Why you need to do market research before launching a product

uncovered that these preferences are forward-looking. People’s attitudes give us an insight into what happens tomorrow and what products you should launch in the future. If you do your market research properly and find what someone’s preference is today, it is possible for you to do something about it tomorrow.

The thoughts and feelings of your “top” customers — on whom businesses traditionally focus — and the mindsets of the “bottom,” or less lucrative customers, are pretty self-evident. The question is which of the customers that are in the middle will become top customers as well as which will become bottom ones. Ascertaining this information will also assist you with your product launches.

Why market research involves finding out about attitude

Finding out about attitude lets you know what those middle customers are going to do because behaviour is noisy. It’s up, it’s down. That’s why they’re in the middle. If you merge attitude and behaviour, you become better at ascertaining who to target as well as how to target. It’s a better approach as opposed choosing only one or the other.

For example, Jane and Martha both buy chocolate chip yoghurt once every two months. Merely looking at this information would suggest that Jane and Martha are equally valuable for the manufacturer of the yoghurt. However it turns out that one of them is more valuable than the other one is.

Upon nearer inspection, we find that Jane really loves this particular brand of chocolate chip yoghurt. However, she has just started eating yoghurt and is slowly building up her consumption rate. Sometimes a discount may inspire Jane to buy the brand. On the other hand, Sara is indifferent to the different  types of yoghurt that this brand sells and only buys it when it is on special. It is more probable that Jane will continue to purchase this brand of chocolate chip yoghurt longer than Sara.This scenario shows how firms can use knowledge of consumer attitudes to predict the most profitable consumers.

The role target markets have to play

A target market consists of consumers that a company wants to sell its products and services to as well as to who it directs its marketing efforts. These markets are groups of individuals who are separated by unique and noticeable aspects.

Identifying the target market is an vital step in the development of a digital marketing plan. A target market can be split from the market as a whole by geography, buying power, demographics and psychographics.

Not all products and services are intended for all types of consumers. In fact, organisations may tweak specific aspects of a product so that it is more likely to be bought by consumers with varying tastes. Creating the target market may necessitate the use of limited product roll-outs in addition to focus groups. It is necessary to allow product managers to get a feel for which aspects of the product are the most powerful.

Target markets can be divided according to the following aspects:

• Segmentations – addresses (their location climate region)
• Demographic/socioeconomic segmentation – (gender, age, income, occupation, education, household size as well as stage in the family life cycle)
• Psychographic segmentation – (similar attitudes, values, and lifestyles)
• Behavioural segmentation – (occasions, degree of loyalty)
• Product-related segmentation – (relationship to a product)

In addition to these segmentations, market researchers have advocated a needs-based market segmentation approach to identify smaller and better-defined target groups. Some approaches to these smaller groups are:

• Select the target audience – the customers are grouped based on similar needs and benefits sought by them on purchase of a product.
• Identify clusters of similar needs – demographics, lifestyle, usage behaviour and pattern used to differentiate between segments.
• Apply a valuation approach – market growth, barriers to entry, market access, switching, etc. are used.
• Test the segments – A segment storyboard is to be created to test the attractiveness of each segment’s positioning strategy. Modify marketing mix – expanding segment positioning strategy to include all aspects of marketing mix.

Get in touch with the Digital School of Marketing

If you’re a marketer and want to get to know a bit more about how to research your target market properly and develop your marketing strategy then you need to do our Market Strategy Course. For more information, please follow this link.