EVERY PROJECT MANAGER strives to complete his or her project on time, within budget, and meeting performance expectations. Normally, when this is accomplished, we consider the project a great success.
Yet, projects can still fail for a variety of reasons—an ill-fated assumption about the customer, too much focus to “push” a technical solution into the marketplace, or the zeal to just get started with the “real” work.
Like any investment, one invests resources in a project hoping to gain some return. In the early phases of any project, it is important to have a clear understanding of the market you intend to participate in, the target customers, and the value proposition you intend to deliver that will make the outcome of your project a success.
Of course, the techniques and extent to which one uses them to gather customer and market data can take a variety of forms—informal dialogues, surveys and focus groups, to mention just a few. Each of these has benefits and costs. When significant investments are being planned, more sophisticated techniques to gather credible Voice of the Customer (VoC) data may be used.
The customer's buying decision can be very complex. By applying proven market research techniques, such as conjoint analysis, we can begin to model the factors that influence a customer's buying decision and gain valuable insights that can help us in delivering the “right” products. Conducting a market research study of significant magnitude and complexity is a serious undertaking in which the application of project management can play an important role. Here's how Kodak is doing it.
Research to Reach Your Market
Eastman Kodak Company continually introduces products and solutions with the overriding objective of achieving total customer satisfaction. One particular program currently in implementation involves launching a new platform of products into a highly competitive environment. Given the significant amount of investment, a more thorough market and customer research study was deemed worthwhile.
As part of this new product development program, a separate VoC project was established to acquire a greater understanding of customer needs. The project objective was twofold: (1) gather market data to validate the value proposition for a new line of products; and (2) provide a vehicle to aid the product development community in making more informed, customer-driven design trade-off decisions.
Nicholas A. Campanis, PMP, has been employed with Eastman Kodak Company for 21 years, supporting a variety of lines of business in the areas of marketing, design, development and manufacturing. He served as project manager for the market research project.
VoC Project Charter
Exhibit 1. Shown here are excerpts of the project charter document, which were used to summarize and communicate key aspects of the project.
The product marketing organization served as sponsor and identified an individual to serve as project manager. With the high-level goals in place, the project manager and sponsor worked together to initiate the project.
Initiation Phase. During this phase, numerous dialogues took place between the project manager and functional representatives to share high-level project goals, identify and recruit the necessary skills, and assess the technical approaches that would meet our needs. This information was summarized into a project charter document (see Exhibit 1), which contained the team organization and membership; roles and responsibilities; high-level schedule milestones; project scope; and preliminary detailed requirements.
The project charter lacked a specific budget estimate or target. Rather than set all constraints on the project from the onset, the sponsor set aggressive schedule and output expectations, while letting the cost “float” until the team was in a better position to make appropriate trade-offs. Since the sponsor was totally committed about the need to conduct such a study, the project manager was given approval to initiate the project.
A kickoff meeting was held with the cross-functional core team and other supporting team members, which included representation from marketing, development, and business research. This meeting was important to launch the collective effort and begin aligning the team members.
Conjoint Analysis Technique Subset
Exhibit 2. The research technique used and the complexity of data influence project scope.
Planning Phase. It was clear from the onset that the magnitude of this VoC project would require the breadth and expertise of resources beyond what our company could efficiently take on. As a result, a major deliverable of this phase would be the construction of a Statement of Intent (SOI) and selection of a qualified market research firm. The SOI served as the request for proposal document to acquire bids, and contained:
Background information on the market and technology
Research objectives—what was needed out of the study
Scope of the study—this was an international study that would be conducted in multiple European countries as well as several different U.S. cities; the variety of locations was driven by the key factors of understanding customer needs in different market regions, and obtaining enough customers to generate statistically valid sample sizes
Timelines to be met
Other requirements (conducting a “blind” study so that customers would not be biased by knowing who was requesting their input, translations, respondent incentives, location of interviews, and so forth)
The various ways in which data would be reviewed and reported (e.g., by customer segments, by volume of product, by product attributes).
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The most critical aspect of this phase was to clearly define the deliverables and output of the market research, which would aid the team in selecting the most capable firm to partner with as well as the most appropriate research technique to use. Five market research firms were identified and participated in the bidding process. The proposals were reviewed for cost, time frames, past track record (if one existed), completeness and thoroughness of their package. Follow-up discussions were required to gain clarity in some of the proposals before the vendor of choice was awarded the bid.
