Overhead cost to test market products/services per project that exits or completes the test market products/services phase

This measure calculates overhead cost to test market products/services—where prototypes are used to assess the market potential for new or revised product/service development—per project that exits or completes the test market products/services phase. The results of the test market phase help a company finalize product/service characteristics and technical requirements. Overhead costs refer to those that an organization cannot identify as direct costs of performing a process; these include occupancy, facilities, utilities, and maintenance, etc. This measure is part of a set of Cost Effectiveness measures that help companies understand all cost expenditures related to the process "test market for new or revised products and services."

Benchmark Data

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Measure Category:
Cost Effectiveness
Measure Id:
101724
Total Sample Size:
7 All Companies
Performers:
25th
– Median
– 75th
–
Key Performance
Indicator:
Yes

Compute this Measure

Units for this measure are dollars.

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Overhead cost for the phase 'test market for new or revised products and services' / Number of projects that exit or complete the test market products/services phase

Key Terms

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Overhead Cost

For the purpose of this study, provide the total actual overhead costs for the year related to the specified process. These are costs that cannot be identified as a direct cost of providing a product or a service. Include the primary allocated costs such as occupancy, facilities, utilities, maintenance costs, and other major costs allocated to the consuming departments. Exclude systems costs that are allocated, since these will be captured separately as systems cost.

Cost Effectiveness

Cost effectiveness measures are those in which two related variables, one of which is the cost and one of which is the related outcome related to the expenditure are used to determine a particular metric value.

Median

The metric value which represents the 50th percentile of a peer group. This could also be communicated as the metric value where half of the peer group sample shows lower performance than the expressed metric value or half of the peer group sample shows higher performance than the expressed metric value.

Measure Scope

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Cross Industry (6.1.1)

  • 2.2.2.1 - Prepare detailed market study (10093) - Composing a detailed study of the market ecosystem in light of new products/services. Conduct a detailed analysis of the targeted market(s) in order to Introduce new products/services [10077]. Examine the competition, market size and growth rate, market trends, customer segments and their characteristics, market influencers, distribution channels, and profitability. Enlist in-house marketing and/or solutioning teams, or outsource to specialized professional services agencies.
  • 2.2.2.2 - Conduct customer tests and interviews (10094) - Conducting both qualitative and quantitative studies to determine the fit between the newly developed products/services and the customers. Conduct external tests of the new product/service, and then refine them to maximize the customer uptake. Gather feedback from prospective customers and targeted populations by conducting surveys, focus groups, interviews, and detailed studies. Enlist professional services such as public relations or market research organizations.
  • 2.2.2.3 - Finalize product/service characteristics and business cases (10095) - Finalizing the characteristics of new products/services by appropriately weighing feedback from prospective customers against a cost-benefit analysis in order to produce a profitable business proposition. Refine the attributes of the newly developed products/services, in light of the feedback and insights collected during Conduct customer tests and interviews [10094]. Revisit the high-level business case to justify the resources assigned to the product/service project against the anticipated benefits.
  • 2.2.2.4 - Finalize technical requirements (10096) - Reassessing the technical requirements in light of the final product/service attributes. Revisit the technical assessment to revalidate the organization's capacity for progressing with new product/service projects, in light of the revised product/service characteristics.
  • 2.2.2.5 - Identify requirements for changes to manufacturing/delivery processes (10097) - Identifying any changes that need to be effectuated in the organization's internal processes for manufacturing, and delivering the newly developed products/services. Determine if any changes need to be made to the production and distribution processes, in light of the new products/services. Begin production process planning. Prepare for factory layout planning. Generate shop-floor instructions and changes to the supply chain.