What Is the Importance of Market Research for New Product Development?

The success of a new product is often largely dependent on the needs and wants of the consumer. If a company depends on guesses and hopes to create a product, it runs the risk of developing something neither wanted, nor needed by the public. The importance of market research for new product development can hardly be understated; by informing the developer through quantitative and qualitative data, market research can help shape the design of a product to suit both the developer and the customer.

Market research for new product development can help the developer determine the target market for a product. If a car company wishes to develop a new hybrid vehicle, it can use market research to determine the potential demographics for the product. Quantitative research, which helps define demographics, can show the car company what segments of the population may be most interested in a hybrid vehicle. If quantitative data shows that middle-income families are most likely to want a new type of hybrid, the development process of the car can move forward into the design stage with that demographic in mind.

Now that the developer understands something about likely consumers, market research for new product development can shift gears into determining what those consumers are looking for in a new product. Qualitative market research, which discovers information about specific consumer behavior and needs, can help support this next step in product development. Middle-income families, for instance, may be highly concerned about safety ratings, prize trunk storage space, and want the option to upgrade a car to include an entertainment system. Knowing what qualities are desirable helps a company develop a product that meets the needs and wants of its likely demographic.

In addition to providing valuable quantitative and qualitative research about the consumer, market research for new product development can also help a developer suss out his or her competition in the current market. Understanding the current and upcoming products of competitors can help a developer determine how to distinguish his or her new product from similar items. It can also be helpful to examine recent products with a similar profile that have failed or faltered on the market, so that the development team can learn from others' mistakes.

Market research for new product development can also help the developer determine how the new product can enhance, re-affirm, or improve the image of his or her company. This can involve gathering data on the positive and negative views consumers have of the existing brand, as well as on how well or poorly previous product releases have performed. By linking a new product firmly to the brand, the product has the opportunity to provide more than financial success. A great product that can reaffirm the best values of a brand, or an innovative item that can re-invent or expand the brand, can be a great way to improve the sustainability of the company as a whole.