Implementation Phase. Implementation consisted primarily of four major items of work:
Generation of the image prototypes that would be used in the study
The design of the study (that is, what and how data would be collected and put into a “model” to provide VoC data)
Field work (the collection of customer data and payment of incentives)
Analysis and reporting (finalizing the simulation “models,” inputting data, and presenting the findings).
One of the more time-consuming aspects of the project would involve creating a large number of sets of a variety of image prototypes that could be used as part of the customer interviewing process. Given the aggressive timelines established early in the project, this work was initiated during the Planning phase. While this imposed a cost risk to the project, it was deemed small in proportion to the schedule risk of delaying the project end date.
Early discussions between the market research firm and project team revolved around matching our needs for customer data with the most appropriate research technique. Ultimately, the study needed to provide the organization with a credible way to better predict how various product attributes would influence the customer's buying decision. Various forms of conjoint analysis were considered: traditional, adaptive, and discrete choice. Each technique has trade-offs, including the degree of “real world” presentation to interview respondents, flexibility with which to analyze different attributes, and the complexity of conjoint design. A traditional conjoint technique was chosen and the details regarding the specific product attributes and their levels (or values) were finalized. With 14 attributes and a range of two-to-six levels for any given attribute, 14,000 product combinations could theoretically exist. This would impact the scope and complexity of the study design because only a subset of the total possible combinations would be used to most accurately represent the total population. A subset of the conjoint techniques is depicted in Exhibit 2.
The design culminated in the development of several key research materials, which included a screener, a self-administered questionnaire, and the face-to-face survey questionnaire. The screener ensured that the desired types of individuals were being recruited for our study. It would be important to gather data from the target customers in order to make better decisions. Once customers were identified and willing to participate, the self-administered questionnaire was supplied to the respondent prior to the face-to-face interview. This enabled background data to be gathered and reduced the amount of time required for the face-to-face interview. The survey questionnaire consisted of a structured set of questions and numerous conjoint choice cards. From various scenarios presented to them, respondents would indicate their likelihood to purchase. This data would ultimately be used to construct models to simulate how customers would make trade-offs among different product attributes.
The study was scoped to cover several hundred customers from different countries. Given the breadth of the study, the design and data collection approaches were verified prior to a full launch. This was achieved by conducting a pre-test with a small number of customers in an environment that would be typical for the study. The pre-test provided an opportunity to evaluate a number of factors (complexity of the interviews, interview process, clarity of the questions, respondent fatigue, and so forth) and to minimize downstream risks of faulty data and schedule delays due to redesign.
During the implementation phase, business conditions changed, which resulted in placing the project “on hold” until a clearer business direction was certain. At the same time, investments came under greater scrutiny and the project manager was challenged to find more cost-effective ways to achieve similar results. Meanwhile, several proposals to reduce the cost of the study were developed and discussed among the sponsor and project manager. Eventually the project restarted, with modifications to the original scope and timeline of the study. The most significant change to the project scope involved who would recruit the customers and conduct the interviews, and the process of collecting the data. Since this work represented approximately 60 percent of the bid cost, this effort was shifted from the marketing research firm to internal resources to lower the overall costs of the study.
Path Forward
To mitigate the risk of incorporating any bias in the data collected from customers, the internal resources will be provided with training in the proper methods for conducting the interviews and completing the survey questionnaires. In addition, rather than doing a “blitz” of gathering data simultaneously from multiple cities, the schedule was extended to allow data collection primarily at industry trade shows. This would be complemented with some interviewing at a lowered number of cities. As the interviewing process begins, auditing of the initial returned questionnaires will be done on a timely basis, which will enable “errors” to be identified and corrected prior to data input. The survey data will be used to construct simulation models, which will provide our teams with better insights to the trade-offs customers make as they consider purchasing new or replacement products.
AS WE STRIVE TO DELIVER products that delight the customer, it only makes sense that we must know who the customers are and what they need and want. Market research information helps us to better position products in the market and deliver value-added solutions to our customers. When the investment to gain this market knowledge becomes significant, we need to instill a framework to ensure our market research deliverables are accomplished in a timely, cost-effective and quality manner. Using project management tools and methodologies provides a vehicle to determine the “right” product in a way that contributes to the overall project success.
