Rule Developing Experimentation: A Systematic Approach to Understand & Engineer the Consumer Mind


by

Alex Gofman (Deceased), Howard R. Moskowitz

DOI: 10.2174/97816080528441120101
eISBN: 978-1-60805-284-4, 2012
ISBN: 978-1-60805-419-0



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Table of Contents

Foreword

- Pp. i-iii (3)

Yoram (Jerry) Wind

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Preface

- Pp. iv-ix (6)

Alex Gofman and Howard R. Moskowitz

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List of Contributors

- Pp. x-xi (2)

Alex Gofman and Howard R. Moskowitz

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Origins of RDE and the Role of Experimentation in Consumer- Driven Innovation

- Pp. 3-33 (31)

Alex Gofman

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Isomorphic Permuted Experimental Designs in Conjoint Analysis

- Pp. 34-47 (14)

Alex Gofman and Howard R. Moskowitz

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Detecting Explicit and Implicit Interactions within Rule Developing Experimentation

- Pp. 48-71 (24)

Alex Gofman and Howard R. Moskowitz

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Putting RDE on the R&D Map: A Survey of Approaches to Consumer-Driven New Product Development

- Pp. 72-89 (18)

Alex Gofman

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RDE in Concept Research: An Empirical Demonstration

- Pp. 90-105 (16)

Alex Gofman and Tõnis Mets

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Consumer Metric Scales

- Pp. 106-128 (23)

Kannapon Lopetcharat and Dulce Paredes

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Foundation of Sensory Optimization in the Food Industry

- Pp. 129-144 (16)

Howard R. Moskowitz

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Introduction to Sensory Optimization

- Pp. 145-157 (13)

Howard R. Moskowitz

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Sensory Optimization in Research and Development

- Pp. 158-183 (26)

Maximo Gacula Jr.

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Measuring Interest and Price for Sensory Experience: Application to Hotels

- Pp. 184-200 (17)

Johanna Fyrbjörk, Rieko Shofu, Linda Ettinger Lieberman and Howard R. Moskowitz

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Messaging Across National Markets—Effectiveness and Segmentation

- Pp. 201-220 (20)

Gillie Gabay, Samuel Rabino and Howard R. Moskowitz

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Extending RDE to Evaluating Potential Social Anxiety Factors

- Pp. 221-241 (21)

Howard R. Moskowitz, Alex Gofman, Gillie Gabay, Hollis Ashman and Ipshita Ray

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Consumer-Driven Advertising Research

- Pp. 242-262 (21)

Jeffrey Ewald

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The ROI of Woo: Starting, Sustaining and Improving the Relationships Business and Brands Have with Consumers

- Pp. 263-278 (16)

Mike Gadd and Jennifer Gadd

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Helping Packages Get Noticed on the Shelf Using RDE

- Pp. 279-298 (20)

Alex Gofman, Howard R. Moskowitz and Tõnis Mets

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Introduction to Consumer-Driven Optimization of Landing Pages

- Pp. 299-309 (11)

Alex Gofman

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Consumer-Driven Website Optimization

- Pp. 310-326 (17)

Alex Gofman, Howard R. Moskowitz and Tõnis Mets

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Consumer-Driven Website Customization: The Need to Manage Costs and Benefits

- Pp. 327-351 (25)

Eelko K.R.E. Huizingh and Marije L. Teerling

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Introduction to Mind Genomics®

- Pp. 352-354 (3)

Alex Gofman

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Mind Genomics®: A Systematic Consumer Research

- Pp. 355-384 (30)

Howard R. Moskowitz, Alex Gofman, Jacqueline Beckley and Hollis Ashman

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Consumer-Driven Innovation Management

- Pp. 385-404 (20)

Arcot Desai Narasimhalu and Shekhar Mitra

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Neuromarketing 2.0: How Rule Development Experimentation is Innovating Neuromarketing Research

- Pp. 405-433 (29)

Sokol Zace and Howard R. Moskowitz

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Balancing People’s Future Demand and Design Genius

- Pp. 434-447 (14)

Marco Bevolo

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End Note

- Pp. 448-450 (3)

Alex Gofman and Howard R. Moskowitz

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Foreword

This book offers an intellectual delight and practical value for three audiences: (a) decision makers in a variety of fields ranging from corporate executives to public policy decision makers, (b) consumer and marketing researchers, and (c) that wonderful of all gifts, an informed reader who is intrigued by surprising insights and new scientific paradigms.

