testing.

The different types of concept tests are outlined

here. During the different phases of new product
development, it is advisable to utilize selection,
diagnostic and forecast concept tests to strengthen
the offering.

To carry out the concept test, we would follow the

seven-step approach:

Step 1 - Define the purpose of the concept test


Q1. Should the AI career counselling service be pursued to development stage? (SELECTION)

Q2. How to improve the AI career counselling service? (DIAGNOSTIC)

Q3. How well will the potential AI career counselling service sell? (FORECAST)

Step 2 – Survey Population Selection

Target Market – The following segments in urban India

high school students college goers young working professionals

We have ensured that the survey population is representative of the target market. These are 3 major
sub-segments as a part of our target market as illustrated above. Hence, we have ensured that potential
customers in each of these 3 sub-segments are surveyed.

Step 3 – Survey Format Selection

Format Used Pros Cons

Face-To-Face Interviews Strong reliable insights can be Pre-arranged time to be set up

uncovered without the risk of any with customers based on their
bias. availability.
The emotional state / bias of the
customer can be judged and taken
care of.
Ideal for soliciting ideas for
improving the concept.
Telephone Interview Strong reliable insights can be Pre-arranged time to be set up
uncovered without the risk of any with customers based on their
bias availability.
Cold calling may not fetch
Postal Mail NA Poor response rate, heavily time
Electronic Mail Better response rate. Unsolicited mail can be perceived
We used it for folks with whom we to be annoying by customers
had a positive relationship.

Internet survey Attractive response rate Selection Bias

As indicated above, we have used Face-To-Face interviews, Telephonic interviews and internet survey
for our concept testing.

Step 4: Communicate the concept

Survey format selection is linked closely

with choice of concept communication

We propose to adopt the following

communication methodologies:

1. Verbal Description
2. Storyboard
3. Video
4. Simulation
5. Interactive Multimedia

Verbal description – This is extremely integral as the benefits of an AI powered counselling need to be
communicated to the end consumer coherently as this it still a nascent technology which hasn’t been
penetrated much in the market.

E.g. Our AI career counselling services is backed by a strong predictive algorithm and gamifies the
strenuous experience of finding a career which is most suited to your cognitive strengths & abilities.
Metrics related to attention and fact retention of the customer are signaled with 100% precision

Storyboard – Since this is a relatively new offering in the market, storyboarding will educate the
customer about the product and its benefits more efficiently

Video/ Simulation/ Interactive Multimedia – Relevant content about the offering centered around the
core value proposition of our service, delivered using these media will be extremely engaging for the
customer and will help generate greater brand and product awareness.
Price – It must be included in concept testing, only if it is expected to be unusually high or low. In our
case, we wanted to figure out how much the market is willing to pay for an AI powered career
counselling service. Hence, we asked respondents their willingness to pay for this service.

Step 5 – Measure Customer Response

Purchase intent measured most commonly

We will test this using a survey

Survey Components-


- Age? (if not in the specific age range then thank you and end)
- Currently Employed?
- Profession/Student?
- How do you make career choices?


- Product description as the customer value enhancing points


- If the product was priced as per the expectations of the customer, how likely would one be to
purchase/subscribe to the product within the next one year?

I would I would I might I would I would

definitely probably or might not probably definitely
not purchase not purchase purchase purchase purchase


- What do you expect the price of the subscription to be?

- What concerns do you have regarding the product concept?
- Kindly make suggestion for any features or elements to improve the offering?


Step 6 – Interpreting Results


Q = quantity of product expected to be sold during a time period

N = number of potential customers expected to make purchases during the time period.
- Existing product category: N is the expected number of purchases to be made of existing
products in the category over the time period
- New product category: N is the number of customers in the target market for new product

A = Fraction of these potential customers or purchases for which the product is available, and the
customer is aware of the product

P = Probability that the product is purchased if available and if the customer is aware of it


P = [Cd X Fd] + [Cp X Fp]

Fd = fraction of survey respondents indicating in the concept test survey that they would definitely
purchase (top box score)

This came out to be 8% which is very high as we described the concept in very detail and the value
proposition was very coherent to the masses.
Along with this we were also careful about which questions to ask at what point it the survey so as to
get the most relevant results.

Fp = fraction of survey respondents indicating that they would probably purchase (second box score)

A marginally higher number of 20% respondents said that they’ll probably purchase the product

Cd and Cp are constants usually based on company experience with similar products in the past.

0.10 < Cd < 0.50 and 0 < Cp < 0.25 (Many use Cd = 0.4 and Cp = 0.2)


Assuming there will be 10 M potential subscribers in the first year1, Therefore, N = 10,000,000
Assuming the company’s single distributor’s share, A = 25%
Therefore, P = (0.4*0.08)+(0.2*0.20) = 0.072

Hence, Q = 0.072 * 0.25 * 10,000,000 = 180,000

Hence, the expected quantity sold in the first period should be around 180,000 subscriptions.

Step 7 – Reflect on the result & process

Based on the survey and the forecasting results, we see that the number of 180,000 subscribers is quite
high when compared to that of the existing players in the market.

Hence we have to check for the pricing and positioning of the app in the app store and cater the kind of
offerings depending upon the needs of the consumers as derived from the survey.

Population and literacy rates from
and derived market size by comparing similar app downloads
Positioning Statement

For all young enthusiasts looking to kickstart or switch careers, our AI career counselling service helps
you gauge your innate strengths & weaknesses and provides you the most accurate, personalized &
convenient counselling services for crafting a career in every imaginable area spanning from beatboxing
to interior designing.