The Role of Market Research in Product Development and Innovation
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Introduction
The role of market research in product development and innovation cannot be overestimated. Market research helps marketers to make enquiry about the past and probe into the future to yield customer conversion. It serves as the torchlight in the dark corners of market spheres and in developing and innovating product processes.
When marketers comprehend the structure of the market, the main competitors, and the target audience, it makes it easier for them to creatively design products that meets with the exact needs of the consumers to make them achieve product development. Market research allows marketers to have in-depth analysis about the factors that affect the buying behavior of the consumers and how to price tag the newly developed products to propel your target audience. Both qualitative and quantitative data are used in creating products which are capable of meeting the consumers’ needs and integrating their motivations. In essence, market research helps marketers to discover the loopholes in the market and where to sales are declining to effect innovations to help develop a product.
How to understanding Customer Needs and Wants
The following talks about how to understand the art and science of consumer needs in developing and innovating a product;
Identifying Unmet Needs
Customers’ unmet needs has to do with the wants and the desires that are currently unmet by the existing products or services. In developing and innovating a product or service, the first essential step to take is to identify the customers’ needs to unveil the unmet desires and inconveniences which happened by the reason of the existing products in the market place, these unmet desires can be unveiled through the lens of consumer behavior, consumer feedback, proper market research, etc.
Estimating Demand
Estimating demands deals with the process of predicting the major sales volume for products and services at an agreed price. This action is an important one for market research in developing a product, planning a business and allocating resources. It makes use of the Market Size and Share, Analogy Method, Customer Surveys, Landing Page Experiments, Market Testing, Pricing Research, Market Trends techniques to estimate demand.
Customer Segmentation
Customer segmentation deals with the process of determining customer demography, behavioral data, and psychographic information, creating groups according to their perspectives, their personality, and what makes them. This concept enables organizations to use direct message to drive positive results
Informing Product Features and Design
Concept Testing
Concept validation reduces risk, resonates with the target audience’s needs and wants, and builds confidence in product development and innovations. It is an act of validating or testing your idea to know if it can withstand the market competitions and to detect if it can meet the unmet needs of the target audience before blowing its trumpet market space.
Prioritizing Features
Prioritizing features help marketers to align with the market strategy, focus on value, gather input, solve real problem through customer centricity, make data-oriented decision. Prioritizing is the focal point of product development and innovation with diverse list of appealing features using Moscow techniques and rice scoring approach.
Competitive Analysis
Competitive analysis involves delving deeply into knowing all the feasible features of your competitors. It deals with having a full knowledge of the companies you are competing with in order to design appropriate strategies that suits your business operations. Competitive analysis involves the following:
Recognize your competitors: The first thing you need to tackle is to recognize whom your competitors in the market place. Competitors are companies, organizations, business individuals who are selling what you are selling or who are offering the same service you are offering. In other words, they are direct competitors who compete the same audience with similar products or services with you, or indirect competitors who offer different products or services but seek to offer satisfaction for the same needs.
Inquire strategic plans: So long you have been able to identify whom your direct and indirect competitors are, the next thing to do is to probe into their strategic actions such as considering their products or services, their price tags, their marketing strategies, how they go about branding their businesses, to the point of knowing how they review their customers feedbacks.
Know your competitors’ strengths and weaknesses: Evaluate what your competitors are doing well more than you, and the areas they are lagging behind. Strengths could be areas like a strong brand reputation or a unique product offering. The strength and weaknesses could vary from one brand to the other, but the most important thing is to be able to convert them as your stepping ladder to rise above your contemporaries.
Unveiling opportunities for your brand: In a bid to researching into the pluses and minuses of your competitors, it becomes easier for you to discover opportunities that step up your own business.
Make smarter choices: The whole big idea of competitive analysis is to make smarter decisions which will give your business/brand a greater push in the market place. If you are being able to underscore where you stand afar of to your competitors it will be easy to smarter decisions about pricing, product development and innovations, marketing strategies, and pricing.
Reasons for competitive analysis
- It gives you clarity about the how the industry you are in operates and to know how to handle your competitors professionally.
- Competitive analysis enables you to discover the benefits of market competitions by distinguishing yourself from the majority.
- It makes you learn well about what your competitors are doing right to help improve your marketing strategies.
- Competitive analysis gives you edge above other market competitors.
Summarily, a competitive analysis is an undeniable parameter for any business owner or marketers to excel. Regular analysis of your competitors will make you access information that will help improve your business and attain your goals.