The basic premise of the book is that to address today’s challenges, one must understand the mind of the consumer and other relevant stakeholders. In this respect, the book follows the rich tradition of marketing orientation and its focus on understanding the consumer. The book furthers this approach by advocating and illustrating the value of Rule Developing Experimentation (RDE), which Howard Moskowitz and his colleagues have been developing over the last 30 years, and which was introduced in Selling Blue Elephants: How to Make Great Products that People Want Before They Even Know They Want Them (2007, Wharton School Publishing). This new book advances THE foundational ideas by offering for each audience segment a number of relevant chapters rich in concepts, innovative approaches, insightful findings, and timely examples.

Whatever your reading style – whether you devour books cover-to-cover or skim selected chapters – this book is a “must-read”:

  1. The book makes a strong case for the value of truly understanding the mind of the consumer in the solution of complex managerial challenges. The challenges span the wide range of issues encountered by today’s business, including R&D and new product development, sensory optimization for food products, packaging design, pricing, advertising, website customization and optimization, segmentation, as well as other key business-relevant decisions.
  2. The book provides a thorough explanation of the Rule Developing Experimentation (RDE) approach, including its origin, its intellectual and computational relation to conjoint analysis and other powerful analytic method. Additionally, the book presents a variety of creative applications which illustrate RDE in action, and delightfully engage the reader with innovative out-of-the-box solutions to key challenges facing companies, societies and individuals. Importantly, there is the ring of practicality, of experience, of stories and theory. The discussions are presented from the point of view of the practitioners, who conducted and wrote most of the chapters.
  3. The book gives the reader a new perspective on the emerging scientific paradigm of Mind Genomics®. Mind Genomics® maps the consumer’s dimensions of experience, creating microsciences of the everyday, a radically new vision for the project of consumer science. For any domain of human life, Mind Genomics® turns the spotlight on, using its RDE tool to identify the phrases which constitute for the respondents the domain of investigation , and within it what is important and what is not. The science focuses on the consumers at large, and reveals new-to-the-world, often quite fascinating, mindset segments. Whereas conjoint analysis and other approaches have done this before for specific applications, the unique feature of the Mind Genomics® world view is the relentless focus on cumulative knowledge across applications, with the goal to develop a usable, generalizable, accessible database of the findings. This ambitious goal finds its early application in this volume, but encourages the readers to add their own applications. This benefit is so important that an alternative title for this intriguing book could have been “The New Science of Mind Genomics®,” or “Mapping the Consumer Mind” to highlight this breakthrough idea of the book. Whereas the additional concepts embedded in the current title are important and the book delivers on them in a thorough and engaging way, the truly innovative idea presented by Howard Moskowitz and his colleagues in their study of Mind Genomics is a bonus for readers interested in exploring the practical value of a developing scientific trend.

The three benefits of the book are delivered in engaging and insightful ways, WAYS that I hope will stimulate readers to refocus their attention on the understanding of the consumer’s mind. As a professor I dearly hope that the reader will be sufficiently inspired, or perhaps simply intrigued enough to experiment with the RDE and related approaches. In the end, if the vision of mind genomics® is destined to come to fruition, in whatever format. Perhaps the readers will be inspired to augment whatever study they conduct with a search for empirical generalizations, and join the grand project of developing and continually updating the inventory of Mind Genomics® data, and its gift of insight.

Yoram (Jerry) Wind, Ph.D.
The Lauder Professor and Professor of Marketing
The Wharton School, University of Pennsylvania
Philadelphia
Pennsylvania


Preface

Mind Genomics®, Rule Developing Experimentation (RDE) and a New Science of the Everyday

In 1981, just three decades ago, editor HRM began a series of experiments to identify what ‘messages’ for toothpaste might persuade customers of Colgate toothpaste to remain with the brand, and which might entice prospective customers currently buying the competitor toothpastes to ‘switch to Colgate. This rather simple question and the ensuing experiment, run in Canada at the behest of the late Court Shepard, General Manager of Colgate Canada, would turn out to be the basis of a science. It’s hard to think of a science built on commercial products, dealing with the issues of everyday life. But this volume is testament to that science.

