Importance Of Market Research In New Product Development

Market research is a part of the product development process. When launching a new product or revamping an old one, competition, taste of the customer, and market awareness are the success drivers. Unless a proper foundation is laid, even the best product will be in the air. Here we can observe how market research is behind every step of the product development process and why it is crucial to create a successful marketing strategy and to reach business growth.

Role of Market Research in Product Development

Creating a new product without market research is like sailing a boat with no map. Whether or not with a good concept, there is no guarantee of success — companies need to understand if there is even a market for the product, who they are, and what type of products exist.

It assists companies in:

– Discovering the needs and expectations of customers

– Identification of gaps in the market

– For competitive competition strategies in product and price

– To analyze threats and opportunities

– To pilot-test product concepts prior to when it would be expensive and to bet everything on scale manufacturing

Risk minimization and enabling well-educated company decision-making lead to evidence-based product development result in the chances of success in products.

Product Development Phases and Market Research Application

The product development process is typically a stage-by-stage sequential process: idea generation, concept definition, test-marketing, launch, and post-launch review. Throughout each stage of the process, market research is required in order to inform strategic decisions.

1. Idea Generation and Screening

 There’s a great idea behind every great product. But how do you know if your idea will be a hit? That’s where market research steps in. Market research, such as focus groups, surveys, and competition analysis, allows firms to observe what people need and what the market is missing.

For example, in designing a new fitness app, you can get to know what’s most important to the customers through surveying, i.e., tracking workout, meal planning, or social networking. Through competitor analysis, you can discover who are the market leaders and how you can use them to the best extent. It helps firms generate ideas for their product as well as establish the traits which would appeal to the customers.

2. Concept Development and Testing

After deciding the concept, the second is to evolve a product concept and test the same with the target customers. Market research in this regard is to make the companies understand the response of the customers to the product concept and what must be done.

Focus groups and product testing are some of the methods providing immediate feedback from the potential target consumers. That is where all other new energy drinks will either be too sweet or not be packaged in a manner one would even desire that permits firms to fine-tune the product before performing all the operations of scale-up. It’s a way of ensuring that the customers get content with the product.

3. Business Analysis and Formulation of Market Strategy

 Incidental to the product development process is also the establishment of the monetary and market value of the product. Market research is guiding businesses how to make demand projection, set the right price, and identify the target market.

Businesses are aware of:

– Market size and growth potential

– Competitors’ price and position in comparison to their own

– Willingness and ability of customers to pay

– Entry barriers

This data helps business firms develop an effective marketing strategy like product positioning, price, channels, and promotion strategy. Effective writing of marketing strategy is accountable for greater chances of product success and business development opportunities.

4. Product Launch

When the time to bring the product out into the market is at hand, market research will guide how to do it. Businesses will apply market research to ascertain the most desirable access in order to give the target buyer the most preferred channels, design communications most acceptable to the buyer, and schedule introduction timing in a manner to gain the most impact.

For example, if the new customers are forced to adopt a social marketing and online shopping preference, then business enterprises can choose web media as a platform to market the product. Customer behavior places the product before the target purchasers at the appropriate time.

5. Post-Launch Evaluation and Improvement

It doesn’t end when the product is already in the market. Market research is still required in knowing about how the product is performing and how it can be improved.

Customer feedback, sales, and market condition determine how good the product is doing in responding to customer needs and if change must be applied. In the event of weak sales, business firms can use market research to ascertain the cause — price, product, or consumer awareness — and respond accordingly.

Advantages of Market Research to New Product Development

1. Risk Reduction Amplified

Products are costly to make, and their failure will hurt a company. Market research eliminates the risk of failure since it discovers any flaw in advance and ensures the product fits what clients need.

2. Increased Customer Needs Knowledge

Success starts with knowing what people need and why. Market research gives companies their best picture of what customers require, what fails them, and how they buy so that companies can develop products which work.

 3. Competitive Advantage

A research-driven product is the market leader for a competitive market. Gap analysis and competition intelligence allow companies to develop differentiated value propositions for products.

4. Business Growth at a Fast Pace

Success gives way to business growth through enhanced revenue, market share capture, and customer retention. A value-added product with customer focus creates the firm’s market position in a short time.

5. Improved Marketing and Sales Strategies

With efficient promotion of the target market and market situation, business companies are able to develop efficient marketing strategies. It involves applying the appropriate medium for advertisement, competitive pricing, and message development.

Market Research and How it Enhances Entrepreneurship

To startups and small-scale enterprises, market research is of significant use. New products are a high-uncertainty factor for entrepreneurs. To possess information about what the consumers require, demand from the market, and rivalry informs startups with intelligence to make products that will be more likely to succeed at a greater pace.

For instance, if the entrepreneur is developing a new range of products in the green homes market, then from surveys it can be determined how well the competition is doing and what its future appears to look like. This can indicate opportunities within the market and enable the product to be positioned correctly for successful long-term business growth earlier. It is an evidence-based approach involving the best of the product to enable easy long-term business growth.

Conclusion

Product launch without proper market research in today’s competitive business environment is risky.

Right from the stage of product designing to subsequent research, market research helps businesses develop products according to customers’ needs, something rare in today’s competitive business environment, leading to business growth. Besides accelerating the rate of success, well-researched products also enhance the stature of the company in the market. For business entrepreneurs and small business firms, an investment in market research is a good choice that ensures long-term business success in the midst of the fast pace of product innovation.