Forms Of Research to Aid Product Development and Innovation
One-on-one Interviews
Right from time, market research companies would conduct Vox pop interview i.e. carry out interview on the street concerning the newspapers and magazines which they read regularly and inquire whether they were able to remember any of the adverts or brands that were published in them. Information collected from these interviews were compared and contrasted to the distribution of the publication in order to tell the effectiveness of those adverts. Marketing research and surveys originated from these early techniques. To have a a better and strong understanding of your market, it’s important to understand the market demand, market size, economic pointers, the location, market exploration, and pricing.
Internet Market Research
Marketing research activities have shifted online due to the fact that people now spend more than enough time online, Data gathering make use of the style of survey form. Meanwhile, instead of companies and business organizations to be actively seeking for participants by searching for them on the street or cold calling them through the phone, the target audience can decide to sign up, engage surveys, and provide opinions when they are available.
This makes the procedure more protective and less rushed, so far people can engage their time and on their own volition.
Selected Groups of People
A selected group of people is a small number of representative consumers chosen to try a product or watch an advertisement. Afterward, the group is asked for feedback on their perceptions, opinions and views of the product, the company’s brand, or competing products. The organizations then peruse the information and takes decisions about knowing what to do with the product /services, whether to release it, or probably make changes, or abandon it.
Telephone Research
A telephone interviewer gathers information in a more proficient and cost-effective manner.
Telephone research was a preferred strategy of market researchers for countless years. It has now become much more interesting in recent years as landline phones and is replaced by more accessible mobile phones.
Survey Research
As an alternative route to the focus samples, survey research represents a cost-inclined way to detect consumer attitudes without having to carry out interview for anyone in person. Consumers receive surveys in their mail inbox, usually with a voucher to encourage participation. These surveys help to gather suggestions on how consumers feel about the product, brand, and the price point.
Benchmarking
Benchmarking is defined as the process of rating the performance of your business operations against competitors in the same market place. This helps you to comprehend the strength and weakness of your business performance. Benchmarking has diverse benefits which include
Setting goals and performance expectations
Evaluating your performance and maximizing market changes proficiently.
Comprehending your competitors to become more competitive strategically
Identifying and prioritizing the areas of your business/ brand that needs improvement
Understanding the unmet needs and wants of your customers well
Discovering your strengths and weaknesses.
Feasibility Study in Product Development and Innovation.
What is the meaning of a Feasibility Study?
Feasibility study is defined as a comprehensive evaluation of an intended project which evaluates all factors essential to its success in order to assess its likelihood of success. Business success can be defined basically in terms of ROI (Return on investment), which is the amount of profits that is being generated by the project. Feasibility study examines a project’s or system’s practicality. As part of a feasibility study, the rational analysis of a potential business or venture is carried out to determine its strengths and weaknesses, potential opportunities and threats, resources needed to carry out, and ultimate success prospects. Two different perspectives should be considered when dissecting feasibility which are (1.) the required cost and (2.) expected value. In a feasibility study, a proposed project is evaluated for its practicality. As part of a feasibility study, a project or venture is estimated for its viability in order to determine whether it will be successful or not.
As the name implies, a feasibility study or analysis is used to detect the authenticity of an idea, such as ensuring a project is legally and technically feasible as well as economically justifiable. This concept helps us whether a project is worth the commitment in some cases, a project may not be worth embarking upon. Various reasons can be responsible for this, including requiring countless resources, which do not only obstruct those resources from acting out other duties but which is also likely to cost more than a company or an organization would gain by embarking on a project that is not profitable. A well-planned research study should seek to provide the origin the business or project, which includes description of the product and service, account reports, overview of operations and management, policies of marketing research and financial data, law requirements, and tax responsibilities. Universally, such studies come up before the technical development and the implementation of other project.
Types Of Feasibility Studies
The results of the feasibility study are used in real-time to establish business plans and budgets. Without a feasibility study, it is difficult to understand whether a proposed project is worth continuing.
Legal feasibility
Legal feasibility determines whether any aspect of a proposed project conflicts with legal requirements, such as local laws, data privacy laws, and social media laws. For example, when an organization wants to build a new office building in a specific location, a feasibility study may show that the organization’s ideal location is not suitable for that type of business, so the organization saves reasonable time, resources, and effort. I did. Their project wasn’t feasible before they started.
Technical feasibility
This type of feasibility study focuses on the technological resources available to the company or organization. This helps organizations understand whether their technical resources match their capabilities and whether their technical teams can translate ideas into working systems. Technical feasibility also refers to the evaluation of the hardware, software and other technical requirements of the proposed system. To give an exaggerated example, your organization probably doesn’t want a Star Trek transport plane in their building. This project is currently technically impossible.