Our ingoing assumption at that time was that the consumer may not know what he wants, but he will know it when he sees it. We had another assumption, just as important, but we did not realize it then. That assumption was that by giving a person a compound test stimulus, we would increase the chances of identifying what elements were working. That is, it wasn’t a case of learn by ‘isolating,’ but rather learn by creating naturalistic mixtures of ideas, testing these combinations with consumers, and then deconstructing the reactions to these combinations into the contributions of the components.

For the first 30 years afterwards, from 1981 to 2011, we hummed along, doing these experiments, working for clients, answering business problems ranging from toothpaste to prescription drugs, from services in a bank to public policy about emergencies. Those were, formative years, filled with learning, insight, and of course excitement. The test methods now developed, we applied the new approach to various problems, including dividing people by the pattern of their responses to test stimuli, and more profoundly by the pattern of their utility values, the ‘driving powers’ of the individual elements. In all that work, the emphasis was on applying the method as a consumer-research technique to business issues.

Enter a Grander Vision – A Science of Everyday Life

Perhaps it’s one of the unwritten rules of science; work at a problem long enough, and soon the problem moves from something momentary to be solved to a source of wonderment about how the world works. We had this experience with the research approach of this book, RDE, Rule Developing Experimentation. Yes, we had begun with the trite problem of communicating what to say to make consumers buy more toothpaste. What could be more prosaic; almost a throwback to the 1950’s. Yet along the way something happened. The problem of discovering compelling messages grew to something else, to a deeper measurement of what motivates people to respond.

And so the science of RDE began. It had started with the trite, the simple, the everyday. But then, almost subtly, and after two decades, a shift occurred in the nature of the way RDE made itself useful. Over time the focus moved from finding the specific answer, the one or two messages, to themes, to general patterns of ideas that excited consumers. The year 2001 was a seminal year; often seems to us that around that time we realized that projects using RDE were as focused on understanding people in their everyday lives as they were in solving a business problem. For instance, studies on what to communicate to the California citizen about energy costs, a practical problem posed by a utility, turned out to be a study of the mind of the citizen with respect to energy issues. Simple fascination with the results, with the patterns emerging from nature, blurred the boundary between problem and solution, or between person and structure of beliefs. Reading the data tables turned out to be a detective story, ferreting out how people thought. Only secondary was the importance of the actual problem, the reason for the study in the first place.

As this subtle shift continued, we realized that this new approach was creating a science of the ordinary, the everyday life, step-by-step, almost insensibly building a structure of how we go about evaluating alternatives. We were aware of similar ideas in the marketing literature, of so-called tradeoff-studies, where the goal was to understand what the consumer felt to be important. However, we were heading in a different direction, creating an archival science of the ordinary, a science whose data could be housed in tables and books, and pulled down from the shelf at any time to get a better idea of how people think and what people value.

What is the Essence of this New Science

As we rushed headlong into experiments, studying all sorts of topics, from foods to utilities, from public policy to technology and technical services, we found ourselves facing the same question, again and again, asked by those who hired us to solve the problems, by colleagues who were interested in new ‘techniques,’ and most intriguingly by students at different universities where we lectured. The question simply was ‘what is this thing called RDE, rule developing experimentation?’

We editors, who had been schooled in classic science, were not accustomed to questions as profound as ‘what is this new science?’ We were more accustomed to providing solutions as professional consultants and consumer researchers. Yet, when we gave our lectures at the universities, we could see the gleam in the eye of the students, who, perhaps even more than we, intuited that this RDE ‘thing’ was something bigger. Students, by the way, are the most critical; being so young they are often not particularly diffident, having no trouble asking the hard questions, and expecting honest answers.

