CONCEPT EVALUATION

（REMEMBER,

 PHASE ONE WASOPPORTUNITYIDENTIFICATION AND SELECTION

PHASE TWO WAS CONCEPTGENERATION

PHASE THREE IS CONCEPTEVALUATION）

CONCEPT EVALUATION:

1. CONTINUOUS PROCESS

2. STARTS WITH OPPORTUNITY IDENTIFICATION

3. TRANSITION FROM CONCEPT TO FULL SCALE DEVELOPMENT

4. USUALLY MORE THAN ONE CONCEPT AT A TIME IS BEING

EVALUATED (COMPETE FOR RESOURCES)

EARLY CONCEPT EVALUATION TECHNIQUES AND PRINCIPLES:

1.CUMULATIVE EXPENDITURE CURVE

LOOKS AT CUMULATIVE COST OR EXPENDITURES

LATE AND EARLY EXPENDITURE CURVES

FOR EXAMPLE:

PHARMACEUTICALSREFLECT HIGH EARLY CURVES AND LOWER LATE CURVES

CONSUMER PACKAGE GOODS REFLECT LOWER EARLY CURVES AND HIGHER LATE CURVES

REMEMBEROPPORTUNITYCOSTS

2.RISK/ PAYOFF MATRIX (TWO VARIABLES)

ANALYSIS OF THE RISK OF FAILURE/SUCCESS AND PAYOFF POTENTIAL

FOUR RISK STRATEGIES:

•AVOIDANCE

•MITIGATION

•TRANSFER

•ACCEPTANCE

3.THE A-T-A-R- CONCEPT MODEL

AWARENESS, 

TRIAL,

AVAILABILITY

REPEAT PURCHASE

FORECASTING SALES AND PROFITABILITY

PROFITABILITY = P x AW x T xAV x R x MARGIN

USE EARLY AND LATE IN THE PROCESS

CHANGE ONE VARIABLE AND THE EQUATION CHANGES

EVALUATION GO/NO GOPRINCIPLES:

•DON’T CONCENTRATE ON ONE VARIABLE AS GO/NO GO

•MAKE DECISIONS BASED ON CORRECT VARIABLES

•USE DATA

•USE FINANCIALS EARLY AND LATER

•LOOK AHEAD- ANTICIPATE

•TRY TO HELP THE CONCEPT NOT JUST “KILL IT”

•IT’S A CONTINUOUS PROCESS