Product Research or Product Market Research is a technique used in marketing research that yields information about desired characteristics of the product. It is one of the major applications of marketing research and plays a meaningful role in product decisions. Statistics suggests new product failure rates to be quite high – from about 30 percent to as high as 80 percent. Product research minimizes the risk of new product failure and hence it is frequently used for exploring the viability of new products.
The process through which new products are developed is called New Product Development (NPD). Four stages are involved in the process of NPD and product research is conducted together with this process. The stages of new product development are as follow:
1. Idea Generation: The objective of this phase is to come up with completely new ideas for products, or new attributes for current products, or new uses for current products.
2. Concept Development and Testing: The core objectives of concept testing includes: getting the first response of consumer on product idea, getting direction for future development of product, selecting the most promising concept for further development and getting an initial evaluation of potential commercialization prospects for the product. Concept testing is exploratory in nature, so judgment or quota sampling is usually used to achieve research objectives.
Concept test is conducted to get answers to the following questions:
- Do consumers understand the concept?
- Does the concept have any crucial flaw?
- Does product meet the needs of some segment?
- What alternate concepts would be preferred?
Focus group interviews, monadic ratings, paired-comparison ratings, conjoint analysis and usage tests are used in a concept test.
3. Business Analysis: In this phase, analysis is done to estimate the sales level and profitability of the product.
4. Commercialization: If sales level and profitability of the product are good enough, then product is brought to the market place”.
Product research gives an in-depth understanding of the product market and provides valuable information about desired characteristics of the product. Initially, product research evaluates new ideas about the product. As the research progress, ideas that matter most to customers are explored. Product research can also be linked with other aspects of marketing. For instance, it may provide information about the price that customers might be willing to pay for the product or package design that suits to them. Test marketing, an expensive form of product research can be very useful for predicting likely sales of a new product.
Product research is mostly focused on product improvements rather than on entirely new concept as product improvements are more easily accepted than a complete new product. Market research does play a significant role in determining a need for new products still many successful new products results by accident and not as a result of hours and hours focused on research and development (R&D). Telephone, X-rays and bubble gum are example of some products that resulted by accident and not by R&D.
Alexander Graham Bell was trying to invent a device that could send more than one telegram at the same time but accidently invented ‘telephone’. Wilhelm Conrad Rontgen accidently invented ‘X-rays’ while he was experimenting with a cathode ray generator. Thomas Adams was experimenting with chicle to change it into synthetic rubber products but accidently invented a ‘chewing gum’.