So what is the essence of this new science? What is Mind Genomics®? Quite simply, it is the study of how people react to the world of their everyday. The goal of Mind Genomics® is to create a database of the ordinary, to dissect specific experiences (e.g., buying toothpaste) into components, identify the different acts and messages, and then determine which of the components, acts, messages, drive consumer response, and which are irrelevant. At the end of the day, the vision is to open a book for any experience, show the experience dissected, show what’s important and what’s irrelevant, and finally identify different mind-sets, people who look at the same experience in different ways.

Reactions to this New Science

When we began publishing the results of our studies in the archival scientific literature, we found a number of reactions, many quizzical, some downright negative, all enlightening. Most of the research that we had grown up with over the past decades dealt with the ‘grand questions’ about some aspect of how the world worked. The typical scientific paper would begin with a hypothesis, a speculation about the relation between variables, a speculation typically grounded in the knowledge and scientific contribution of previous researchers. The research should be organized in a way to prove or disprove the hypothesis. The statistics came in one general flavor, inferential statistics, statistics to confirm or disconfirm sameness or difference between two observations: Did the observed data differ from what was expected, and at what confidence level?

Mind Genomics® and its tool, RDE, came to the scientific world with a different world view. Rather than hypothesizing how the world ‘might work,’ Mind Genomics® offered the organizing principle that it was here to ‘map the dimensions of experience.’ There was no need to offer a hypothesis, and spend the experiment proving or disproving that hypothesis. It was sufficient to identify a topic area, e.g., energy policy, map out the different ideas in this topic area through phrases, and then determine which of the different ideas appealed to consumer respondents versus which turned them off. The result was a description of a small corner of the consumer mind. Mind Genomics® mapped that corner, identifying how ideas worked in the consumer’s head.

It took quite a while to realize that the reactions to Mind Genomics® by other scientists were those of academics/researchers reared in the world of hypothetico-deduction to the notions and ideas offered by inductive research. We ended up realizing that Mind Genomics® was essentially organized induction; we would map out a corner of daily experience with ideas, learn ‘what worked, what did not,’ and then make more sweeping statements about how people react to the specific topic area. Even our segmentation of mind-sets into different groups was purely empirical and inductive; we identified people who showed different patterns of what was important, and from that information we speculated about the distribution of different ‘mind-sets’ in the population. All in all, inductive science, mapping new worlds, seeing what was out there in this exciting world of the everyday.

Inside the Scientist’s Mind(s)

Developing Mind Genomics® has taken 30 years, a half a lifetime, three decades of experiences. In light of the nature of this book, a compendium of applications from many colleagues who have graciously said yes, we thought that it would be a good idea to share one’s feelings about this journey. We’re not talking about the science or the technology, nor are we talking about the applications or the future. We leave that to our contributors. Rather, we’re talking about the inside of the mind of the scientist, how it feels to be on this journey, what it means from a personal point of view, the ‘soft stuff’ of science that’s often forgotten in the rush to publish. So here are some of the feelings from the ‘inside,’ where it’s happening.

The first feeling is slight astonishment that one could actually be part of something like Mind Genomics® . Most of us who do science or technology, whether basic or applied, grow up with the idea that we are going to ‘add’ to a corpus of knowledge, that we are going to be part of a community of scientists, doing normative research, identifying promising areas, adding to the literature, but doing so in a less than dramatic manner. We may dream of winning prizes, the Nobel, for instance, but we realize that that’s probably a pipe dream. Coming face to face with the implications of Mind Genomics® , is in the colloquial expression, ‘something else, entirely.’ We recognize that this new science, flawed but promising, given birth with so much excitement but also trepidation, may be something important. That feeling alone is what astonishes us, and continues to astonish as we make new discoveries.

The second feeling is curiosity. Just what world have we opened up? We don’t know. Each new study is an adventure. The sheer simplicity, ease, speed of doing RDE studies and adding to the corpus of this new science makes us want to explore. Every topic we read about, from digital piracy to food safety, from stock market investments to creating new political parties, ends up being the inspiration for a new study. The goal was to find out – just how does that part of reality ‘work?’ And, that the curiosity, the inner energy of the scientist.

