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Aspiring entrepreneurs and business owners are constantly seeking new and innovative product ideas that can capture the attention of consumers and drive revenue growth. However, launching a new product can be a risky endeavor, especially if there is no solid research to support the viability of the idea. Market research is an essential tool for evaluating the potential success of a new product idea, and there are a variety of research methods that can be used to gather data and insights to inform product development decisions. In this blog post, we will discuss some of the most common research methods used to evaluate the viability of a new product idea.
Prospect Customer Interviews
Expert evaluation is a research method that involves seeking input from category experts actively involved in the industry where you might launch your product. The goal of expert evaluation is to obtain objective feedback from individuals who have a wealth of knowledge and experience in the relevant field.
When seeking prospective customers, it’s important to identify individuals who have a deep understanding of the industry, target market, and are decision makers in their organization.
When embarking on prospective customer interviews, it’s important to provide a clear and concise description of the new product idea and ask specific questions that can help to inform product development decisions. You’ll want to cover things like their thoughts on the overall appeal of the product idea, what are potential areas of differentiation compared to existing products in the market, how the pricing strategy compares to other products in the market, and how they would expect to purchase the product.
When reviewing feedback from research participants, look for specific insights that can inform product development decisions. This can be focused on features that were extremely well received versus those that weren’t. Or, it could include ideas on ideal price points and pricing strategies. Look for recommendations that are actionable and can be incorporated into the product development process to increase the likelihood of success in the market.
Competitive Product Analysis
In addition to talking to new customers, looking at competitive products can be extremely helpful for new product development for a number of reasons. To begin with, it helps identify gaps in the market. By analyzing the products and services that your competitors offer, you can identify areas where there is an unmet need in the market. This can help you to create a product that fills that gap, offering a unique value proposition to potential customers.
Additionally, this work lets you understand consumer preferences. By analyzing the features and benefits that consumers find appealing in competitive products, you can gain insights into what your target market is looking for in a product. This can help you to create a product that is more likely to resonate with your target audience.
Competitive intelligence also lets you explore pricing strategies. By analyzing the pricing strategies of your competitors, you can gain insights into what price points are successful in the market. This can help you to set a price for your product that is competitive and appealing to potential customers.
Lastly, this work helps with informing product positioning. By analyzing how your competitors are positioning their products in the market, you can gain insights into what messaging and marketing strategies are effective in your industry. This can help you to create a positioning strategy for your product that resonates with your target audience and helps you to stand out in a crowded market.
Online analytics, also known as web analytics, is a research method that involves the collection and analysis of data related to website and online user behavior. It can be a valuable tool for evaluating the viability of a new product idea as it provides insights into consumer behavior, interests, and preferences.
Web traffic analytics is a go-to option as it provides information about the number of visitors to a website, the pages they visit, and the amount of time they spend on the site. Analyzing this data can help identify patterns and trends in user behavior and what prospective customers find interesting.
Another leveraged area is social media analytics. Social media analytics provide insights into how users engage with a brand or product on social media platforms. This data can include metrics such as the number of followers, likes, shares, and comments. Analyzing social media analytics can help identify trends in user behavior and preferences, as well as potential opportunities for product extensions and innovations.
A typical research and analysis approach that often goes under the radar is sales forecasting. This is the process of estimating future sales of a product or service based on historical data and market trends. It is a valuable tool in new product development because it helps businesses to make informed decisions about product development, marketing strategies, and financial planning.
Sales forecasts provide a basis for financial projections, allowing businesses to estimate revenue and profit margins for a new product. This information can be used to create a budget, secure financing, and make informed decisions about pricing strategies and marketing budgets. Additionally, sales forecasts can help businesses to identify potential risks associated with a new product launch, such as overproduction or underproduction of inventory, inaccurate pricing strategies, or unforeseen market changes.
Furthermore, sales forecasts provide insight into the size and growth potential of a market, allowing businesses to make informed decisions about marketing strategies and target audiences. This information can be used to develop effective marketing campaigns and optimize advertising spending.
If you’re unsure about how to tackle this type of work, or are bandwidth constrained, consider leveraging a market research firm. Overall, a market research firm can provide businesses with valuable insights into market trends, consumer behavior, and competitive landscapes. By leveraging their expertise, objectivity, resources, time-saving capabilities, and cost-effectiveness, market research firms can help businesses make informed decisions about new product development and other business strategies.