The right kind of market research can ensure that you reduce the risks of failure. While market research was deployed towards the end of the product development stage, there is adequate proof of the fact that if you research the product launch at the ideation stage or even before that, you are likely to reduce the risk considerably.
This means that if you have researched the market and competition carefully, you will know the specific niches that are too competitive. In addition to that an exploratory market research conducted to understand the needs of the consumers can help you start the research and development in the right direction. This means that you can increase the return on investment on the dollars spent on R&D too.
When you use market research at each stage in the product development process you ensure that you are not just creating a product but a customer experience that has its seeds in customer need in the first place. Some of the questions that need to be answered include the specific need that the product solves, whether the product is a ‘must have’ or just another option, who the target audience is, the positioning that is likely to resonate with them and the price at which the target customer will buy.
The product development process starts with an evaluation of the market - the competitiveness, potential, growth opportunities, scope of expansion and the like. Post an analysis of the market, companies should get into an evaluation of their strengths and weaknesses in the areas that they are getting into and what the new launch adds to the company and the business.
The Stage Gate Process is considered to be the 5 step product development process that includes:
- Idea generation
- Idea screening and evaluation
- Business analysis
- Testing and commercialization
The business analysis may require you to take on a slightly more complicated research that can help you estimate the volumes and growth based on specific inputs.
While there are various market estimation models that exist, the estimation is as good as the inputs that you provide with regards to marketing, logistics and distribution.
The development stage may require a few rounds of market research as the research and development fine tune the prototype of the product that is being created. This may involve an in-use or at-home product testing or product testing at a venue depending on the specific product in question.
Before commercialization and final product launch, there are aspects other than the product that need to be researched. These include promotional material, positioning statement, advertisement and packaging, if applicable.