Why Market Research Should be Part of Your New Product Development Strategy

Consumers love new products, and introducing new products is a great way to attract new customers to your business.   However not all new products are successful;  before launching a new product it is important to gather significant market research information to minimize the risk of failure.   To see what happens when a company launches a product without market research read my post:

Do Market Research Before Launching a New Product or You Could Regret It Later

If you are an entrepreneur or small business owner developing a new product, modifying an existing product, or adding to an existing product line, carrying out market research will help you understand your market, customers, potential prospects and competitors, to tap into consumers unmet needs and wants.  Unmet needs represent opportunities for your business to grow.

In order to fully understand the size of the business opportunity a mix of both qualitative and quantitative research is required.

Qualitative research in the form of focus groups or depth interviews is necessary to get a deep understanding of consumers unmet needs.  There are several ways of finding consumers unmet needs:

  • Understand consumer’s problems –Consumers problems represent an unmet need for which you can provide a solution – a solution they will be willing to pay for!
  • Get customers’ recommendations – Ask consumers what improvements they would like to see made to an existing product and you will tap into an unmet need that your company may be able to fill.

Once you understand consumer’s problems or unmet needs, quantitative research is required to measure the size of the demand to ensure that it will be profitable to you or your business to develop a product to solve that problem.  Quantitative research consists of a relatively large number of structured interviews and should measure attitudes to the product, product usage and likelihood to buy the product if it were available.

Summary

Market Research is a powerful tool which can help you find opportunities to develop a new product, or update a current product.   Developing new products can be costly, but by carrying out market research first you can minimize the risk by discovering what consumers want and their likelihood to buy the product.

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