The third feeling is gratitude, an inner joy that comes from knowing that one has contributed something, perhaps of great value, to the generations to come. We all want to leave something of ourselves to the world, to those who we may never see, but who will carry on after us. Mind Genomics® , the science, and RDE, the tool, is our contribution to the next generations. We don’t know where the science will take us; prophecy isn’t one of our gifts. But, we do know that we are giving those who follow some new tools that will move science and the world forward. And what could be more delightful than having our colleagues, the authors of chapters in this book, join us in giving to the next generation. For all that we are grateful.

As we close this foreword, we’d like to take a moment to thank some of the people who helped us along the way. No work of science, especially one that takes 30+ years to develop and ripen, happens in isolation. There have been many, starting with the late Court Shepard who had faith in us, moving to the many computer programmers who worked with us on the algorithms, and on to the staff of researchers at Moskowitz Jacobs, Inc. in Westchester County, New York, who struggled with the science, applying it to client problems, and in so doing improving it ever so much, continually, and with good spirit.

Our thanks go to our colleagues who accepted our invitation to write chapters. We are grateful to them; they bring so many different, new perspectives that we feel them to be co-inventing this science with us. Each colleague’s point of view sharpens the message, moves our thinking forward, and moves the science into new realms.

Finally, no work comes about without those who support it, day and day out. We’d like to thank our editorial coordinator, Linda Ettinger Lieberman, for her years of work, pulling the book together, making sure that all the details were taken care of, and essentially freeing us to do science while she made sure that we ‘delivered the goods.’ Thank you Linda, for this effort, and just as much for all the other efforts you have made on behalf of Mind Genomics® and RDE. Your efforts have truly helped move this science forward.

Alex Gofman, Ph.D. (Deceased)
&
Howard R. Moskowitz, Ph.D.
Maskowitz Jacobs Inc.
White Plains, New York
USA

List of Contributors

Editor(s):
Alex Gofman (Deceased)


Howard R. Moskowitz
Moskowitz Jacobs Inc.
White Plains
New York
USA




Contributor(s):
Hollis Ashman
Muse LLC
Powell
Ohio
USA


Jacqueline Beckley
The Understanding and Insight Group, Inc.
Denville
NJ
USA


Marco Bevolo
Independent consultant/author
The Netherlands


Jeffrey Ewald
The Optimization Group
Ann Arbor
MI
USA


Linda Ettinger Lieberman
Moskowitz Jacobs Inc.
White Plains
NY
USA


Johanna Fyrbjork
IPOS Sweden
Stockholm
Sweden


Gillie Gabay
College of Management Academic Studies
Tel Aviv
Israel


Maximo Gacula (deceased)
Gacula Associates Consulting
Scottsdale
AZ
USA


Jennifer Gadd
Gadd Research Inc.
Toronto
Ontario
Canada


Mike Gadd
Gadd Research Inc.
Toronto
Ontario
Canada


Oliver Gassmann
University of St. Gallen
St. Gallen
Switzerland


Alex Gofman (deceased)
Moskowitz Jacobs Inc.
White Plains
NY
USA


Eelko K.R.E. Huizingh
University of Groningen
Groningen
The Netherlands


Andrew Jeavons
Nebu
Cincinnati
OH
USA


Kannapon Lopetcharat
Nouveau Centric Co. Ltd. Bangkok
Thailand (Formerly with Avon Products, Inc
Suffern
NY
USA


Tõnis Mets
University of Tartu
Estonia


Howard R. Moskowitz
Moskowitz Jacobs Inc.
White Plains
NY
USA


Arcot Desai Narasimhalu
Singapore Management University
Singapore


Dulce Paredes
Takasago International Corp.USA,
(Formerly with Avon Products Inc.
Suffern
NY
USA)


Samuel Rabino
Northeastern University
Boston
MA
USA


Ipshita Ray
Pace University
New York
USA


Rieko Shofu
Hakuhodo
Consulting
Tokyo
Japan


Marije L. Teerling
Telematica Instituut
The Netherlands


Sokol Zace
Contact Design Inc.
Boston
USA


Marko Zeschky
University of St. Gallen
St. Gallen
Switzerland




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