Market Research Plays a Vital Role in Product Development

In order to effectively manage the product development process, many businesses use market research to drive down the risks. This approach requires a systematic approach that outlines the exact steps from the initial stages all of the ways through to post-launch. The mistake that I see so many entrepreneurs make is that they develop products or services without doing the proper research. However, even the most innovative idea will not sell without a market.

That makes market research vital to the product development process. Let’s take a closer look at product development so we can see the role that research plays.   

Market Research Plays a Vital Role in Product Development


Market Research Plays a Vital Role in Product Development

Pre-Production: Customers Will Lead the Way

Customers are not going to generate new product ideas directly, but they will provide valuable feedback and opinions that might indirectly influence an idea. It’s important that you listen to what they tell you.

You can use social media to track conversations from your target market and set up customer review systems that capture feedback. Both are the best ways to allow customers to lead the way.

All ideas need to be screened by your target market before you go into production. Just post a question on social media and see what the reaction of your target market is.

Step 1: Concept Creation

You will find that most of the ideas you generate don’t make it through the pre-production phase. That means when an idea makes it to this point, then it likely holds real value. With that said, you still need to run it through concept-testing. Market research ensures that the idea is sound.

Use market research to…

  • Gauge your target market’s first impression.
  • Learn what they like/dislike about the idea.
  • Find out if they are aware of similar products/services.
  • Gauge their likelihood to purchase it.
  • Find out how much they are willing to pay.

Step 2: Build a Business Case

Your idea has passed through two important testing phases now so it’s definitely on the right track. At this stage, you will need to build a business case for the idea. This is done by detailing three specific aspects.

  • Product Description: Purpose, technical specifications, etc.
  • Project Justification: Market size, potential, etc.
  • Project Plan: Exact steps from development to launch, costs, sales goals.

Businesses generally pull information from the market research performed during the concept-testing stage to build this case. However, you should also look at competitors to see what they charge, market size, and see how they describe their products/services.  

Step 3: Product Development

Your goal should be to build a prototype so that users can review it. Any market research that is done at this stage should be limited to customer reviews. Set up a testing system and get consumers to leave reviews. It’s vital that you identify flaws now.

Service-based products work in much the same way as physical, the only difference being that you would offer a substantial discount in the beginning and only take on a limited number of targeted clients.

How to Determine the Type of Market Research Required

Product development requires two different types of research – qualitative and quantitative.

Qualitative Research: Used to gain a deeper understanding of unmet needs that your product or service are designed to solve.

Quantitative Research: Once you have identified the unmet needs that your product or service will solve, you will need to measure its demand using numbers.

Conclusion

Market research is an important part of product development. Without information, you could potentially use up valuable resources to go through this process only to find that there is no market for your product or service.

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