Every new product development professional carries a toolkit for the job. Just like a carpenter carries a saw, hammer, and clamps, product managers use market research, processes, and planning to finish a job. Carpenters choose specific saws and blades depending on the fineness of work. A quick cut of a 2×4 board does not need the same degree of precision or quality as cutting maple veneer for a kitchen cupboard.
Product development professionals select different tools and apparatus to match the outcomes of their job, too. Market research to gather data on market opportunities is different than the customer insights necessary to establish a pricing strategy (read more here). While saw blades provide various degrees of fineness and integrity to the carpenter’s job, we similarly use market research tools to better understand specific customer needs throughout the new product development process (see the figure below).
The first phases of new product development focus on opportunity identification. In early stages of product development – whether you use a traditional staged-and-gated, Agile, or WAGILE approach – you must study and observe customers. What is the problem they need help solving? What are the limitations or constraints they face in addressing a given pain point? What is the solution worth to them?
You may use tools like observation, interviews, or questionnaires during this stage of product development. Essentially, product managers are researching the needs and desires of customers as well as available product solutions. If the market is very crowded with competitors, product development may take a different pathway. Market research is invaluable to determine needs of existing and potential customers.
Design and Development
During design and development of a new product, we begin to identify potential concepts that we feel will address the customer’s pain points. We specify the requirements and features of that solution, thus allowing the engineering teams to craft a working product.
Market research tools deployed during design and development include concept testing, AB testing, and QFD (quality function deployment – read more here). The goal is to determine a narrow set of features that will deliver the expected consumer benefit while also creating value (profit) for the firm.
Finished products move into production which includes manufacturing and servicing the product as a normal part of the business. For example, after a carpenter finishes the job, a homeowner continues to perform maintenance. We sometimes have to fix things – like a loose knob on the kitchen cupboard – but we also do maintenance to ensure long time enjoyment of the product. Wiping spills from cupboards keeps them clean and shiny, preserving the wood quality for a long life.
Likewise, once a product is launched, we perform maintenance to fix bugs or quality issues not identified pre-launch. Long-term profits are maintained as product managers ensure cost-effective and reliable manufacturing is in place for the product.
During production, market research entails lead user panels, for instance, to identify next generation features. Focus groups are used to uncover needs of non-users. For example, how can we transition the product to more markets? Which market segments demand a premium version of the product? Can we make it less expensively but still maintain quality and customer satisfaction?
Market Research Tools
Market research tools help new product development practitioners understand customer needs. We deploy different techniques depending on the stage of development and the desired fidelity for the data. We use qualitative market research to gather thoughts, feelings, and opinions of customers while we use quantitative market research to validate and verify product specifications statistically.
Learn more in our New Product Development Lunch and Learn sessions. On 14 March, the free webinar discusses customer insights and market research tools. Register here. For more information on Customer Insights, also check out Chapter 2 of The Innovation ANSWER Book, 2nd edition and Chapter 3 of The Innovation QUESTION Book.
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