Harlan Beverly is pursuing a PhD in Business with a focus on Entrepreneurship and Marketing. In this presentation, Harlan outlines a study he plans to undertake to show that Product Conception Quality is a moderator of Advertising Expenditure to revenue success... specifically in the video game market.

1. Great Products Need Little Advertising
By: Harlan T. Beverly
Oklahoma State University
June 2013
* IGNITE FORMAT PRESENTATION

2. 50% of Products Fall into the
Chasm of Failures.1
1
Cooper, Robert G. “New Products: The Factors That Drive Success.”
International Marketing Review 11, no. 1 (1994): 60–76.

3. 2
Moore, Geoffrey A. Crossing the chasm: Marketing and selling disruptive products
to mainstream customers. Harper Business, 2002.
Moore Says: Get Passionate Early Adopters &Moore Says: Get Passionate Early Adopters &
Leverage Into the Early Majority.Leverage Into the Early Majority.

4. Godin Says, Build a
REMARKABLE PRODUCT3
3
Godin, Seth. Purple cow: Transform your business by being remarkable. Portfolio, 2003

5. How Many People Have Heard Statements Like:
“We just didn’t market the product well”
or
“It’s Marketing’s Fault, They Never Got the Word Out.”

6. Research Questions
• Can Advertising a Poorly Conceived
Product Lead to Success?
• Can Well Conceived Products Succeed
with less or even no Advertising?

7. Normal Assumption
RevenueRevenue
SuccessSuccess
AdvertisingAdvertising
ExpenditureExpenditure

8. Research Question
RevenueRevenue
SuccessSuccess
AdvertisingAdvertising
ExpenditureExpenditure
ProductProduct
ConceptionConception
QualityQuality
(Mo)(Mo)

9. Prior Research on
Product Conception Quality
• Existing Research has shown evidence that Product
Conception Quality is a key success factor of NPD:
– Product Superiority5
5
Cooper, Robert G., and Elko J. Kleinschmidt. “Screening New Products for
Potential Winners.” Long Range Planning 26, no. 6 (1993): 74–81.
6
Murphy, Steven A., and Vinod Kumar. “The Front End of New Product
Development: a Canadian Survey.” R&D Management 27, no. 1 (2002): 5–15.

10. Prior Research on
Product Conception Quality
• Existing Research has shown evidence that Product
Conception Quality is a key success factor of NPD:
– Product Superiority5
– Upfront Marketing Homework Research5
5
Cooper, Robert G., and Elko J. Kleinschmidt. “Screening New Products for
Potential Winners.” Long Range Planning 26, no. 6 (1993): 74–81.
6
Murphy, Steven A., and Vinod Kumar. “The Front End of New Product
Development: a Canadian Survey.” R&D Management 27, no. 1 (2002): 5–15.

11. Prior Research on
Product Conception Quality
• Existing Research has shown evidence that Product
Conception Quality is a key success factor of NPD:
– Product Superiority5
– Upfront Marketing Homework Research5
– Clarified Project Requirements6
5
Cooper, Robert G., and Elko J. Kleinschmidt. “Screening New Products for
Potential Winners.” Long Range Planning 26, no. 6 (1993): 74–81.
6
Murphy, Steven A., and Vinod Kumar. “The Front End of New Product
Development: a Canadian Survey.” R&D Management 27, no. 1 (2002): 5–15.

12. Prior Research on
Product Conception Quality
• Existing Research has shown evidence that Product
Conception Quality is a key success factor of NPD:
– Product Superiority5
– Upfront Marketing Homework Research5
– Clarified Project Requirements6
– Clearly meeting specific needs of the Target Market6
5
Cooper, Robert G., and Elko J. Kleinschmidt. “Screening New Products for
Potential Winners.” Long Range Planning 26, no. 6 (1993): 74–81.
6
Murphy, Steven A., and Vinod Kumar. “The Front End of New Product
Development: a Canadian Survey.” R&D Management 27, no. 1 (2002): 5–15.

13. Hypothesis
RevenueRevenue
SuccessSuccess
AdvertisingAdvertising
ExpenditureExpenditure
ProductProduct
ConceptionConception
QualityQuality
Lower Quality Conception will
Decrease Advertising
Effectiveness
Higher Quality Conception
will Increase Advertising
Effectiveness

14. Why Might Conception Quality
Effect Advertising Effectiveness
•Word of mouth marketing is one of the most powerful
methods of advertising.4
– It’s free
– It includes a built-in reference/recommendation
– It can be viral (go from person to person)
•According to Moore and Godin, this word-of-mouth and
referencing action is what makes products succeed.
4
Krishnan, Viswanathan, and Karl T. Ulrich. “Product Development Decisions: A
Review of the Literature.” Management Science 47, no. 1 (2001): 1–21

15. Modern Technology
• Modern Technology Has EMPOWERED customers such
that:
– They can easily research the best products to satisfy their
needs.
– They can easily see reviews and quality information.
– They can quickly get the advice and recommendation from
friends.
• Studies are Showing that Social Networks have
Increased the Power of “Word-of-Mouth”7
Trusov, Michael; Bucklin, Randolph E; Pauwels, KoenJournal of
Marketing, ISSN 0022-2429, 09/2009, Volume 73, Issue 5, p. 90

16. Does Advertising Even Matter?
• One goal of this study is to examine if
Advertising even matters at all!
– Or how little is needed to “get the Word of
Mouth rolling”

17. New Metric:
Product Conception Quality
Likert Scale Survey Questions:
•The Product Was Superior in it’s Category at Launch.
•The Product Was Targeted to a Clearly Defined Target Market.
•Marketing Studies Were Performed and Used During The
Product Definition Stage.
•Team Members Felt the Product Was Clearly Defined Prior to
Development.
•The Team Understood the Needs and Desires of the Target
Market Well.
•The Product was Designed to Fulfill the Needs and Desires of
the Target Market.

18. Research Design
• Survey & Historical Data
• 10 Game Companies, 10 Video Games
– Historical Independent: Advertising Expenditure
– New Metric Independent: Product Conception Quality
– Dependent: Historical Revenue Results
• ANOVA analysis with interaction effects

19. Risks
• Is the sample size significant?
• Can we even find 10 willing participants?
• Is Revenue the right Dependent Variable?
– Hoping by focusing on games, the price effect on revenue will be
mitigated somewhat.
• Is the survey metric for Product Conception Quality any good?
• Are there other more significant effects at play?

20. Thank You!