Have a brilliant idea for a new product?
You probably also have a lot of questions like:
- Who would buy my product?
- What audience(s) should I target?
- What products are competitors?
- What’s the market share for competitors?
- How much should I sell my product for?
- How should I promote my product?
A new product feasibility study answers these questions and other key performance indicators.
Furthermore, as a product/service distributor, you need to always be thinking of innovative strategies to promote your offerings. Research shows that roughly 43% of professionals think innovation is a key ingredient in any product launch.
Keep reading as our market research company defines new product feasibility studies and how to conduct them successfully.
What is a new product feasibility study?
The objectives of this type of market research often include obtaining insight on:
- Product placement
- The target market
- Marketing and advertising
- The competition
- Pricing strategies
There may also be several secondary objectives included in the feasibility study report, depending on your company's needs and specifications.
When our new product feasibility studies company conducts this type of market research, we recommended incorporating five different components.
The five components include:
- Demographic analysis
- Competitive assessments
- Pricing analysis
- Online surveys
- Stakeholder interviews
We’ll dig into each of these later in the post!
💡 The Key Takeaway: A lot goes into a feasibility study–especially when it’s for a new item. At its core, no matter how you conduct it, a feasibility study delivers insight into how items will fare once on the market.
Why are new product feasibility studies important?
With the failure rate for new products ranging from 70% to 80%, businesses need to know who will actually purchase the item.
Therefore, companies conduct a new product feasibility study to prove demand for the new product and provide data-based recommendations for the next steps when entering the market.
Oftentimes companies allot space in their budget to spend money on new product development research to assure they will earn the highest return on investment possible.
Another important piece is to have a third-party market research company conduct the new product feasibility study.
This reduces bias when designing the research, analyzing the results, and creating recommendations.
There are many benefits of using a third-party market research firm, one of which includes having a fresh pair of eyes to review feedback and data. This reduces bias when designing the research, analyzing the results, and creating recommendations.
💡 The Key Takeaway: High ROI and bias reduction are major benefits to conducting feasibility research with an outsourced team.
What type of information does a new product feasibility study collect?
A new product feasibility study collects both primary and secondary research.
Primary research is newly designed for the specific project at hand.
It collects new data and information to meet the goals and objectives of the study.
This type of research is original and has a lot of moving parts. For example, primary research is when a brand conducts a project on its own, or with the help of an outsourced team (we suggest you go that route).
This is your own personal research, for your own business needs. Think fresh and customized.
Here are just a few benefits of primary research:
- You own the data: Yep, it’s all yours. This is ideal for comparing new research with past projects you’ve run.
- It’s relevant: As we said above, primary research is fresh! No outdated stats here.
- You can target what you want: You’re the boss–customize your research how you want it.
This research can be conducted in a variety of ways, including online surveys and stakeholder interviews.
Instead of new data as someone would receive with primary research, secondary research is information that already exists. More often than not, this research will be used in larger research projects.
It’s a great way to bolster a project, along with primary research.
These are some benefits of secondary research:
- You have a lot of data to choose from: Plenty of secondary data exists, you just have to narrow down where you look.
- You can do it with a third party: This ensures the data collected is reliable and relevant
- Often less expensive
- Offers context: You can bulk up your primary research with secondary sources
Combining both of these research methods into a feasibility study yields the best results.
Secondary research for a feasibility study typically includes a demographic analysis and desk research.
💡 The Key Takeaway: Primary and secondary research both play important roles in feasibility studies for new products. They each offer unique insight that can be beneficial for shaping new product perceptions.
What are the components of a new product feasibility study?
Below is an overview of what’s included in each of the five components of a new product feasibility study.
Component #1: Demographic analysis
A demographic analysis assesses the information gathered by the U.S. Census Bureau and other reputable demographic data collection sources.
This component often includes:
- Population assessments
- Race and ethnicity breakdowns
- Gender breakdowns
- Age groups breakdowns
- The number of people in households
- Presence of children in households
- Household income
Component #2: Competitive assessment
A competitive assessment assesses what is currently on the market.
This typically includes investigating each competitor to better understand offerings, price points, and marketing strategies.
Ultimately, these findings are summarized in a feasibility study report. They’re used to provide recommendations for the next steps when entering the market.
Component #3: Pricing analysis
A pricing analysis looks at the pricing of the competition and uses survey data to shed light on how much consumers expect to pay for the new product.
Component #4: Online survey
The online survey piece helps shed light on a multitude of factors such as:
- Awareness of competitors
- Interest in the new product
- Target audiences
- Best ways to market the product to consumers
Typically these surveys include 20 to 25 questions and take 3 to 5 minutes to complete.
Component #5: Stakeholder interviews
Stakeholder interviews are great at answering questions when it comes time to dive into specific questions about the next steps, marketing, and what makes the product more or less appealing.
Typically these interviews last 20 to 30 minutes and provide great insight to support the quantitative data findings.
For more insights, watch our video on tips for product development research.
💡 The Key Takeaway: There are 5 major elements that go into a feasibility study for new products. From analyzing demographic data to stakeholder interviews, each element plays a role in project success.
As you now know, conducting feasibility study research is essential when launching a new product.
Drive Research is a national market research company that partners with brands across the country to conduct new product feasibility studies. Whether you are looking to utilize a few or all of the components mentioned in this blog post, our team can help.
Contact us today to receive a project proposal or quote!
- Message us on our website
- Email us at [email protected]
- Call us at 888-725-DATA
- Text us at 315-303-2040
As a Senior Research Analyst, Emily is approaching a decade of experience in the market research industry and loves to challenge the status quo. She is a certified VoC professional with a passion for storytelling.
Learn more about Emily, here.