PRODUCT MARKET RESEARCH

Hidden Opportunities: How Effective Market Research can Supercharge Your Product Strategy?

Discover Untapped Markets, Gain Customer Insights, and Stay Ahead of the Competition with Actionable Market Research Techniques

9 min readMar 24, 2023

Product & Leadership Playbook

Play 17/196 — Know your market

As a product manager, developing a winning product strategy is crucial to the success of your product. But how do you ensure that your product is meeting the needs of your target market? The answer is market research. In my professional career, Market research was always the most important process of gathering and analyzing information about the current market, competition, and industry trends to inform the organization about new opportunities or dangers.

To make market research effective, you need to continuously go after and identify hidden opportunities in order to make informed decisions and stay ahead of the competition.

In the past decade, I have been leveraging market research very successfully, and I wanted to share with you today how you can gain insights into your customer’s needs and preferences, identify new markets to expand into and optimize your product’s features and pricing.

We’ll dive into the benefits of conducting market research, how to run it effectively, and how to leverage the insights gained to develop a winning product strategy. Whether you’re launching a new product or looking to optimize an existing one, understanding the power of effective market research can supercharge your product strategy and lead to more tremendous success in the marketplace.

Define Your Research Objectives and Questions

The first step in running effective market research is to define your objectives and the questions you want to answer. This will help you stay focused on what you need to learn and ensure that your research is adjusted to the needs of your product and target market. For example, if you’re developing a new software product, your research questions might include:

What features are most important to potential customers?
What are the pain points of current solutions on the market?
What price points are customers willing to pay?
What is the current size of the market, and how fast the market is growing?

One of my favorite go-to places for market research is Gartner, which is a leading research and advisory company that provides insights and analysis on a wide range of technology-related topics, including market size and growth trends. While going over the reports, my focus is usually on:

Market Size and Trends: My first focus item is on the analysis to identify the size of a given market in a country or area. I am mainly looking for growth projections and trends. This includes analyzing industry reports, government data, and other relevant sources to understand the current state of the market.
Customer Needs and Preferences: This is a complex problem to solve, however with modern technology available, I am using with the team a variety of surveys, focus groups, and customer interviews to understand the needs and preferences of potential customers. The focus is always on the current market offering and what additional digital products and services that customers are looking for.
Competitor Analysis: I am quite against following what the competition doing blindly, however, it's so important to identify existing digital products and services in the market, as well as the marketing strategies of the competitors. With my team, we are currently focusing on analyzing the features, pricing, and marketing messages of the market competitors.
Technology Trends: Customer needs are crucial, even more, is how customers will interact with the product and how the digital products will be delivered to the customer, therefore I am always including emerging trends and innovations.
Pricing Strategy: This is another layer of the research, however, I am always keen to see the pricing strategy for the market and digital products and services. I am also setting up multiple experiments for testing different price points with a sample of potential customers to determine the price elasticity of demand.
Market Segmentation: Out of the box, segmentation seems to be an easy subject, however, it's so important to understand and develop buyer personas to represent different types of customers and their purchasing behaviors, including their average orders, retention, churn, customer lifetime value among the most important to spend time on.
Product Development: Based on the insights gathered from the market research, I am trying to map, what needs to be done in order to start and set up the Software development to harvest the low-hanging fruits first.

Determine Your Research Methodology

Once I am done defining the research objectives and questions, usually I am going into the next phase to determine the best methodology for gathering data. Depending on the budget, timeline, and type of data, I am balancing the following tools for the research:

Surveys: Online survey tools like SurveyMonkey, Google Forms, and Qualtrics can help gather quantitative data from numerous participants quickly and efficiently.
Focus Groups: In-person or online focus groups can provide rich qualitative data and insights into customer preferences, opinions, and pain points.
Customer Interviews: One-on-one customer interviews can provide in-depth insights into individual customer needs and preferences.
Social Media Listening: Monitoring social media platforms like Twitter, Facebook, and LinkedIn can provide valuable insights into customer sentiment and opinions about your product or industry.
Competitive Analysis: Conducting a thorough analysis of your competitors’ products, marketing strategies, and pricing can help inform your own product strategy and identify gaps in the market.
Online Analytics: Analyzing website traffic, click-through rates, and other online analytics data can help identify customer behavior and preferences.
Data Visualization: Using data visualization tools like Tableau or Power BI can help simplify complex data and make it easier to identify patterns and insights.
A/B Testing: Testing different product or marketing strategies with a small sample of customers can help identify which strategies are most effective before investing in a full-scale launch.
Customer Persona Development: Creating detailed customer personas can help ensure that your product and marketing strategies are tailored to the needs and preferences of your target market.
Market Research Agencies: Partnering with a market research agency can provide expertise and resources to conduct a more comprehensive and in-depth market research study.

