Market research is a key component of every new product development strategy. This is because the goal of every new product development strategy is to launch the right product on the local, national and global markets in the most cost-effective way possible. In a nutshell, marketing research is what makes this process more effective, and we are going to tell you why it is important in a moment.
But before we get to that, let us talk a little more about market research so the concept sinks in.
What is Market Research?
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.
The Importance of Market Research
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 are 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, 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.