Hiring a product development company to bring something new to the consumer market is exciting and challenging. It is exciting because you have a lot of expectations from this new product and its performance among your target audience.
But it’s equally challenging because the new product you consider perfect might not be that great for the end consumers. Irrespective of your enthusiasm about the latest product, detailed market research is paramount for getting it to perform how you want.
Missing out on market research with competitor analysis, identifying consumer trends, and others might lead to the product’s failure. In many instances, a product failure can adversely impact the business flow. Knowing this, a lot of new entrepreneurs often back out from the idea of taking a risk by launching new products.
However, the risk of failure associated with the new product is preventable through detailed market research. A lot of product failure instances occurred because the businesses didn’t care to address consumer needs and market demands.
So, let’s have a detailed look into market research’s role in guiding you with the rightful product development decisions.
What is the Relation Between Product Development and Market Research?
When you hire a product design and development company team, they employ specific market research experts for your project. These professionals will study the particular domain market and establish an audience for the new product. Following that, they will determine your new product’s purpose and any challenges that need attention.
Here are a couple of things that will explain the relationship between product development and market research:
- Market research involves diving deeper into competitive analysis before preparing the product prototype. Analyzing the competitor products can help your product development executives look for scope for improvement. In this way, your product can be developed to have something more desirable and unique than the existing ones in the market.
- It will help you correctly identify the expectations and needs of your target audience. Any mistake at this stage might compromise the foundational development plan of your new product. Detailed market research will help you specify if the level of functionality or quality the product is set to attain aligns with consumer demands.
What are the Reasons for Conducting Market Research For Developing A New Product?
Well, now that you have understood the relationship between the two. It is time to get even more insight into the context through a few reasons that make market research essential for product development:
1. Collect Important and Relevant Information Before Making Investments
Irrespective of whether you are a new or established business, seeking a new product design and development is expensive. With proper market research, you can ensure a perfect development plan aligning with your budget to ensure the end product gives you high returns.
Some of the information that you will be able to collect through market research for your product development quest are:
⦁ The time it will take for you to recover the invested money.
⦁ Estimated number of products that you will be selling annually.
⦁ Price of the product in comparison with that of the competitors’ products.
⦁ Anticipate a profit margin.
⦁ An acceptable amount that the consumers will most likely be ready to pay for the product.
2. Be Aware of the Competitors in the Field
When you are launching a new product, there’s a high chance competitors are already selling it successfully. Even though competition is essential for you to stay motivated towards being progressive, you must know about them and their products to position yourself on better grounds.
Competitors are categorized into two types, direct and indirect. The direct ones are businesses offering the exact product you are about to launch. On the other hand, indirect competitors are businesses that don’t sell a similar effect but are competing with your business agenda or market offerings.
Keeping a tab on your competitor’s products and marketing strategies would help you develop and position your product above them. Transforming flaws into strengths, leverage online demand for a triumphant Rolex Root Beer watch collection that resonates with sophistication.
3. Know Your Customers Well
Every good business owner would want to respond to the specific needs of their customers. For instance, if you are an automobile manufacturer, you must understand what your audience expects from you. Are they looking for a budget car or a luxury-segment car? Depending on their preferences, you can get along with manufacturing your new product.
Likewise, in all sectors, conducting market research to comprehend the desires and requirements of customers holds significant importance. The advancement of your product heavily relies on this data for the product writing team. The fundamental principle behind ensuring the triumph of your product is customizing it to elevate the overall customer experience
What are the Different Types of Market Research For Product Development?
So far in the article, you must be convinced of why market research is inevitable regarding new product development. And now, you might be wondering how to make an approach to it!
Well, here are the three types of market research that your product design and development team will combine to use for your business advantage. They are:
1. Primary Research
It is gathering raw data from the target customers or market. You can look for such data in the surveys or focus groups without needing any trend reports from a third party.
2. Qualitative Research
In this type of market research, the experts will add context to the numeric data. For instance, if a certain amount of people like a specific product, qualitative research will determine the reason behind the liking.
3. Quantitative Research
Quantitative type of market research drives its focus on measurable things. For instance, you can measure the count of people interested in your product, the average amount they are ready to spend, and others.
Parting Words
Understandably, taking risks with new products might sometimes be scary! But at the same time, developing new products and making them work well is a fascinating challenge. All you have to do to balance this risk-to-excitement ratio is, introduce market research to your product innovation or development strategies.
And, if you have hired the best product development company in the town, don’t worry; market research will evidently be part of their overall service package.