Recruit Participants and Collect Data

In my next step, it's usually time to meet with potential customers and collect data. Depending on your choice of methodology, I highly recommend to not forgetting to meet users face to face and the easiest way to do that is to reach out to potential participants through online surveys, social media, or recruiting agencies. Once you have recruited participants, you can start collecting data using your chosen methodology.

Surveys: I am mainly focusing on using surveys as a commonly used way to interact with potential users. For me, the key to engaging potential users through surveys is to keep them short, clear, and focused. Providing an incentive, such as a chance to win a prize or a discount on a product or service, usually helps to increase participation.
Focus Groups: Focus groups are an interactive way to engage potential users in a discussion about their needs and preferences. By bringing together a small group of people who share a common interest, the development team can gain valuable insights into their user's opinions, attitudes, and beliefs. Focus groups are also a great way to test new product ideas and gather feedback on existing products.
Interviews: One-on-one interviews with potential users, let it be on sight or online via Zoom, can provide in-depth insights into their needs and preferences. By asking open-ended questions and actively listening to their responses, my product team is gaining a better understanding of what motivates potential users and what barriers they face when adopting new products or services.
Social Media: One of the easiest ways nowadays is to use Social Media to get people's opinions. I usually ask my team to start experiments by creating social media groups or communities, so the company can interact with potential users and gather feedback in real-time. Social media can also be used to recruit participants for surveys or focus groups.
User Testing: We are aiming to repeatedly do extensive user testing, which involves observing potential users as they interact with a product or service. By watching how they use the product and listening to their feedback, the company can identify areas for improvement and make changes to the product or service.
Incentives: We are always offering incentives, such as a chance to win a prize or a discount on a product or service, which can help motivate potential users to participate in market research. Incentives can also help to build goodwill and trust with potential users.

Analyze and Interpret Data

After speaking with customers, and getting lots of feedback for me the next step is to analyze and interpret the results. This involves identifying patterns and trends in the data and drawing insights that can inform my product strategy. Depending on the size and complexity of the dataset, you may need to use statistical software or hire a data analyst to help with the analysis.

For example, if you find that a particular feature is consistently rated as the most important by participants, you may want to prioritize its development in your product roadmap. If you find that customers are willing to pay more for a premium version of your product, you may want to consider pricing strategies to maximize profits.

Apply Insights to Product Development and Marketing Strategies

My final step is to apply the insights gained from your market research to product development and marketing strategies. This involves incorporating feedback from customers into our product roadmap, refining our messaging and positioning, and optimizing the pricing and distribution strategies.

For example, if your market research indicates that customers are frustrated with the complexity of existing products on the market, you may want to focus on developing a more user-friendly product that addresses these pain points. If your research indicates that customers are more likely to buy your product through a specific online retailer, you may want to prioritize partnerships with that retailer.

If you’re interested in learning more about the importance of prioritizing your roadmap, check out this article on the topic.

Conclusion

In conclusion, running effective market research is very for me and my team to maximize profits and minimize risks in a given market. By following the steps outlined above, I hope that you as a product manager can gather the insights you need to develop winning products and marketing strategies that meet customer needs and preferences while staying ahead of the competition.

About the author:

Hi, I’m Lehel. I became a product manager to fuel my curiosity in technology and business management by creating digital products. My journey allowed me to dive deep into product design, user experience, business administration, and learning multiple programming languages. I have been fortunate to lead programs for successful Startups and Fortune 500 companies whereas a leader, my focus is on establishing a great product culture to help people strive by following servant leadership and radical candor principles. In my free time, I write about product management & leadership topics to document the learnings of my past 15 years in the field.

It starts with:

You can find me at lehelkakonyi.com as well.