Marketing Research Framework To Improve New Product Success

One question I often get asked is what kind of market research should we do to help guide our new product development efforts? The answer to this question is important but can be confusing because there are a myriad of research tools and techniques available. And, doing the wrong type of research could lead to high opportunity costs (by not fully understanding the target market) or expose a company to substantial risk (by projecting results inappropriately).

To determine the type of research that is appropriate, a key consideration is where you are at in the product development cycle (see framework below).

New Product Framework

The following is a brief description of the types of research corresponding to each stage.

Insights Stage

The primary goal of this stage is to clearly understand customer needs and wants as they relate to the product category. The nature of the research should be largely qualitative and the questions open-ended to provide plenty of latitude for target customers to express their needs and interests. Several different, mostly qualitative, research techniques are available to choose from:

  • Focus Groups: Typically consist of 6 to 10 individuals who participate in a two hour facilitated discussion. The discussion usually starts with background information on respondents’ usage of the category and then progresses into specific questions regarding needs, wants and perceptions of current product offerings. Rough product concept ideas may also be explored. Though focus groups can be a source of significant learning, “group-think” is often a problem and respondents may shade their responses given the social context.
  • 1 on 1 (or In-Depth) Interviews: As the name suggests, these are face to face interviews with individual respondents. In comparison to focus groups, 1 on 1 interviews produce a greater depth of information because you generally have more time with each participant to thoroughly probe responses. Also, they are not prone to “group-think”. However, the cost and time to conduct 1 on 1 interviews is slightly greater.
  • Laddering Research: A variation of 1 on 1 interviews where respondents are asked a sequence of “why” questions to uncover the underlying reasons or motivations for desiring certain product features or characteristics. The net result is the creation of a means-end chain: Attribute > Consequences > Values. For example, a boater might say that “seating configuration” (an attribute) is an important consideration when shopping for a boat. We might further find, after some probing, that this is important because it fosters communication between passengers (consequence) which, in turn, could help strengthen family relationships (values). Besides providing deeper insights into customer motivations, this method is very helpful with brand communications because it often uncovers key emotional “hooks” that can be leveraged in advertisements.
  • Product Audits: In a product audit, respondents evaluate your existing product and perhaps a competitor product to identify specific likes and dislikes. It can be performed in either a focus group or 1 on 1 setting. This is a great technique to address competitive deficiencies and identify incremental improvement opportunities.
  • Analysis of CSI Data: For established products, if a customer satisfaction program exists, product ratings should be thoroughly mined to identify satisfaction gaps, key problem areas, and drivers of satisfaction. Plus, open-ended comments should be explored to identify where the product might be failing to meet customer expectations. Typically, an analysis of CSI data is a first step but subsequent qualitative research (see above items) is typically needed to fully understand the reasons behind the ratings.
Generate Solutions Stage

Once you have a clear understanding of target customer needs and wants, the next step is to generate potential ideas or solutions for how to meet them.

  • Brainstorming: A brainstorming session is a facilitated discussion that typically involves four steps:
  • Clearly defining the problem or opportunity
  • Having participants generate multiple ideas in a non-evaluative environment
  • Build on others ideas
  • Identify the most promising solutions
The sessions typically involve employees from multiple departments but could also be performed with select target customers or channel partners.

  • Conjoint Analysis: Short for “considered jointly”, conjoint is a research technique to identify how consumers trade off various attributes. It starts with identifying 6 to 10 product attributes (e.g., price, fuel economy) and 3 to 5 performance levels for each (25 mpg, 30 mpg, 35 mpg). From this, a questionnaire is designed whereby respondents are sequentially shown two or more products (attribute bundles) at a time and asked which one they prefer. This process is repeated, typically with 15 to 20 pairs, to provide the necessary inputs to infer the relative importance or utility of various attribute levels. “What if” scenarios can also be run to identify the optimum combination to maximize share of preference.
Confirmation Stage

The goal of the final, confirmation, research stage is to determine whether there is sufficient consumer interest in the product idea to go forward, identify who it primarily appeals to (refine the target), and uncover specific likes or dislikes that could be used to refine the product or advertising message.

  • Concept Test: A research study where one or more product concepts are presented to respondents, often in a competitive context, to identify the relative interest in each (share of preference). Each concept typically consists of a drawing/image and brief description. However, for durable products, a 3D image can also be created from CAD files and displayed on screen. Concept tests are typically conducted via an online survey and require a fairly large, representative sample to be nationally projectable.
  • Product (or Prototype) Usage Test: A variation of the concept test where respondents evaluate the product both before and after actual usage. Often done as a follow up to a concept test, a product usage test makes sense when the costs to further develop and market the new product are substantial. It may also be done in lieu of a concept test when the “touch, taste or feel” of the product is critical to its assessment (i.e., not easily explained in concept form).

Some final thoughts regarding the Marketing Research Framework for new products; first, if a company has a very good grasp of the needs and wants of target customers, it can bypass the “Insights” stage and move directly to testing/screening new product concepts in the “Confirmation” stage. However, most firms are not in this position. Second, to develop and evaluate products well requires time and resources. Doing this last minute greatly limits what you can do and reduces your chances for success. Be sure to budget enough time and money in your product planning process. For the Insights (qualitative research) stage, plan on 6 to 8 weeks. Slightly less is usually required for the Confirmation stage.

Additional details on new product research are available here.

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