What is product research?
You’re in the process of developing a new product with a view to launching it onto the market. It’s a risk. Get it wrong and you could make an expensive mistake; get it right and you could have a successful, profitable product on your hands This is where product research comes in. It helps you:
- Evaluate ideas
- Test concepts
- Assess names and packaging
- Check out the competition
- Price correctly
- Gauge customer satisfaction post-launch
- Continually improve the product
Product research goes hand-in-hand with market research, which identifies a product’s target audience, develops typical buyer personas, and analyzes purchasing behavior. It helps you make informed decisions.
Why is product research important?
A product idea can be brilliant, but if nobody wants to buy it, there’s no market for it. Product research will tell you that. Similarly, a product is only worth what people are willing to pay for it, and you’ll be able to price it accordingly. And if your competitors are doing better than you, you need to find out why, and identify any gaps that they’ve missed, so you can get ahead.
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How to conduct product research
Sure, you can start off your research online, looking at sites such as Amazon, review sites, and social media, which will give you a basic idea of what’s out there and how buyers react to products. But if you really want to dig deeper and make the research your own, you need to invest in user experience (UX) research.
UX research focuses solely on the user of your product, their:
It relies heavily upon feedback collection, observation, and analytics, using qualitative and quantitative methods:
- Quantitative UX research is done as a starting point; it’s all about crunching the numbers that translate into informative statistics. Surveys and polls (online, mobile, paper, telephone) are the most commonly used methods, although data from analytics platforms can be added to the mix
- Qualitative UX research joins the dots of the quantitative data by revealing what people think, believe, and feel about the product. Rather than ticking boxes, people say or write what they think either in open text boxes on surveys, or during interviews and focus groups
Areas of product research
Product research, to be effective, needs to be broken down into manageable stages. These are:
The greatest product in the world is of no value if your customers don’t want it or don’t believe it fits in with your brand,
- What do your customers believe is a natural extension of your brand?
- Would you buy a bicycle from Ford?
- What segment of your customers are you going to target with this new offering?
- How large is that segment?
- Are you customers early adopters or more traditional? Are they open to new ways to do things or will they need to be convinced?
Concept testing should be conducted in an agile environment. Begin early in the process with an MVP to test on existing and potential customers. A series of small studies done throughout the product innovation cycle will ensure that your new product is refined by customer input. It is always more cost-effective to refine a new offering as it is being developed than to have to drop or make significant changes to a product that has already consumed a great deal of investment.
This continues as you roll out your new product. It is crucial that you stay in touch with your target audience as they use the product, and take on board comments and suggestions for improvement. There are many benefits to concept testing:
- It’s cost-effective and flexible: You can send out simple, quick surveys if you want high-level rapid feedback, or longer ones if you want to dig deeper into the detail
- You’ll be able to optimize your product: You’ll gather useful information on things like branding, pricing, and market status that will make a real impact on your development decisions
- Continuous quality assurance: You can use the same audience to give feedback on your improvements, or survey a new audience to get fresh insights on your product development.
- Great brand loyalty: You’ll build up good customer relationships and increase your brand equity by including potential customers in your product’s design and development.
What’s in a name? A bestselling product, we hope. Product naming is the process of coming up with compelling, unique names for your new products. We would always recommend using qualitative research, with its emphasis on verbal expression, to test product names with your prospective customers, and using a text analytics tool to categorize text responses by both topic and sentiment automatically.
When deciding on product names (we recommend between 3 and 15 options) to run past your respondents, remember these six golden rules:
- It should be easy to remember: consumers must be able to recall the name easily
- It should be memorable: There’s a lot of product ‘noise’, and your name needs to be heard above it
- It must be easy to pronounce: Word of mouth is important, and if your customers can’t say it, they won’t mention it to others
- It must be easily understood: It helps if the name hints at what the product does, unless you have a colossal marketing budget to explain a more leftfield name
- It must translate well with international audiences: We’ve all heard the apocryphal story that Coca Cola originally transliterated as ‘bite the wax tadpole’ in Chinese. Whatever the truth, make sure audiences around the world can pronounce your product name and it doesn’t mean anything problematic.
- It has to be a name you can own. No one wants to discover after a comprehensive research program that the name everyone loves is not available for use.
Provide your respondents with a product description, and ideally images of the product. Break your testing between:
- Overall name questions: How does each name compare with the others? Rank the names in order of preference, or against criteria such as trustworthiness, appeal or creativity. Do respondents have any names of their own? The results of this testing will give you the top names overall and in every category.
- Individual name questions: Would respondents buy this product with this specific name? How does this name make them feel? Individual name analysis should reveal name sentiment, as well as data about a consumer’s likelihood to purchase or consider your product.
You use this to identify which product features your customers really value, so that you can add or improve them. But you always need to keep in the back of your mind that a product is more than just the sum of its features – it’s how they work together to give a seamless experience that’s important. Research will help you do that.
There are three areas of feature research that you’ll need to undertake:
- Identifying customers’ wants and needs: Customer needs analysis will give you insights into personal values, purchasing decisions, and pricing tolerance. Conjoint analysis, with its multiple product attribute comparison/trade off scenarios will inform which features customers consider most valuable.
- Internal development: Once you’ve analyzed what customers want, you need to bring your feature back in-house and seek the expert opinion of your product managers, business analysts, marketers, designers, engineers, and customer experience teams.
- Test with customers: You’ve created a feature that customers want, and your in-house teams have approved them. Now you can use product feature prioritization to understand the features your customers value (and don’t). Survey: usage (where and how the customer uses the feature); ‘top of mind’ negative and positive associations with the feature; product categorization (comparing with the competition to see which features make a product more or less ‘swappable’).
A product is only worth what people are prepared to pay for it. You need to ensure that its price is low enough for people to feel they’ve got good value, and you also make sufficient profit, but not so cheap that its quality is questioned.
When you conduct pricing research you’ll discover:
- How willing the market is to buy your product
- What is the highest return on your development investment
- How to maintain your brand’s value
- When and how to alter your pricing effectively
Pricing research is done through a combination of market research, competitor research, market analysis, and testing in the marketplace.
Use product pricing research tools. These use one or more of the following methodologies to ask survey respondents:
- Van Westendorp price sensitivity meter is a type of direct pricing research that asks survey respondents four simple questions to gauge whether your product is too expensive or a bargain
- Gabor-Granger pricing methodology uses predefined price points to determine the highest price a respondent would pay for your product
- Conjoint analysis gives respondents a choice between product packages and then asks them to choose one of the feature/price configurations to create the ideal option Each option comes with trade-offs and a best time to use