Importance of Market Research for a New Product Before Launch

Market research is an important tool for any first-time inventor looking to launch a new product. This post explains the importance of market research for a new product before launch. In this regard, it briefly looks at the importance of market research for new products as it relates to understanding market needs and trends, customer preferences, and the competitive landscape. Thereafter, it looks in greater detail at the reasons for conducting market research for a new product. Given the importance of market research to the successful launch of a new product, it concludes by explaining how we go about conducting market research for a new product.

MARKET RESEARCH FOR NEW PRODUCT

Based on our vast experience in commercializing aspects of product development, we have dealt with many aspiring first-time inventors pursuing the reality of their dream invention. During that time, we have noticed how before engaging our services, most make it through the initial stages of the development of their new product, for example, coming up with a brand name, logo, and even a great product fairly easily. Unfortunately, many of them fail when it comes to launching and attracting prospects that ultimately become customers. Normally, and just in time, this is when we at LA NPDT often come to the rescue. When we design products, we not only think about the cost of manufacturing, but we also take into consideration the importance of market research for new product launch. Market research for a new product launch plays a crucial role in the success of a new product on the market before launch. For instance, it helps the first-time inventor or small business owner know just how much to invest for their dream or idea to come to fruition. Market research for a new product launch also provides knowledge of existing and possible competitors in possession of a similar product as well as trends in the market. In addition, it provides important investment information that it’s possible private investors need if they are to see the idea as an investment or funding opportunity or not. Lastly, market research for new product launch is, most importantly, needed to know the estimated number of possible customers for the new product in the marketplace. Once market research for new product launch has determined all this, then we and you can then design a game plan. Let us look in greater detail at the reasons for conducting market research for a new product.

Reasons for Conducting Market Research for a New Product

As mentioned earlier, there are various reasons for conducting market research for a new product. They are so that you…

Know Before Investing

Coming up with a new product is a very expensive undertaking for a first-time inventor. As such, market research is vital if a budget, game plan, and measures are to be put in place to guarantee a Return On Investment (ROI). Typically, this includes going through a checklist of questions, such as:

• How much will the total project cost?
• How much will customers pay for the product?
• How much is the product price compared to that of competitors?
• How much is the total cost and the anticipated profit margin?
• How many products are likely to be sold annually?
• How long will it take to get back the money invested in the project?

Know Your Competitors

Herbert Hoover said, “Competition is not only the basis of protection for the customer, it is also the incentive to progress.” To get to know your competitors, you have to identify the types of competitors for your invention. Firstly, there is the direct competitor. These offer the exact new product or service you are offering to the consumer. Your second type of competitor is the indirect competitor. This one does not directly offer the same product, but competes alongside what you are offering the market. An example is a piece of gym equipment, with a wellness clinic as its indirect competitor. The third one is an emerging competitor. This competitor will appear sometime in the future. Still using the gym example, an emerging competitor could be a virtual gym or a wearable piece of fitness technology. When your customer starts using this technology, they no longer need a personal trainer or go to the gym.

Know Your Customers

A good inventor or innovator responds to what customers need and want. If, for example, before inventing or selling wheel mags, a clever inventor or entrepreneur will research what the market or customers want on their cars. Only when you have found out this can you proceed to invent or source the product or type your potential market/customers want — not what you want. So, if customers want titanium wheel mags with an aluminum alloy, then that is what your customer must get to ensure a responsive market and a great client experience.

Know Market Trends

Trends in the market can refer to a pattern, style, or leaning toward a preference or choice by customers. They are analyzed using three different time frames. Secular trends refer to market activities that occur over the long term, usually five to 25 years. Typically, such trends are in the technology sector, for instance, the mobile phone industry. On the other hand, primary trends are medium-term trends lasting a year or more. Examples of such are holiday seasons and fashion trends. Lastly, short-term trends last from a few weeks to months and generally encompass current events and social media trends. Knowing trends and successfully determining how they last is vital in creating a suitable product and launching it at or within the right time frame. For these reasons, conducting market research for a new product is vital.

Conducting market research for a new product

Knowing how to conduct and conducting market research for a new product are, in our view, most important. This is particularly important since well-carried-out marketing research helps companies like ours and you, our client, prevent costly mistakes. As we are a product design and development company that helps inventors and entrepreneurs bring ideas to life, there is nothing more painful than to consult with an inventor who has an invention that was not market researched. Such a product often lacks customers despite costly advertisements and promotions. Eventually, the result is product failure. Market research can take many forms. At LA NPDT, our goal is to collect enough data to be able to process it and decide if there is a pattern in the behavior of a certain group of consumers. When conducting market research for a new product, we carry out some of ours through surveys, focus groups, surveys, and the collection of behavior data — to name but a few.

Surveys

When we last surveyed a group of millennials, we found that younger consumers have a higher tendency toward a healthy lifestyle. For instance, they were concerned about their diet, calories, and daily intake of sugar. As a result, we used this information to advise one of our clients, who eventually launched a new diet product line. However, this is not to say getting market research after a product launch is also not possible. Sometimes, it is a great way to acquire feedback on the success of the product and changing consumer preferences.

Focus Groups

Conducting a focus group is a good method of conducting market research for a new product because it primarily focuses on discussion within small groups of people. The discussion is based on a set of questions whose goal is an in-depth understanding of the research question. A great example is how when two business partners-cum-inventors wanted to create a platform that revolved around the easy sharing of podcasts, they turned to focus groups to better understand what social media users needed. They focused their discussion on what aspects of Facebook they were not happy with and discovered that most responses pointed to the need to improve the newsfeed, which was too difficult to keep up with. From their focus groups findings, the two then came up with a new streamlined platform that people could share news, entertainment, opinions, and articles in 140 characters or less — they called it Twitter.

Behavior Data

The key to conducting market research for a new product using this method is to predict the consumer’s actions and desires based on their current or past habits, spending patterns, and behavior. This information can be acquired every time a consumer orders an item online, repeatedly visits certain websites, or even when they visit a restaurant. For instance, a big pharma brand’s subsidiary uses Facebook’s Messenger app to make targeted recommendations of a variety of pregnancy and childcare products based on user input. If, for instance, a user inputs teething problems, the algorithm suggests solutions such as teething gels or chew toys. During the process, what is important is that information about the child’s age is collected. Thereafter, the user then gets targeted suggestions for age-appropriate products like clothes, toys, or baby food that are also available.

Conclusion

The importance of market research for new product launch cannot be understated. At LA NPDT, we are with you, from patent registration, concept design to prototyping, and the conducting of market research for your new product. Our expertise and hands-on experience in market research for a new product launch are the difference between the success and failure of your idea or product launch. CALL US TODAY to schedule an appointment!