Economic feasibility
Economic feasibility involves evaluating the costs or benefits of a project and helps a business organization determine the viability, costs and benefits associated with a research effort before committing financial resources. It also serves as an independent assessment of the project and increases its credibility, helping to make decisions that determine the positive economic benefits to the business organization that the proposed project will deliver.
operational feasibility
Operational feasibility involves conducting studies to investigate and evaluate how well the organization’s needs can be met by completing a project. The study also examines how the project plan meets the requirements specified in the requirements analysis portion of system development.
Feasibility Planning
A feasibility plan is the most important study for the success of any project. If a project is not completed on time, the project will fail. In a feasibility plan, a business organization adds up the total time required to complete a project. Benefits of Validity
This narrows the scope of your business search.
Define a compelling reason for starting the project.
Evaluate multiple parameters to maintain your level of success.
This will help you make decisions about your project.
If necessary, identify reasons for observing breaks.
This enhances the project team’s goals.
Opens up new possibilities
Offers you the information you need to take more informed decisions.
What should be included in the feasible report
One of the most important steps when starting a business is conducting a feasibility study to determine whether your business concept is marketable and can withstand the test of success. When conducting a feasibility study, there are several parameters to consider, including the competitiveness of the product or service, competition, financial stability of the company, etc.
Identifying Trends
Product Positioning and Pricing
Market Positioning
Market Positioning involves the ability to persuade consumer perception concerning a service or product similar to competitors. The main aim of market positioning is to create the reputable image or reputable personality of a service provider or product so that the target audience can embrace it without options.
Positioning strategies include the following;
The attributes your brand/product and the benefits it offers
Your brand/product price tag
How quality your product is
Your brand/product use and application
A Perceptual Map in Market Positioning
A perceptual map is an indicator to show consumer perception about certain brands/products. Perpetual map allows you to discover how competitors are placed in close contact to you and to explore opportunities in the marketplace.
Conclusion
In conclusion, market research remains a powerful marketing tool to bring to limelight the preferences, needs, pain points and desires of your potential market audience. It reveals market trends, competitive feasible features, and change in demography which can prominently influence the acceptance of your brand/product by the customers. It also involves the process of forecasting the future by evaluating the past, present and the future.
Get Started
Call-to-action to contact for a consultation
Tel: (+234) 802 320 0801, (+234) 807 576 5799)
E-Mail: info@qeeva.com
Office Address: 5, Ishola Bello Close, Off Iyalla Street, Alausa, Ikeja, Lagos, Nigeria.
FAQ
How does market research impact product development and innovation?
It serves as a communication channel between companies and their target audience.
Market research helps businesses identify unmet needs, emerging trends, and customer issues, which drives product development and innovation. This knowledge becomes the basis for the development of innovative products that solve the real problems of customers.
- Identify market gaps: By analyzing the competitive situation and consumer preferences, you can identify market gaps where your innovative products can differentiate themselves from others.
- Product Idea Validation: Don’t waste resources developing products that nobody wants. Market research allows you to test and refine product concepts with real customers before full-scale development.
- Communicating features and functionality: Understanding customer features, functionality, and design preferences helps create truly valuable and user-friendly products.
- Setting the right price: Market research can help you determine the optimal price point for your product based on customer value perception and competitors’ prices.
What general market research methods are used in product development?
- Surveys: Collect information from a large sample through online or offline surveys to understand customer preferences and opinions.
- Focus Groups: Facilitate conversations with smaller groups of potential customers to gain deeper qualitative information about product concepts and features.
- Interviews: Conduct in-depth interviews with target customers to understand their decision-making processes, needs and pain points.
- Competitive Analysis: Analyze competitors’ products, marketing strategies and customer reviews to identify areas of differentiation and innovation.
- Social Media Listening: Track online conversations and social media trends to understand customer sentiment and identify new needs.
How can companies use market research in continuous innovation?
- Take a customer-centric approach: Put your customers at the center of your innovation process by constantly gathering feedback and iterating on their needs.
- Conduct regular market research: Do not limit market research to the early stages of a product. Regularly gain knowledge to adapt your products and stay ahead of emerging market trends.
- Monitor customer behavior: Monitor customer behavior after product launch to identify areas for improvement and opportunities for future innovation.
- Invest in agile development: Combine market research with agile development methods to quickly and efficiently test and refine product concepts.
What are some examples of successful companies using market research to innovate?
- Apple: Apple conducts extensive market research to understand customer preferences and design innovative products that seamlessly integrate with users’ lifestyles (e.g. iPhone, iPad).
- Netflix: Netflix changed the entertainment industry by using market research to identify growing demand for convenient on-demand content and develop its successful streaming service.
- Amazon: Amazon continuously collects customer data and feedback to personalize product recommendations, improve search functions and implement innovative features such as voice-activated shopping with Alexa.
Pricing
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