Why new product development needs market research

1. ARROWPOINT-MARKET RESEARCH AND INSIGHT SOLUTIONS Why new product development needs market research ?

2. "New" is one of the strongest words in marketing. "New" invokes the belief that something is moving forward, that it is different, modern or improved. People are attracted to new products like a magnet. Introducing new products on a constant basis is the best way to get attention and is invaluable publicity for a business. "New" positions a company as being dynamic and forward looking. Companies such as 3M and Sony have held this slot for periods of time but it is difficult to stay there. Innovation is hard work and the road is paved with failures. Introduction: The Importance Of "New" This white paper shows how market research, when used correctly in product development research, will minimize the risk of failure. It also explains that market research does not always give a clear-cut answer – considerable insights and experience are required by the market research analyst to interpret the data and visualize the opportunity The word "new" is sometimes over-played in marketing because it is so frequently used for everything from conceptually new products through to old wine in new bottles. The main types of product development are as follows:

3. New concepts – completely new products that have arisen as a result of innovation and which can sometimes create new markets. • Additions to existing product lines – new products that supplement established product lines. For example, a supplier of industrial gases may introduce a new, smaller cylinder to include in an existing product line, aimed at serving customers who require smaller amounts of gas. • Modifications of existing products – existing products that are modified in order to better meet customer needs, such as improved performance. 90% of new product research is focused on product 'additions' and 'modifications' rather than on the concepts. There is nothing wrong with this. Product improvements are obvious developments and are much more easily accepted than conceptually new products. In fact, the more conceptually new the product, the riskier it can be. FedEx lost $340 million on its new Zap mail and DuPont lost an estimated $100 million on a new synthetic leather product called Corfam. With this in mind, many companies turn to disciplined market research as a form of insurance, i.e. as a means of reducing business risk. The next section looks at how market research is used in product development – not only as insurance, but also as a tool to establish needs and to obtain intelligence on market potential.