What is product research? Why do companies need to do this before launching new products in the market? How can they do this, then? Let us know more about this below.
Product research refers to the undertaking of activities to obtain basic information about a product. It is a common practice in management and marketing wherein the product is analyzed and evaluated before it is marketed. The purpose of product research is to find out how the target audience would react or would respond to a specific product. This process helps in understanding the current market and how it can be improved upon.
Product research phase
The product research phase involves several steps. Research may involve an in-depth study, interviews with customers and experts, or even a test market. This information is then synthesized into a report that will be used in deciding on whether or not to launch the product.
Research may be qualitative or quantitative. Qualitative research refers to the gathering of information through observation, interviews, and focus groups. And other techniques that provide a deeper understanding of the consumer’s responses to products or services.
On the other hand, quantitative research provides information about large populations. This is through surveys and questionnaires that are more general.
Companies usually conduct a market research first before they decide on what kind of consumers will purchase their products. Market segmentation is an important part of this phase wherein potential customers are divided into smaller groups that have similar needs, wants, or requirements.
So, through this market segmentation process, companies can come up with an effective marketing strategy for their products.
After going through all these steps, companies then have to decide on which position their products will hold in the market. Whether it will be unique or different from competing products and what image they want their brand to take on in the eyes of consumers.
Then, this phase is very important since it can help companies avoid many common mistakes when launching new products into the marketplace such as:
- lack of proper market analysis,
- poorly defined market needs,
- lack of support from management,
- failure to include key personnel in the decision making process,
- failure to develop a strategic plan,
- making decisions based on assumptions instead of facts,
- and so on.
Then, some companies also create a new brand every time they launch a new product. Because they think having a new brand would improve sales. But this is another mistake as it can cause confusion among consumers and make them question the company’s credibility.
The importance of this is undeniable. Firstly, it allows companies to know what the market needs. It helps them identify gaps in the market and avoid costly mistakes. It can also add value to the company by allowing it to exert more control over the product development process.
Finally, it allows companies to know what the consumers are expecting from them to increase their sales. So, if you are planning to launch a new product, it is best to do some research first. Because it can be a great help in the long run.