Delivering a product that fulfills the needs and expectations of a market is perhaps a company’s most important initiative. Products that accomplish these tasks build market share, brand equity, customer loyalty, and can even command higher prices, all of which lead to greater profitability. It is therefore vital to gain an understanding of what customers’ needs are and which particular features most impact their overall appreciation of a product. Regardless of how far marketers have gone into the product concept design, market research can be employed to ensure that the product meets the needs of its intended audience.
Early stages of product design:
Before making some decisions on the creation of a new product, quantitative approach can be used either in conjunction or as an alternative to the qualitative approach. A choice-based conjoint approach can be applied to measure the level of preference of a product. In a conjoint exercise, product concepts are created for research purposes based on a pre-defined set of dimensions, where within each dimension a pre-defined set of levels. Using smartphones as an example, the dimensions (called “attributes”) could for example consist of size, processing power, manufacturer, and battery length. Each attribute would have “levels” that differentiates across phones. For instance, the levels within the “manufacturer” dimension could consist of Apple, Samsung, HTC, Sony, Research In Motion, etc. The result of this research would indicate the relative impact of each dimension on consumers’ decision-making, as well as their preferences within each dimension.
Later stages of product design:
After the final concepts have been developed, they can be tested in either a qualitative or a quantitative setting. A qualitative setting is most useful if a working prototype of the product concept can be displayed and handled by participants. Ethnographic research is a particularly powerful approach, as it observes how participants would utilize the product within a natural setting, such as their home. In this methodology, the researcher observes how the product’s features would be used.
In cases where the testing of a working prototype is not feasible, an online quantitative survey can be employed in which the concepts are presented. The testing of the concepts would first be in a monadic fashion, i.e. the sample is split into equal sub-groups, with each sub-group presented one concept on its own. The concept is then rated it on a scale on various measures (appeal, uniqueness, etc.). If there are alternative concepts, they can then be presented afterward, and respondents are asked to compare which concept most stands on those same measures. A conjoint approach, as described earlier, can also be utilized at this stage. The data collected from the conjoint approach allows the build of a market simulator, in which what-if scenarios can be created, and the expected breakdown of consumers’ preference across the available products would be observed. This approach is particularly useful if price is one of the factors to be tested.