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Tuesday, March 5, 2019

Market research strategy 4 steps and 4 benefits

Market research is important for every new product development and helps launch the right products in matching markets.
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Marketing research is what makes this process more effective, and we are going to tell you why it is important in a moment. Great product ideas don’t automatically make for a successful product. That is why conducting market research is one of the most crucial steps when the need for new product development arises. This is true whether you’re developing electronic devices or other consumer products. It makes sure that you not only launch a quality product but one that people will find useful.

Now that you know how important market research is, it needs to be done correctly if you are to get actionable data. Here are a few tips that you can use when conducting market research so it turns out successful.

What are you trying to achieve with your market research? Defining your objectives is perhaps one of the most important steps. You need to sit down with your team to find out what questions you want the data to answer. Those answers will become your objectives. Once you know what you are looking for, you can determine the data you need in order to achieve your objectives.

Before spending any time or money on the product idea development, make sure you have a market for the end solution. This is done through design research of existing products on the market and near future launches.

Vital information about the market needs to be gathered to help position the product to be developed, take advantage of opportunities, and gain a competitive edge. The best way to do this is to go directly and talk to the consumers using information gathering techniques like surveys, questionnaires and design focus groups.

When you decide to take on every aspect of your idea alone, there is a chance you can end up being overwhelmed. While being the jack of all trades means you get to enjoy a greater cut of the profits, it is impractical with the demands of modern life. Where possible, try to work with professionals that can ease the work, carry out engineering design, get the product manufactured. This can often be a contract manufacturer as well.

But before we get to that, let us talk a little more about market research so the concept sinks in.

Market research is the process of gathering people from a target demographic in order to garner their thoughts and opinions on a particular topic. For instance, if a company is in the process of developing a product for chefs, they would need to gather some chefs together and ascertain their thoughts and opinions about their product idea. The information they gather from the group of chefs will inform every decision they make as they develop the new product, whether the decision concerns the product design, prototype, packaging and even advertising.

With a good product in mind, the designer must now prove the product feasibility of the idea before skipping on to production. Product feasibility ensures the designer develops a product the customers will be willing to pay for. There are a number of ways in which a designer can validate their product ideas such as:

  • Sending online surveys to get feedback on the idea
  • Using a crowdfunding campaign
  • Asking for feedback on the idea from online platforms
  • Researching online customer demands
  • Creating a “coming soon” page to size the public interest through email opt-ins or pre-orders

Whichever way the designer decides to validate the idea, it is vital to get feedback from a substantial and unbiased audience as to whether they would purchase the product. Validation should also involve a competitive analysis. If the idea has the potential to be brought to life, competitors are likely working on the same idea.

The designer needs to take the time to plan before they can move on to making a prototype. It is easy for a designer to get lost if they do not have a concrete idea of what their product will look like or work.

The first step in planning is drawing a sketch of what the designer wants the product to look like. The drawing should be as detailed as possible, showing labels explaining the features and functions of various parts.  The designer uses the sketch to list the various components or materials they will need to bring the idea to life.

Market research strategy

The designer must consider the packaging, labels, and the quality of the materials to be used before they continue to sourcing and costing. These will have an impact on how the company markets the product to their target market.

Determine what data you need

What data do you need from the market research? You can only answer this question after you know the reasons why you are conducting market research. It could be that you want customer data so that you determine their needs or whether they think you have a good product design. You could even want competitor data so you can anticipate their next move and give yourself a bigger competitive edge.

Before you get your product manufactured, you need to know what the market is like. To that end, you need to get your hands on the latest reports and acquaint yourself with them. If you are looking for free local, national and global market reports that offer a wide range of useful data, try visiting the Business Information Center.

Conduct field research

When it comes to going out into the field, there is a wide range of data gathering methods you can use. You have surveys, interviews, questionnaires, focus groups and even direct observation. Since there is no one method that suits every type of market research, it is impractical to recommend one over the other. You can use one or several at once – it all depends on your needs.

If you do not want to go through the hustle of doing the market research yourself, the best option is to hire an agency to do it on your behalf. A market research agency is more experienced and has the time to conduct a thorough private study that will give you actionable data. Of course, this all depends if your budget allows it. If it does, find agencies that specialise in your industry and work with them.

Act on results

Market research doesn’t just take time to conduct, it also takes money. It would be a complete waste to not act on the results once you have them. This requires an accurate interpretation of the data, which will provide you with actionable insights that help you identify opportunities. You can even hire an outside party to interpret the data for you to eliminate any bias.

Keep it going

Market research is an ongoing activity; it is not a once and done deal. Why? Because the market environment is dynamic; customer needs evolve, new players come in or new technology can cause a disruption. This means what is suitable for the market today in regards to your product might not be the case tomorrow as you continually get your product manufactured.

The need for new product development is a good thing. It is not only a chance to find a new revenue stream but also solves people’s real-world problems. However, there are steps that can not be missed before the product is launched, one of the most important steps being market research. With the tips outlined above, your market research efforts can prove successful.

Market research benefits

One way of knowing the importance of something is by looking at the benefits it provides. The good thing about market research is that it has some very good new product development-specific benefits that can impact the success of a product in a major way. Here are a few of them.

Eliminates guesswork on consumer needs

What do your target consumers think about your product idea? Does it meet their needs? These answers can be answered by conducting market research. If you go around guessing what consumers need, the end result is that you may come up with a product no one has any use for.

Provides a competitive edge

If you do not conduct market research, you might launch a product or service only to find that the market is flooded with similar offerings. When you conduct market research, you are able to incorporate ideas into your product design that will distinguish it from others in the market. It can also help you examine similar products and services in your target market that is not doing well or have failed in order to avoid mistakes that have the potential to doom your offering to a similar fate.

Helps determine price

How much are consumers willing to pay for a product like yours? Again, guesswork can only land you in trouble here. People always have price expectations, and marketing research helps determine what those are.

Provides feedback during prototyping

Showing a prototype to your target consumers and getting feedback is a great way to avoid costly mistakes. Your product might have an issue that might seem small to you but huge in the eyes of your consumers. Also, not only can customers point out mistakes in the prototype, but they can also point out opportunities that you can seize to make the product better and gain a competitive advantage.

So whether you are trying to develop a new product or service, market research plays a pivotal role in ensuring its success on local, national and global markets. Since your main goal is to deliver value to the customers in your target demographic, market research can offer insights into their thoughts and opinions, making it an invaluable process that should not be overlooked or underestimated.