Market Research For New Product Development

product development research written on a notebook

Organizations often depend on new product development to stay competitive within an industry.

While the process can be challenging, and oftentimes lengthy, new products and services allow organizations to grow and further expand their market reach.

With roughly 40% of new products never making it to the shelves, this type of market research becomes imperative.

In order to ensure the time and cost invested in new product development doesn’t go to waste, it is essential organizations make informed decisions based on actual market opportunity and customer insights.

Market research provides project teams with these insights and guides each product development and design activity.

In this blog post, our new product development research firm will discuss the two major phases of research we conduct with clients who are looking to expand product or service offerings.

We will also answer what research methodology is most important for the new product development process to help narrow down your choices!

Why Conduct New Product Development Market Research?

Research captures customer preferences, allows your organization to understand the end-user experience, and prioritizes the “wants” and “needs” of a target audience.

Ultimately, conducting market research throughout the product development process is critical to gauging market demand and ensuring that the final product meets the demands of the user.

While most market research is typically focused on the end-user, it’s important to note that other stakeholders need to be involved as well.

This includes:

  • Sales representatives
  • Leadership teams
  • Customer support teams
  • Distributors
  • Engineers
  • Marketing

These audiences should be included in the research through any of the methodologies we discuss today, or at a minimum be represented in some other way during the product design meetings.

💡 The Key Takeaway: Market research in the new product development process is essential in the creation of any item. Why? It allows owners to understand the pros and cons of their product, giving them areas of improvement to focus on. 

Phase 1: New Product Idea Generation (Exploratory Research)

Exploratory research is a good starting point for any organization. One of the most important steps in new product development, it provides value, even if an organization is in the initial phases of concept testing.

This type of research gives an understanding of current customer satisfaction and provides direction for optimizing and marketing current product/service offerings.

However, the main goal of this research is to understand the general needs of the market and identify new product or service opportunities for your organization.

What questions does exploratory research answer?

  • What is the awareness of products available on the market?
  • Are customers satisfied with the products available?
  • How could products on the market be improved?
  • What new products/features is there interest in?
  • What are the customer needs? What needs are not being met?
  • What type of customer would be most interested in a new product?
  • What does the decision-making process for buying the product look like?

What research options are available for new product idea generation?

💡 The Key Takeaway: Don’t go in blind when developing a new product. It’s necessary to conduct exploratory research in order to gather ideas for future marketing techniques, as well as gauging customer satisfaction levels. 

Phase 2: New Product Concept or Prototype Testing Research​

After conducting exploratory research (formally or informally), an organization has identified a need within the market and is set to develop a new product that customers will be interested in.

The main goal of new product testing research is to have your target audiences evaluate the new product and ensure that the product meets their needs.

After all, up to 70 to 80% of products will fail before product launch. Yikes! That doesn’t have to be you. 

This research will provide insights on changes that must be made before a product is finalized and hits the market. It can also help guide the product launch through marketing insights.

Depending on the complexity of your product, this type of research may need to be re-visited at multiple points throughout the product development process.

In the beginning…

Early in the process, you may have a basic concept and idea that you want to test before proceeding. Conduct new product research now!

In the middle…

In a few months, your brand may have more detailed product specifications with renderings or product mock-ups. Again, conduct market research!

In the end…

Finally, near product design finalization, you may have an actual prototype or final product that the consumer can evaluate and provide feedback on. You guessed it – conduct prototype testing research!

What questions does new concept research answer?

  • What do customers like about the concept/product?
  • How could the product be improved?
  • What would the customer use our product for?
  • What features/specifications are the most important?
  • How likely would customers be to purchase the product?
  • How much would customers pay for this product?

What research options are available for prototype testing?

💡 The Key Takeaway: Market research is essential for all stages of new product development–and that includes the prototype stage, too! This can be done in a variety of ways, depending on your personal preference and goals. 

How to Get Started with Product Development Research

There are a few factors to consider before hitting the ground running. Our new product development research firm outlines these below.

Step 1: Set Your Objectives

This first step is key. You'll want to fully discuss and understand several items before you start your IHUTs.

Think about what you want to learn from the research? What are your expectations? What actions will you be taking?

Also, consider who you want to target for product testing? What are their characteristics and demographic information?

How long do you want the participants to test the product? These are all key items that help drive your recruitment screener and process.

Step 2: Determine Your Scope

The scope is determined by several factors and many of these overlaps with objectives.

Answer questions like...

  • Who you want to target?
  • How long will the test run?
  • What are the steps and instructions involved in the test?

When it comes to product testing you will want to be as specific as possible, especially if you are sending your shipment to participants to test products act home.

For example, let's say your company is sending a dish detergent to a client and you need them to download an app to log a diary of usage and feedback around the project for the course of 1-month.

The scope may need to include instructions during shipping such as:

  • Information to download the app
  • Instructions to register a free account
  • Instructions to open and record feedback in the diary
  • How often to test the product
  • Who to call or email with questions

Step 3: Find a Market Research Partner

The most challenging and time-consuming piece of new product development research (both qualitative and quantitative) is recruiting.

This is recruiting in terms of finding participants for testing or finding survey respondents for a larger study.

There are several factors you will want to look for in a market research vendor:

  1. First being responsive. Product testing recruitment can be a long process, find a vendor who is responsive and willing to provide regular updates on progress.
  2. Second, find a market research company that is flexible. One that is willing to work and do more to make sure your project is successful.

Obviously other items such as cost, expertise, industry experience, and others come into play as well.

Ultimately, the choice is up to your company and what you deem is most important.

As far as process differentiators, find a market research company who adds rigor to the confirmation process.

Simply signing up participants through an online survey is not enough. Make sure the vendor adds confirmation emails, phone calls, or even texts.

