Market Research for New Product Development
The product development process is crucial when developing new products or services. It can take a lot of time and money, but it is necessary…
The product development process is crucial when developing new products or services. It can take a lot of time and money, but it is necessary to ensure that you create a new product that will be successful and that your target audience will be interested in.
That’s where market research tests come in. A market research test, also known as a product placement test, is conducted to get feedback and insights on the new product before it launches. The research saves companies time and money and reduces the risk of launching a failed product.
Let’s delve into the process of product placement research and its benefits.
What Is New Product Development Data?
New product development data is information gathered from market research used to make decisions throughout the new product development process. It can be qualitative or quantitative and is often collected using surveys, focus groups, interviews, and product testing.
Existing brands and startups spend a lot of time and money developing new products. However, even with a team of professionals at their disposal, most companies cannot predict how consumers will respond to their products.
According to Harvard Business School, more than 30,000 new consumer products are launched, and 95% of them fail. Fo this reason, it’s important to make data-driven decisions throughout the development process. Market research is the best way to gather this data.
For example, you could use an online survey to understand which demographic(s) would be most interested in your product. You can conduct an in-home usage test (IHUT) or focus group product review identifying any potential flaws with your design before launching.
Defining What Is Product Demand and Feasibility
To determine the need for a new product, you have to look at its potential market. There are two ways to do this: demand and feasibility.
New product demand studies are surveys used to examine how much potential a product has—they can also be called concept testing. This research is most useful if it’s done before any actual development occurs, so it can be used to indicate whether or not the product will succeed before anyone starts working on it.
New product feasibility studies are more complex and less common, but they do go into more detail about the market for the product. Feasibility studies are conducted after a prototype is created and before mass production begins.
These studies tend to involve the following five components:
- Demographic Analysis: The goal here is to identify the target market for your product based on factors like age, gender, location and income level. You’ll need this information to create a marketing plan that maximizes your appeal to your target audience.
- Competitive Assessments: This component will help you understand what products similar to yours are currently available on the market and evaluate their strengths and weaknesses. You can use this information to improve on existing products or position your product so that it fills a void or gap left by competitors’ products.
- Pricing Analysis: This helps you identify an appropriate price range for your product based on supply, demand, profit margins and other factors. Include it in your analysis if you have access to proprietary data about competitors’ profits or pricing strategies.
- Stakeholder IDIs: Stakeholder IDIs are in-depth interviews that help teams learn about different perspectives on an idea or issue. Teams can use these interviews with customers, employees, stakeholders, or even subject matter experts to gather information about different perspectives.
- Online surveys: These surveys are conducted online and can be used for product concept testing and market research. They can be used to gauge potential interest in products, packaging options, and promotional materials.
Competing and Positioning of the Product
Competition is everywhere. There are approximately 12,000 brands of toothpaste alone, and the average supermarket carries more than 40,000 products. If you’re launching a new product, it’s essential to understand how it will fit into this competitive landscape.
One of the best ways to do this is through product positioning research. This type of market research can help you better understand where your product will fit with your competitors and uncover insights on how to improve your product or service. It can also help you create a more effective marketing strategy for launch and beyond.
Product positioning research involves positioning your brand against the key players in your industry using a perceptual map that reflects how consumers view the attributes of competing products in an easy-to-understand visual format. This allows you to compare how people perceive different brands in terms of features, benefits and key performance indicators (KPIs) to identify your product’s strengths and weaknesses and improve appropriately before launch.
In addition to helping you assess where you stand against competitors, product positioning research can also provide insight on where to position your price, target audience, features offered, etc., for the best chance at success.
The Importance of Product Feedback
Product feedback surveys are ideal for gathering information about a product’s appeal. Product feedback surveys can be used at any product lifecycle stage, from idea generation through concept testing and post-launch review.
When a relatively small number of consumers are asked to provide feedback on a product, they are more likely, to be honest, and forthcoming than they would be in a focus group or one-on-one interview setting. In addition, it is easier to isolate the effects of specific features when only one element is being tested at a time.
Taking a potential product away from its natural environment and into test homes for extended periods can be expensive and logistically challenging. Product feedback surveys are a scaled-down alternative to in-home product placement tests. They offer a faster turnaround time and are less costly.
The ultimate goal is market research for new product development is to create a product that customers will love, and for this to happen, you must understand the needs and wants of your target audience. Use the above-mentioned tools and techniques in isolation or combination. Your choice will depend on the uniqueness of the product and its target consumer.
If you need accurate, reliable, and actionable market research for new product development, Grapedata is the right choice. Our experts will help you every step of the way to bring your new product to market. Our team understands how much is at stake and how to design an approach that meets your needs. Call us today for more information about how we can help you.