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PROMPT: Predictive Test Marketing
Prediki - Austria

Prediki PROMPT is a Predictive Test Marketing tool which helps agencies or clients to maximise the success chances of innovations. It taps a panel’s collective intelligence for forecasts & insights instead of just asking for claimed intent.


Development Stage: Growth Mode
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Prediki PROMPT elicits and quantifies the voice of consumers’ collective intelligence through an advanced market mechanism. The method produces more reliable and meaningful feedback compared to asking respondents for their ostensible purchase intent. 

Compared to legacy Simulated Test Marketing tools, PROMPT is advantageous when:

  • Innovation content is significant, not just incremental
  • Sharing a detailed, firm marketing plan is undesirable
  • Competitive or economic environment is volatile
  • Historic data is absent, scarce or not comparable
  • Multi-country research requires cultural neutrality

PROMPT consists of a structured sequence of tried and tested predictive probing patterns for every stage on the path from idea to launch. It plugs seamlessly into NPD processes like Stage-Gate or Design Thinking, wherever they reach a point asking: “Get prospective buyer feedback”.

Available PROMPT patterns include “BREW for Products” (Belief, Relevance, Effectiveness, Want) and “LURE for Communications” (Liking, Understanding, Relevance, Emotion). The platform and method is available for use or resale by small and mid-size research agencies, thus enabling them to compete with the Big Five in this service space.

(PROMPT is short for PRedictive Online Marketing and Product Testing)

Product failure rates have not improved since the advent of Simulated Test Marketing many years ago which is testament to a need for better solutions. Many practitioners also criticise that promising innovation opportunities often could not “beat” STM due to its over-reliance on normative databases of the past. 

Legacy STM tools for New Product Development are laborious for clients, expensive, and time consuming. They face increasing challenges as innovation accelerates, mass marketing changes, and social media influence grows.

Prediki PROMPT, a new class of Predictive Test Marketing (PTM) halves both, the cost and the time required for each test stage to just two weeks. It produces integrated quant and qual research, helping decision-makers at the current innovation stage and providing critical input for the next stage’s work in one go.

So far, Simulated Test Marketing tools were in the exclusive domain of only the largest market research companies, with a rumoured 50% market share for Nielsen BASES.

Now, Prediki PROMPT is available directly and through partnering small and mid-size agencies, thus empowering a much broader supply side. 

PROMPT (more than) halves the price point of current STM projects and reduces the laborious client-side preparations to a minimum. The method is applicable well beyond its traditional FMCG and CPG uses, such as in electronics, telecom, financial services, and tourism. A pilot case in pharma is envisaged for the near future. These factors should grow the demand side, significantly.

We believe that Prediki PROMPT will be a win-win for both sides of market research.

Background -- An international beverage company wants to find out the chances for market success of five unusual ideas for new package drinks. The innovation lies in the raw materials for the new drinks and how these are sourced. The ideas are at an early concept stage, the stimuli consist just of a headline, a paragraph of description, and an image to communicate the raw material and its sourcing. There is no marketing plan yet.

Objectives -- The client wants an estimate of relative sales volume for each concept to inform a product pipeline decision, and identify the key factors supporting specific demand. Which benefits are important for each beverage concept and its raw material? How big is the risk of cannibalising their existing range or damaging the positioning of their brand?

Study structure -- A Prediki PROMPT study is set up with an appropriately fleshed-out BREW pattern (see above) consisting of comparative and monadic prediction questions within the relevant beverage subcategory. The question battery is fielded for a week and directed by a moderator in local language. Respondent answers must be given in the form of defensible verbal and numeric predictions.

Quant results -- The client receives a report of volumetric forecasts, expressed as base case as well as upper and lower cases for scenario planning. Technical chart analysis reports insights from the trading process. In our case, the two top rated concepts are not far apart, volumetrically. Analysts harvest the quantitative action standard predictions to single out the key factors supporting each concept’s success rationale.

Qual results -- After translation and text analysis (coding) it turns out that the second best concept’s appeal rests largely on an implicitly assumed factor which was not even present in its explicit description. It also becomes obvious that product concepts ranked #3 and #4 appealed mostly to very specific target groups which conflicted with the brand’s existing premium positioning. The client drops these concepts as well as the concept which ranks only fifth in the quant report.

Q&A -- Client’s marketing director requests deeper information on the implicit key insight for the #2 concept and asks for feedback on a number of high-level ideas to capitalise on it. PROMPT analysts go back to the concept’s trading data and can confirm that the quintessence of the market talk supports one of the implementation ideas. A volumetric re-cast for the improved concept #2 beats the original #1 concept by a very material difference. The client moves to the next stage of product development (packaging).

Prediki PROMPT uses specialised question batteries in a closed-off section on Prediki’s second-generation prediction market platform. Batteries are proven questioning patterns consisting of comparative predictions for action standards, category topline forecasts, competitor benchmark predictions, and most importantly, volumetric estimates for each idea, concept, or product.

Stages -- PROMPT supports all stages of the innovation process:

  1. Needs stage: Predict a future vision of a category or industry. Extract ideas for action.
  2. Idea stage: Rank possible ideas by their likely contribution to measurable future goals.
  3. Concept stage: Use a BREW pattern to identify and optimise the best of several concepts.
  4. Communications: LURE patterns find and improve the best narratives for a new product.
  5. Pricing & promotion: Volumetric forecasts at various price points. Fine-tune launch plan.
  6. Post-launch: Track the likely sales for the first year and react quickly if needed.

Fielding -- At each innovation stage, the appropriate PROMPT questions are fielded for 3 to 5 days, depending on recruitment speed and concept complexity. Trading and market talk is moderated by Prediki or the partnering agency.

Analysis -- After fielding, analysts use Prediki's market analysis module to interpret the numeric trading data and the verbal market talk for answers to client objectives, to recommend decision alternatives and prioritise key improvements before continuing to the next innovation stage.

Reporting -- Tight integration of qualitative results with quantitative success indicators expressed as meaningful real-world KPI’s - such as estimated sales volume or market share - lend an unparalleled intuitive understanding of an innovation’s true potential with marketers, researchers, and stakeholders alike.

Validation -- PROMPT offers an inbuilt validation and calibration capability, as benchmark predictions for competitors are checked against market results. All volumetric estimates for innovation success are verified against real outcomes at prediction market settlement. This gives unprecedented control and full awareness of research accuracy and reliability. Traditional Simulated Test Marketing tools are often insulated from empirical falsification when the original plan or the market environment changes.
Author
Hubertus Hofkirchner
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