Product research: What you need to know

Introducing a product to a market can pose both known and unknown challenges for any business. It makes sense, therefore, to remove as many obstacles as possible before launch. Product research can help with this.

Product research involves collecting and analyzing as much information as possible that is relevant to the product, then taking action to improve your product. The sources of relevant information can include:

• Market intelligence

• Consumer feedback

• Competitor information

A product must be economically viable, or the losses can be catastrophic and hard to recover from. Conducting effective product research is a key step before deciding on a product, whether it is a brand-new concept or already has equivalents in the market.

Product research is a continuous process undertaken through a product's life cycle to maximize profits.

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Product research can determine the likely success of a product. Failure to conduct effective product research will spell doom to even the most brilliant ideas.

Here's why product research is vital:

• It aligns market needs with business objectives

• It gives new products a competitive edge

• It helps you to understand market needs, wants, and desires

• It helps you know which areas to focus on

• Understanding consumer needs enhances creativity and innovation

The task of product research could be the responsibility of one person or the collaborative effort of a team. If carried out by a team, each member will have a designated role in the product research but ultimately works towards developing a product that meets market needs and is profitable.

The roles in a product research team include:

Product managers

Product managers align consumer demands and corporate plans. They assess market requirements to create a product vision and marketing strategy.

A product manager's primary role is to guarantee that product development decisions are made with reliable data and focus on consumer needs, wants, and desires.

Typical research methods employed by product managers include analysis of user behavior, product surveys, and competition studies.

Product designers

Product designers are responsible for creating a product that is not only aesthetically pleasing but also meets the needs and wants of prospective consumers. Product designers often need to understand the experiences, challenges, and thought processes of a typical consumer to create a product that will be successful.

To do this, product designers observe consumers using the product and employ other methods to better understand consumer needs, wants, and preferences.

Researchers

The primary role of researchers is to study consumer behaviors and motivations, and understand why they buy one product instead of another. Using behavioral and motivational information, researchers observe trends in consumer behavior and exploit them to give the product every chance of success.

Product researchers use qualitative and quantitative research methods to get data. From these findings, they recommend product specifications, and design and pricing strategies suitable for a target demographic.

Product research methods vary at different stages of a product's life cycle. A product's life cycle begins with the introduction of a product into the market, continues with its subsequent growth and maturation, and, finally, its decline.

• For new products: New products don’t have a history with customers, so their experience with them is usually unknown. You will have to conduct in-depth product research into the needs and wants of prospective consumers.

• For existing products: It is prudent to understand that consumer needs, wants, and preferences will have evolved and changed since the product was introduced to the market. This guide will help you consider what features need to be introduced in the next version of the product.

There are various methods of product research available to businesses. Each method offers unique advantages depending on the market, product type, and availability of a beta version of the product (if the product is new).

Ultimately, the choice of a product research method lies with the company and how they intend to approach the market.

The methods of product research are:

Concept testing

Concept testing is a form of product research where the producer creates a concept product and offers it to potential customers to gather information on their views. The concept tests the product's appeal and viability before fully fledged production takes place.

Members of the target audience are presented with the prototype and asked to provide feedback on various aspects of the product, such as its suitability to the purpose for which it was created, color, size, etc.

Price testing

Potential consumers are presented with a range of proposed prices, and feedback is gathered on preferred price points. The price must be attractive but also offer value for the features and benefits of a product. An optimal price is then chosen to maximize sales and profitability of the product.

Product tests

Product testing involves presenting potential consumers with a pre-production model or prototype and gathering information about the product’s usability and its general appeal to potential consumers. The product’s usability can then be optimized in line with the feedback from the product tests.

Focus groups

Focus groups are used to find out what experiences and perceptions people have with the product you are considering developing. This method can also be used to test and compare your product with others. You can gather information from these consumers about the features of the product, usability, what is important to them about the product, price points, and other factors.

Using the focus-group feedback, you can then develop a product that can outcompete existing products.

Focus groups can also help develop a suitable marketing budget and development strategy, which helps you decide where to spend.

Product demos

Product demos involve creating a test model of the product and demonstrating its use to potential consumers to get their feedback. A demo can also be in video form in the absence of a pre-release version of a product.

Product surveys

Product surveys determine how potential and existing customers feel about your product by asking questions and gathering feedback. These questions can include:

• What are your favorite product features?

• How satisfied are you with the product?

• How frequently do you use the product?

• How does the product compare to that of competitors?

Surveys can be sent via apps, emails, the product itself, or through the company website. They may also include follow-up questions. Conducting surveys through these channels is cost-effective and convenient for both the surveyor and consumers.

Product surveys can be analyzed against session recordings and heat maps to understand consumers' opinions.

There are many online resources and platforms for product research, and it can be confusing to choose the best one for your product. It’s worth investing time and money in comprehensive product research to really understand your product’s features, benefits, limitations, and potential market demand.

Some questions you can ask yourself to help you find this valuable consumer data include:

Who is the target demographic?

Target demographics are the groups of people who are most likely to use your product. Establishing a target demographic will help you better understand your potential consumer behaviors, needs, and preferences. Understanding the needs of the potential market will help enable your business to engineer a product best suited for the target group and maximize sales via a targeted marketing strategy.

To find your target demographic(s), use various techniques such as:

• Customer profiling

• Data analysis

• Market segmentation

What needs do my potential customers have?

Needs are the shortfalls of your pre-existing products. Identifying these needs will help a producer know where to focus their attention. Incorporating them into an upcoming product will give future products an upper hand in the market.

What do customers want in a product?

