Can market research reduce the risk attached to launching a product in the market? It certainly can! Let us look at how and in which ways.
New products can actually be of a few kinds:
1) A radically new category or idea that doesn’t exist in the market at all, and offers a new benefit altogether.
2) A new product form for a benefit which already exists.
3) A new brand in an already existing category.
4) A variant or extension to an existing brand.
5) A changed or upgraded product in an existing brand
The fourth and fifth are not normally considered as new product development, but product testing for such products is a big part of any research firm’s revenue model.
Key principles
It is important to understand that the measures relevant to each kind of new product research are pretty much the same, as the process of attracting consumers to a new product or variant offering are similar.
For any new product to be successful, certain key principles need to be adhered to, such as offering a good combination of benefits and price value proposition, which will make the offer interesting; good marketing and selling, that will lead to more people wanting to try the new product; and good product performance, which will make consumers “adopt” the product and recommend it to others too.
That is why a new product must be designed keeping in mind what is likely to work in the market. Once it is launched, the company must find a way to make the target consumers aware of its launch and existence. Awareness must be communicated in a way that consumers form a positive impression about the product and want to check it out.
Once they try it, the product must perform really well, to reassure the consumers that they have made the right choice.
How research is done
Research for new product development is therefore treated as two sub-disciplines.
~ New concept testing
~ Product testing
New concept
In the process of new concept testing, quantitative and qualitative methods are used to evaluate a consumer’s response. A new concept succeeds when the ‘concept’ or promise is:
Relevant : That is, it is something the consumer sees value in. It could either be fulfilling an existing need, or introducing a new benefit altogether. Relevance can come from product form, convenience, new product feature, emotional benefit or pricing innovation.
Unique : This means it is not readily available elsewhere. This too can come through form, feature or benefit.
Credible : Consumers should not find the promise hard to believe.
Value : Offered at a good price value proposition.
Therefore, a new concept test gauges answers to important questions such as spontaneous reactions, dislikes and likes, assessment on relevance, uniqueness and credibility, reasons for negative assessment, the intention to buy (ITB), and the price they are prepared to pay if response has been positive.
Concept introduction
The concept needs to be introduced to respondents, and is ideally done through a concept card. These cards
~ Explain the concept, but do not attempt to persuade or sell
~ Explain the benefit clearly, rationally
~ Give the “reason why”
~ Highlight why unique product is unique
New Product Testing
Product testing can either be “blind” or with branding. Blind testing basically involves not telling the consumer which brand the product is from. The products used in testing are re-packaged in plain packs (which creates a problem in situations where the brand name is engraved on the product itself) or served directly without any branding marks.
Product testing can be in-home placement or in a central location test (CLT). To use this, the following guidelines must be followed.
~ Ready to consume products can be tested easily in either situation .
~ Products that need to be cooked, such as cooking oil, salt or sugar are generally tested through in-home placement. In this, the respondent is given a certain quantity, which he / she uses over a few days.
~ Products that require the entire family to taste and then give feedback are also normally done through in-home placement.
~ Products that are ready to consume or easy to prepare but require standardised conditions, are generally tested in a CLT (for example, soft drinks that need to be served between 0 and 40°C)
Product testing can be either monadic (only one product being tested), sequential monadic (more than one product being tested, but one after the other), or paired comparison (more than one product being tested simultaneously). However, in practice, simultaneous comparison is impossible. It is just a special case of sequential monadic, but with very small time gaps.
What are you looking to answer?
In a product test, the kind of questions to which answers are sought are:
~ Acceptance of or liking for the product being tested.
~ Consumer’s likes and dislikes.
~ Preference over other products, if they are being compared.
~ Rating of the product on specific parameters.
~ Intention of buy the product if it is available in the market.
Product testing almost always requires quantitative research. Qualitative research can play a role at two stages
~ Before the actual test, you can conduct group discussions to understand the parameters on which the product is being evaluated.
~ After the product test, there can be some one-on-one conversations to get an in-depth understanding of why people like or dislike specific aspects.