Marketing Research in New Product Development

Market research helps new product teams make informed decisions.
Market research helps new product teams make informed decisions. (Image: John Rowley/Photodisc/Getty Images)

Market research is important at each stage of the new product development process to ensure the program will deliver its intended results. Research helps validate initial development concepts, and provides a framework for developing product attributes that meet real customer needs. As the development program progresses, research helps provide a clear view of the market opportunity and tests the effectiveness of the planned marketing strategy. A discussion paper from research firm B2B International, "Using Market Research for Product Development," describes the way market research reflects the product life cycle.


Carry out continuous basic research programs to identify opportunities for new products. Review competitive websites to identify potential products that might threaten the business. Hold review meetings with customers to discuss their future product requirements. Set up collaborative links with universities and research institutes to assess their research programs for potential new products. Establish an internal research process. Set up a forum to encourage customer-facing employees to contribute proposals for product development. These could be innovative ideas or suggestions for overcoming problems with existing products. Review customer service records to identify recurring problems that new products could eliminate.


Test initial product concepts with a group of users. In the information technology sector, this is known as beta testing. Users agree to use a trial version of a new product and provide feedback on any issues or problems. This type of research provides the development team with an early view of customer attitudes, and also identifies any potential problems that require further development.

Market Assessment

Appoint a market research company to assess the market for the new product. This research will identify the size of the market, the key decision makers and influencers, product preferences and pricing. It should also identify competitive products and other risks that might threaten the success of the launch. The development team can use a technique called conjoint analysis to measure customers’ preferences for different product or service features. As research firm Forward Analytics explains, conjoint analysis helps rank the features customers want most, and those they are prepared to trade off at different price points.

Test Market

When the product is at prototype stage, it can go into a test market. This is a small-scale marketing exercise where an organization sells its products to a limited geographical territory or market sector. The "Harvard Business Review" describes test marketing as “a dress rehearsal for launching a new product.” The territory could be a single state, city or region. It could also cover the territory served by a regional television channel. The organization tests various aspects of the marketing program, including price, promotions, distribution, advertising and direct sales support. The development team uses the results from the test market to fine-tune the final launch marketing plan.


Test markets provide data on potential marketing performance. The development team should also carry out extensive consumer testing to identify product preferences and propensity to buy. Test packaging and the product to identify the most acceptable combination. Research potential advertising and communication media to identify readership profiles that match the target audience. Use the media research to develop a launch communications plan and budget.

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