Looking for general tips when conducting new product development research? Watch this 60-second video as we discuss 3 quick tips for new product development research.

💡 The Key Takeaway: New product development requires actionable feedback, qualified participants, and data expertise. How do you get all of those things? By working with a reliable third-party team. 

Choosing a Research Methodology to Test a New Product

The final research approach chosen for each phase depends on a variety of factors, including:

  • The accessibility of your potential market
  • The type of product your organization is developing
  • The overall budget

The point is market research for new product development offers incredible ROI.

With that said, new product research typically includes both quantitative research (which provides statistically reliable findings), and qualitative research (which provides detailed feedback).

What quantitative method in best?

Drive Research often recommends an online survey as a form of data collection for companies developing a new product.

This method is a form of quantitative research, aiming to gather the “big picture” of a project. Online surveys are ultra-accessible, making them a popular choice of research for new products. 

Easily conducted on a mobile device, online surveys are typically sent via email to the participants.

What's more, online surveys can quickly deliver results from your target consumer, regardless if they are B2B or B2C. Plus this approach is much more cost-effective when compared to other quantitative methods such as a phone or mail survey.

There are additional benefits if you choose to work with a third-party research company on your online survey.

Their experts will write unique survey questions based on your main objectives to assure you receive high-quality feedback to make data-driven decisions.

Additionally, the research agency will program the survey, clean the data, and offer recommendations for how to use the data when developing your new product.

What qualitative method is best?

While there are various studies available for product developers, our market research company often recommends focus groups as our top choice.

Compared to individual interviews, focus groups are particularly valuable when trying to explore consensus on a given product or topic.

They are especially helpful for helping your team generate hypotheses, develop questions, and understand concepts.

In particular, there are five key benefits to focus groups that should not be underestimated for new product development.

1. Explore More than Quantitative Data

Focus groups are a qualitative market research study—meaning they are exploratory in nature. They provide a highly flexible and alternative way to obtain consumer information without using a survey.

Focus groups offer the distinct advantage of helping your team gain valuable, actionable insight into your product or services.

For example, let's say you conducted a survey and found that 75% of your target customers rely on reviews when purchasing a new product.

By using a focus group, you can explore more into the "what" and the "why?"

  • What review sites do customers look to for products similar to yours?
  • What is considered a positive rating? 3 stars and above, or higher?
  • Why are online reviews so important?

The goal of a focus group is not to necessarily reach some level of agreement or decide what to do. Instead, the idea should be to identify feelings, perceptions, and thoughts about a particular topic.

Then, your team is able to use this quality qualitative data to make adjustments to your marketing, sales, etc.

2. Collect Different Opinions All at Once

Surveys can be somewhat cumbersome. You typically send out your questionnaire to hundreds, if not thousands, of individuals and then wait weeks to get enough responses back.

This process may be shorter or longer depending on who your target audience is and how many responses you would like to collect.

On the other hand, a focus group generally consists of 4-12 people who are most similar to your target demographic.

If choosing to conduct focus groups, look for a company that also specializes in qualitative recruiting. This will assure those participating in your group discussion are highly targeted and qualified.

With focus groups, you don't have to wait days or weeks to collect feedback from these people. Instead, within a 60 to 90-minute focus group, a moderator can touch on everything you need to know instantly.

When a focus group company, like Drive Research, conducts this type of new product development research your team gains instant insight into your customers—their behaviors, attitudes, feelings, perceptions, and opinions—all at once.

There’s no wondering how it all works together. You can identify patterns and trends immediately.

3. Create an Interactive Environment

In-person interaction is always highly valuable. There’s a reason why companies prefer in-person interviews compared to video interviews—you just can’t get the same feedback online.

The same goes for focus groups compared to surveys, especially when it comes to evaluating your product.

Focus groups allow people to physically see, touch, smell, and use your product. In this way, you get their full feedback or reaction to your product.

It’s immensely helpful when it comes to enhancing or changing your product based on actual user experience.

Considering an online focus group? We compare the advantages and disadvantages of traditional vs. online focus groups, here.

4. Support New Business Decisions with Facts and Evidence

As explained above, the value of a focus group is to gain feedback on your product or service immediately in an interactive environment. What this means is that you can solve mistakes before introducing your product to the market.

The entire point of a focus group is to reduce serious gaps between what your internal team thinks and what your customers think and feel.

The key is to conduct focus groups throughout the development process. A market research study does not have to be one and done, but more of a continual process.

You don’t want to wait until the very end to get feedback from your target demographic.

Instead, you should plan multiple focus groups throughout the product development process to gain immediate feedback on each phase.

If anything, our market research company recommends conducting two focus groups - one in the initial stages of concept testing, and another when you have a physical product.

5. Focus Groups Drill Down into Customer Wants and Needs

Products and services must constantly change to adapt to the changing needs and wants of customers.

Focus groups offer a great way to drill down into these ever-changing needs to identify what matters most to your target demographic.

They’re a great way to sit down with your customers and learn something new.

💡 The Key Takeaway: Conducting focus groups is a fantastic option for gathering high-quality information. The interactive nature of focus groups can give clients a detailed look into product development strategies. 

Contact Us For Product Development Market Research

Drive Research is a new product research company that partners with organizations to deliver insights to guide new product development.

If you’re interested in teaming up with Drive Research for a new product research project, contact us through any of the four ways below:

  1. Message us on our website
  2. Email us at [email protected]
  3. Call us at 888-725-DATA
  4. Text us at 315-303-2040

chris coville - about the author

Chris Coville

As the Director of Research of Drive Research, Chris has 10 years of experience in the market research field and has completed projects with organizations across the globe. He was also named a 2017 40 Under 40 Award winner.

Learn more about Chris, here.

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New Product Development