Market research is a vital element of the product development lifecycle. Attempting to design, produce, and release a new product without listening to input from your customers is like trying to fly in an airplane with no windows—you’re going to crash. Unfortunately, product development projects do not have an excellent success rate.
Clayton Christensen, a professor from Harvard Business School, says around 95 percent of the 30,000 new products introduced every year end up failing. The time has come to incorporate market research into every stage of the product development lifecycle. Listening to your customers' comments can make you confident that your new product will succeed. Read on to learn more about the best types of research to utilize throughout your product development workflow to create successful products and services that buyers want and are willing to pay for.
What is product development?
Product development is the process in which an idea goes from concept to execution. The term can refer to creating an entirely new product or developing an improved version of an existing offering. The same general process applies to various industries and products, whether you are developing new software or an energy drink. In the business world, this often consists of a series of stages in which products are gradually designed, tested, iterated, and eventually put on the market. These stages are collectively known as the product development lifecycle.
The product development lifecycle
The product development life cycle is often broken into six general phases. By breaking up the project into separate steps, organizations can be more efficient and pause to review their progress at each point.
Here are the six stages:
- Product Definition
- Initial Design
- Validation & Testing
In the ideation phase, the product development team frequently meets to brainstorm different product ideas and align on goals such as the ideal target market and how to meet their unmet needs. After that comes product definition. Once the team has come up with an idea they’re confident in, it’s time to define the product from a business perspective.
In this phase, the team will develop a clear product roadmap, covering everything from success metrics to an overall marketing strategy. After the product is defined, the development team moves into the prototyping phase, testing ideas through market risk research and feasibility analysis. The product development team will build an initial design using the prototype from the third stage. This design is then validated and tested in stage five. If the product has passed all the tests, it will be created and launched in the commercialization stage.
Types of product development research and methodologies
The benefits of agile market research for product development are apparent. What’s not obvious is what research methods best apply to each life cycle stage. Below, we’ve broken down the optimal research methodologies into four overarching categories, which we tie to the six stages of the product development lifecycle.
- Ideation and feature development
Ideation and feature development research methods are designed to help you in the early stages of the product development lifecycle. For example, Kano Analysis is designed to help you classify a set of product features into one of six categories so you can understand and narrow down which attributes are directly impacting customer satisfaction. A Kano Report could be highly effective in helping your product development team narrow its focus to those ideas that are likely to succeed.
Jobs-to-be-done segmentation is a research method that identifies where current gaps are in your industry that you could fill with a compelling new product. This can provide robust data and inspire your product development team with innovative ideas in the early stages of the project. The third research methodology in this category is called line optimization choice-based conjoint. This analysis looks at your current portfolio of products and identifies new products and sublines that you could introduce to maximize revenue.
- Concept testing
Moving past the ideation phases, we come to the concept testing research methods. These analysis methods are designed to be used in and optimize the prototyping and testing phases of the lifecycle. You can tap into System 1 thinking with rapid association to understand what feelings your customers associate with their first impressions of your product. If their associations are positive, you can be more confident that you’re headed in the right direction.
MaxDiff is another research method in this category. With MaxDiff, you can test your product’s marketability by determining what messages are most motivating to purchase the product. Side-by-side research can also achieve this objective but works by asking respondents to compare two messages side by side. Also beneficial for marketing, heatmap analysis can help your product development team identify what packaging, advertising, messaging or other visual assets are most compelling among your target market.
- Customer experience
Understanding the customer experience is usually something one can only analyze post-launch. However, choice-based conjoint research lets you get insights into CX before you release the product. In reality, creating a product that perfectly meets every customer’s needs and preferences is often impossible. When faced with these limitations in the prototyping and initial design phases of the lifecycle, product development teams need insights to understand what features can be eliminated without risking the product’s success.
With Choice-based conjoint research, you can discover what features your customers prefer when forced to make trade-offs. This can help you identify the attributes of your theoretical product that are nonnegotiable versus those that could be taken off the table if needed. With this methodology, you can answer questions like “Which features (or levels) of those attributes are most preferred?” or “Which collection of features would yield the greatest preference share overall?” Choice-based conjoint can also help measure price sensitivity by adding a pricing attribute question.
- Price optimization
The final type of research is price optimization analysis. These research methods could be appropriately applied at any stage of the lifecycle but would be ideally suited for the product definition stage. The Monadic Price Test is a way to determine the optimal price point for your product or service. Upload a preview of your conceptual product and the prices you want to test, and you can quickly discover your maximum revenue price point. You can also use the Van Konan research method to test what consumers in your target market feel your product is worth. The Van Konan research method incorporates context by considering factors such as the likelihood of purchase, frequency of purchase, and total addressable market to better understand your product’s optimal price.
The best way to do product development market research
Product development can be difficult to achieve successfully, as shown by the data. Attempting to take ideas and turn them into functional products forces teams to collide with all kinds of realities, including the limitations of budgets, technology, and headcounts. To make product development more successful and efficient, using an agile market research partner to influence each stage of the lifecycle will set you and your product on the road to success. There’s no better co-pilot than aytm.