WHY MARKET & PRODUCT STUDIES

A correctly done new product or market study can mean the difference between profitability and failure of the new product release.

MARKET VS. TECHNOLOGY IN DRIVING PRODUCT DEVELOPMENT

Companies generally take one of two paths to new product release:

1. New technology driven
2. Market demand driven

Technology advances enable the design of new products, many of which are released to market with limited market assessment. Engineers are able to understand usage implications and product potentials in ways that the general public cannot, so it would be difficult for marketing research to define desire and demand for many unknown technologies.

In many industries and economies, just because technology allows evolutionary or revolutionary features does not insure customer demand for the product. In this case, marketing research is critical to define in advance overall demand and expectations.

UNDERSTANDING THE MARKETING PLAN BEFORE GOING TO MARKET

The most common mistake is one made by companies that do not sell directly to the final customer. They either manufacture component parts for the firm that makes the final product or they rely on distribution channels to sell to the end customers. By being removed from communication with the end customer, they must rely on a third party to relay satisfaction, expectations, trends and changing needs.

Often such firms decide to develop a new product or enter a new market, and complete R&D, releasing the product to market before understanding the market. Then they are forced to discover the market's real expectations and refine the product's business plan while already in the marketplace. They may change pricing or distribution models, or recognize the need for revised product features. Most products released in this manner end in failure - The financial burn rate is too high because overhead eats up budgeted funds before sales hit the needed level.

CONTACT US to help make your research the key to your company's future.