The Importance of Market Research In Product Development
Launching new products and services on a constant basis is the best way to gain attention and generate visibility for your business. In the product development process, market research plays a critical role.
With the help of research, marketers and analysts can determine if a product will work, which features customers want, what competitors exist, and more. Therefore, even if this is a process that requires time and effort, it is essential to produce and launch successful products on the market.
Keep reading if you need to go through this. In this article, we’ll discuss the importance of market research in product development, its definition, and all the steps involved.
Let’s dive right in.
What is market research in product development?
Market research for new product development involves collecting information about the market’s needs, consumers’ desires, and the likelihood of the product’s success.
What are the benefits of market research for product development?
Market research can benefit your business on several levels. Listed below are some of the most relevant.
1. Minimizes business risks
When you explore the full potential of a new product, you’ll automatically be able to reduce your business’s risks.
Product Development is expensive, time-consuming, and resource-intensive.
Spending them on a Product Development that the market doesn’t need or that can’t compete with existing competition is therefore pointless. In the long run, this may also lead to the failure of your business.
Rather, thorough research could help you identify the actual needs of your customers, as well as your chances of success in the market, launching the perfect product-market fit.
2. Aids in launching the right products
Research is all about understanding what customers want, what they need, and how they want it. By gathering all this data and information, you will be able to build a successful product and ensure a market share upon launch.
3. Facilitates effective marketing
You can also use market research to facilitate and run marketing strategies that will lead to a successful Product Development, such as segmenting customers, mapping their needs, and many others.
4. Provides a competitive edge
As mentioned in the first point of this article, an in-depth market study can help you discover new opportunities and find market segments that are not yet covered by competitors or are covered only partially by them.
In this way, you can become the market leader in your niche industry and gain a competitive advantage.
How to start a product development research?
1. Identify your goals
Before conducting any type of market research, you need to understand what your objectives are and what you hope to accomplish.
You should, therefore, ask yourself a series of questions before starting:
- What do you hope to learn through your research?
- What are your expectations for the research?
- How are you planning to conduct the research?
- To whom are you planning to conduct research and testing?
2. Make a decision on the research method
As soon as you have defined your objectives, you need to decide how you will conduct your research. There are different methods you can use for your study, and we’ll describe them in detail later in this post.
The methods differ from one another and you’ll want to choose the one that you feel will work best for you in order to achieve your goals.
3. Find resources and partners for prototyping
Once you’ve conducted your research and obtained relevant data, it’s time to bring your product ideas to life by creating a prototype. A prototype is the first version of your product, and it will need some more testing before it goes live.
If you’re not going to develop the prototype in-house, it’s important to acquire resources and reach out to companies that do this.
It is, therefore, better to conduct some research for this too, and to find the best companies and resources beforehand, so that you won’t have to waste too much time later.
4. Test out your prototype
Testing is the last step before the launch of a new product. It is a phase where you involve potential customers and have them test your product functionalities to ensure they are working properly and meeting their needs.
This will allow you to gather other relevant data that you can use to improve or edit your product to fit the needs of the market.
Overview of four types of market research for product development
Research can refer to various phases of product development, from conception to launch. Research steps help you identify marketing opportunities and track product performance after launch.
Below are the different phases of market research you might conduct along the product development journey.
1. Exploratory research
Market research begins with exploring the potential markets. An initial exploration of the market means gathering valuable information about potential products that can satisfy the needs of current customers that are not met by other products available on the market.
You might either consider developing a new product or improving an existing one with new features.
2. Prototyping research
Following the exploratory research, you probably have a clearer idea of the product you intend to launch.
The next step will be to create a prototype.
It is necessary to carry out the second phase of research, called prototyping research. It allows you to determine whether or not the product you’re planning to launch is going to satisfy customers’ needs and meet their expectations. User testing is one way to determine this.
By doing so, you can avoid launching unsuccessful products into the marketplace and make additional improvements to your product.
3. Product improvement research
When you have gone through all the necessary testing, you might be ready to launch your product. Yet, it is opportune to conduct other research and analysis in order to determine if the product can be further improved.
To ensure this, you can conduct surveys and involve the market in the creation and improvement of your product.
4. Future potential research
You can’t expect to leave your product as it is after you launch it. Markets evolve, and customers’ needs do as well. It is highly likely that outdated products will decline and fail, and so will businesses behind them that don’t adapt to change and stay on the leading edge of technology.
Thus, you must always research new markets’ needs and keep your product improved and innovated to meet those needs. As a result, you should always keep an eye out for new opportunities by analyzing both consumer and competitor behavior.
Product development research methods
You can conduct product development research in different ways. Below are some of the best methods you can use.
Surveys are still one of the most effective ways of conducting market research. Through them, you can gain valuable insight and ideas for product development and improvement directly from people who have been or will be your customers.
Consumers may not be willing to take part in surveys without expecting something in return. In other words, you will need to be willing to offer them compensation or another prize in exchange for helping you complete the survey.
Observation is a research method that involves videotaping customers in their homes, in their offices, and in stores to analyze their behavior. By doing so, you can gain a clearer and more realistic picture of their habits, preferences, product usage, and more.
The process involves eye tracking with heat maps and interviewing users while they work in their natural environment so that you can identify relevant pain points.
3. Personal interviews
Personal interviews consist of unstructured and open-ended questions. Answers from these consumers will help you identify consumer desires, needs, and expectations, which will assist you in developing and improving a successful product.
4. Focus groups
The focus group process involves multiple participants answering a variety of questions. You can better understand people’s ideas and expectations when you interview a group of them at once, and you will be able to uncover common pain points that will serve as the basis for your product design or improvement.
5. User testing
During the prototyping process, user testing is an indispensable method of research. This ensures that your product works as it should and that it meets all the expectations and desires of your customers.
There are a number of platforms available today that allow you to make your testing opportunity available to a worldwide audience. Most of these platforms will allow you to define your target audience for the test based on factors such as age, the device used, preferences, and more.
The process of product development research requires time, effort, and money. It is therefore important to do it correctly to avoid losing all those resources.
Using the right steps, methodologies, and tools, as described throughout this blog post, can lead to the creation of successful products that will find their way to the market.
We appreciate you taking the time to read this article. We hope you found it informative and insightful. To learn more about the topic, check out this article about how to conduct market research on a low budget.
Flavia Silipo is a skilled SEO copywriter and digital marketing specialist with over two years of experience. You can find her on LinkedIn.