A “want” is a desired feature, function, or benefit in an upcoming product sought by customers. Wants are important considerations in product development because they determine the desirability and, therefore, the potential success of a product. The bottom line of a product's success is determined by its ability to meet consumer needs and wants.

A business will use various product research methods to determine product wants, such as:

• Focus groups

• Product surveys

• Product tests

What thoughts, negative or positive, do consumers have about a product?

You could interview potential consumers to evaluate their thoughts on your product and ask them to compare it to competitor products.

Customers' thoughts on the problems they face, how your product impacts them, and their perception of a product are all important aspects to know about. By engineering products to overcome functionality issues and pain points, you have an opportunity to increase your market share.

What behaviors drive the need for a product?

Consumer behavior concerns the way consumers think and how they go about their daily lives. Understanding consumer behavior is an integral part of product research as it enables the researcher to make a product more suitable for consumers’ daily lives.

Consumers' purchase behavior is also important. For example, do they purchase from a retailer or online?

Analyzing consumer behavior will help you to identify market trends and patterns, which, in turn, will inform product development.

Consumer behavior may also be influenced by external factors out of potential consumers' control. These can include social, cultural, and economic influences.

What motivates consumers to use a product?

Motivations are the drivers of consumer behavior. They are internal factors that influence a consumer's decision to purchase. A product researcher or producer must ask themselves what drives their consumer’s buying patterns.

The answer to this question will be a guide to engineer a product that meets consumers' preferences.

Consumer motivators include:

• Convenience

• Social status

• Cost-effectiveness

• Price

• Health

• Sustainability

Consumer motivation varies depending on income, product type, degree of need, and industry.

Qualitative and quantitative methods of product research are used to gather insights into the product’s prospective market.

Quantitative product research

Quantitative product research involves collecting numerical data from a target demographic or the potential market. This data is analyzed to establish the extent and level of consumer needs. The data can measure aspects such as the number of potential and actual consumers, and levels of consumer satisfaction, opinions, attitudes, and behaviors.

Qualitative product research

Carrying out qualitative research involves collecting and analyzing non-numerical data. Unlike quantitative data, the aim is not to measure the extent of an aspect of product research but to gain an in-depth understanding of people's thoughts, feelings, perceptions, and experiences of the proposed product.

Common areas of product research include:

Market research

Information collected on what’s happening in the marketplace can be varied. It includes:

• Patterns of product consumption

• Color preferences

• When consumers use your competitor’s products

• How they use them.

This information can help identify opportunities and threats for your product, and tailor marketing strategies.

Market research will also identify the size of the market, enabling you to plan sales and the potential profitability of the product.

Learn more about market research platforms

Customer research

Understanding user needs, wants, desires, and pain points will determine how you can develop the best product for the market. It will also help you create more relevant and compelling products, advertising messages, and sales experiences that will resonate positively with customers.

Learn more about customer analysis software

New product development

Whether it is a new entry into the market or whether there are similar products offered by competitors, you need a clear understanding of the market and a compelling and effective strategy to correctly position the product. 

Competitor research

Analysis of competitor information will be relevant to pricing, positioning, new product development, and marketing strategies. This research will highlight gaps that the new product should address to win over potential customers.

Segmentation research

Segmentation identifies target customer groups for prospective products. The market can be segmented by:

• Geography

• Psychographics

• Behavior

• Age

• Demographics

Understanding and targeting particular market segments can help you develop customer personas, which will help optimize the product’s offerings and features.

Concept testing

Presenting potential consumers with a concept product will generate feedback you can use to consider whether the concept should go into production. It will also suggest what improvements or changes could be made during production to increase the chance of sales.

Naming research

Naming research aims to find a catchy, memorable, and easy-to-pronounce name. Qualitative research techniques emphasize the need for potential names to be positive, culturally applicable, and sensitive.

Feature research

Feature research helps you to discover what features are most important to your consumers so they can be improved or introduced in an existing or new product.

The new and improved features should be incorporated into a product, but they should not compromise its efficiency, which is essential to consumers.

Pricing research

Pricing research compares your product with those of competitors in terms of functionality, features, and more. It helps you to ensure the product will be financially viable to produce and market.

Successful product research must be planned, executed, and analyzed effectively. The insights arising from well-executed product research are actionable, helping you to identify what needs to happen for a successful product launch.

To run effective product research, carry out the following activities:

Use accurate and unbiased data-collection methods

Product research should be centered on accurate data so that you get a realistic depiction of potential consumers. It must be reliable, so that the product meets consumers’ needs, wants, and desires. Collecting accurate, unbiased data is crucial to the future profitability of your product.

Conduct a thorough competitive and comparative analysis

Information about competitor products is key to product research. What would happen if a product is introduced into a market but cannot compete against similar existing products? 

Understanding the shortfalls of competitor products will help you address them in your new product and allow you to fill the gaps unaddressed by your competitors. This will give your product an edge.

Comparative analysis will help you know where to best channel your effort to out-strip your competitors.

Leverage existing research material

Research can be costly and onerous, and it can take time. Sometimes relevant data you’ve collected about potential consumers may still not be enough for your purposes.

Don’t forget that the internet is a rich hunting ground for information related to product research. Reliable websites and even business magazines can help you fill any gaps and provide you with useful background information.

Segment results based on business goals

How well you understand your target consumers is vital to the success of your product. Segmentation of your product-research results into categories of potential customers can help you to work out where your sales and marketing budget should be spent.

The stages of a product launch are:

1. Pre-launch planning

2. Testing and feedback

3. Soft launch

4. Post-launch analysis

Product research is vital to any product launch. Failure to conduct effective product research will likely lead to the failure of a product.

Product research can be conducted for any aspect of production, for example, the market, customers, pricing, production methods, etc.