Market research is done to help firms get the most out of the time, money, and resources they put into product creation. They could also research to see whether their product is a good fit for the market or to broaden their target market.
By finding growth possibilities, market research may help firms with their product strategy. Businesses must evaluate how their product or service addresses consumer issues, how it differs from others, and how their rivals handle the same consumer demands while establishing a strategy.
Importance of Market Research for Product Development / Strategy
- Ensures efficient marketing: market penetration, segmentation, new market, customer experience, customer needs mapping, assessment, and so on.
- Provide help in launching the products that fit the market: Testing of new product concepts, prioritizing of important features, etc.
- Reduce the firms’ risk: Market research enables the firms to analyse the aspects of a market before launching or introducing a new product. According to a Harvard study, there are over 30,000 products launched every year and 95% of those products fail because of lack of market research.
- Helps in ensuring a competitive advantage: Market research helps in understanding competitors’ strategy and comes with a unique prospect to stay ahead in the market.
Role of Market Research in Product Strategy
- Understand the customer needs: The demands of customers in the target market must be prioritized in an ideal product strategy. Market research is critical in identifying and assessing these requirements. This information enables firms to comprehend the underlying consumer preferences as well as the commercial implications of the product strategy. The products may then be modified to precisely match the demands of the customer.
- Competitor evaluation: Businesses must understand competition offers to differentiate their goods from those of their competitors. Whether a firm can compete in the market is determined by its ability to catch customers’ attention as fast as possible. Brands may learn about their top rivals in various product categories by doing market research.
- Market entry opportunity identification: Market research may be used in product strategy to assess a firm’s market entrance chances. The research will assist firms in deciding whether to go for a market with strong growth rates or a mature market is a better fit. When entering a new industry, it is critical to go beyond market research and figure out what the target customers want. One of the greatest approaches to tackle this problem while designing a product strategy is to do a market research study.
Market Research in Product Development
Exploring the role of market research in product development.
- Understand the market through background research: Market research will help in understanding whether the product is viable or not for the market. The objective of the research in product development understands the need of the customers targeted and whether the product is a market fit.
- Ideation Creation: This is the first step in the product development stage. The primary objective of this exploratory study is to better understand market demands and assess whether there is potential for new product development or whether present offers can be improved.
- Concept creation for the product: Here, the new product features are decided, improvements are made for the products, etc. The primary goal of this research is to offer the end consumers an early taste of the new product and ensure product/market fit.
- Business case development: This is a stage where the technical specifications of the product will be decided, the breakdown of project planning, and target definition. Additional research may be necessary to assess the opportunity in terms of market scale and overall product viability.
- Development of the product: The focus of the research in this stage is on a small-scale consumer assessment of the product prototype.
- Test & Validating: A better knowledge of the product’s chances of success, especially the possibility of people purchasing the product, will be gained from research in this stage.
- Beta testing and analysis: Firms should beta test their product with their target audience after conducting initial market research and beginning development. Businesses will have sufficient data to discover market consumer demands and product development possibilities. The key goal here is to let a small group of consumers from the target market try out the new product.
- Launching and monitoring the product performance: Following the launch of a new product, it is advised that more research be conducted to assess the initial success and track the product’s position in the market over time.
Market research is important for more than just product development. Market research reintroduces long-forgotten customers into the spotlight. It detects consumer requirements and improves the firm’s future interactions with customers.
When it comes to product strategy the main objective is to have a deeper understanding of the product and any future modifications. This might aid in the revolutionization of an existing product or the development of a new and unique product.