The importance of market research
Product life cycle
Have you ever considered how much research and thought is put into a new product that you find on a shelf in the supermarket?
Proper market research is important, and often underestimated, considering that your product will have to grab the customers’ attention in a matter of seconds as the eye moves along the shelf display. If the product has a strong brand heritage and a loyal customer base, the battle is easier, but it does not mean that it will remain in that position forever.
A product goes through a product life cycle. The product life cycle is divided into four stages: introduction, growth, maturity and decline.
The new product is launched during the introduction phase. During the growth phase profit margins are expected to increase and more money can be invested in the marketing of the product, trying to increase its market share.
During the maturity stage the product is well established and market share has been built. Thought should be put into possible product alterations and improvements as you do not want to alienate your loyal customers, but at the same you want to make sure that the competitive advantage is maintained. The last phase of a product life cycle is the decline phase. Product sales decrease and so does profitability. Customers might switch to a different product because it is newer, cheaper or perceived as better. For some products this means the end of the road, but for others it opens up the opportunity to enter a cheaper market or to allow for possible product extensions.
Product development
This is the phase where the idea and not the actual product is being tested.
• Product Concept Test: What product are you thinking of, who is your target audience, who are your competitors?
• Packaging Pre-Test: Testing proposed packaging design in terms of e.g. attractiveness, information visible on packaging, type of packaging material, size of packaging material.
• Product Pre-Test: Testing proposed new product in terms of certain characteristics. A good example would be a taste test, testing the e.g. smell, taste, texture of the proposed product.
• Advertising / Communication Pre-Test: Testing concept ideas designed by agency in terms of whether this resonates with consumers, whether the desired message and the actual conveyed message are in line with one another, the concept fits with the identity of the company or brand.
Product introduction
This is the phase where the actual product is being tested.
• Packaging Post-Test: Testing the packaging design once in the market or after changes were made on the pre-tested designed packages.
• Product Post-Test: Testing the product once in the market or after changes were made on the pre-tested products.
Product maturity
This is the phase where the product has been launched and established in the market.
• Usage & Attitude Study: To better understand buying behaviour of your customers, to establish awareness for your brand/product, to understand how your product is used and to establish the satisfaction, expectations and needs of the users of your brand/product.
• Net Promoter Score (NPS): Testing loyalty towards your brand/product.
If you have had this great idea to launch a new product onto the market for quite some time now, consider the above and do a little more research.
Who knows, it might be the product that everyone has been waiting for.
