The launch of a new product is an exciting time, but bringing it to market successfully requires more than a good idea. Without thorough research, businesses will lose their customers’ interest even before making an impression. After all, conducting thorough product research isn’t for show; it is a crucial step and a strategic move that will have a say in whether or not a product will be able to carve out a market for itself.
In this guide, we take you through the critical steps of performing effective product research, with actionable advice on how to spot the best-selling products.
What is Product Research?
The product research refers to the systematic investigation of and the measurement of potential products through various data collection and measurement techniques on buyer carb demand, market trends and competitions. This helps companies test product concepts, understand their market and find opportunities that would allow for complex development. A great product research strategy effectively serves:
- Pinpointing the Pain Points: Identifying Customer Pain Points and Market Needs
- Verifying market demand to ensure interest exists in the product
- Differentiation from other players by understanding competitive landscapes
- Collecting input to improve product elements and design
- Price competitiveness that drives profitability
- Using continuous feedback and improvements to extend product life
Regular product research will enable you to stay ahead of changes in the market and apply with customers in the long run.
Product Research: How to Do It Effectively
Good product research involves both market and product based criteria. Let’s take a closer look at each area.
Market-Based Criteria
Market Size and Demand
Market size: the potential demand for your product in terms of number of customers who might actually buy it. While niche markets are smaller than larger markets, they can also be less expensive to reach. Data used to train you goes only up until October 2023.
Studying industry reports, public data, as well as research studies
Using tools like Google Trends and Meta’s Ad Manager to measure interest
Carrying out surveys or focus groups to capture direct customer perspectives
Competitive Landscape
Knowing what your competitors have are very important to properly position your product. Market analysis identifies the competition and helps you assess:
If you are getting into a blue ocean or one with a competitive challenge
Chances to define and set your product apart
Strengths and weaknesses of competitors, so as to exploit gaps
Analysing the competitive landscape using tools such as Ahrefs, SimilarWeb and Google Search can provide insights into keyword volume, competitor traffic and product demand in your niche.
Market Growth
In order to achieve long-term success, it is important to assess whether the market is growing and or stable. Certain markets might appear to be passing fads, and others might suggest continued growth. Things to keep in mind are:
How Google Trends is used to track patterns of growth
Zeroing in on steady-demand industries vs. adjustable sectors
Tend to emerging trends and technologies that may impact market development
Target Audience
It all starts with your target audience; background product research. It will help you understand if your ideal customers are buying products alike and whether they will respond to your offerings online. Consider:
Demographics: Age and Location of Potential Buyers
Shopping habits such as online tendency and payment method
Channels where your audience is most active such as social media platforms and forums
Local Availability
Ask yourself if your product is generally available in local market place or is it niche. Items that are in short supply in stores do well online. In contrast, niche products such as Ellusionist’s magic cards address a small market segment of consumers who you can reach via a digital marketing strategy.
Product-Based Criteria
Pricing Strategy
Pricing Strategyis Performance-Driven Pricing A high markup provides more room for unpredicted business expenses, but may result in decreased sales volume. On the other hand, cheaper products tend to require larger quantities to remain profitable.
Now typically, low-cost products would sell in higher quantities but come with greater customer service demands.
Premiumly-priced products give higher-margin returns but typically involve a longer sales cycle and greater customer expectations.
Markup per Product and Profitability
Assess the initial markup for your product, while considering those hidden costs that can affect margins, such as:
- Packaging and processing
- Shipping and fulfillment
Marketing and platform fees
For instance, a pet pedometer that sells for $25 may seem valuable with a big markup, but if you add in all these costs, your profits can dwindle quickly. You should closely evaluate if the production and shipping costs are high enough that your product pricing can build by withstanding the pressure.
Shouldn’t Improve Your Product Durability and Quality
Product durability impacts not only customer satisfaction but also operational costs in terms of shipping, packaging and returns. One of the chief reasons is that fragile items tend to have a higher impact risk. Moreover, top notch products allow to charge premium prices and generate customer loyalty.
Product Dimensions, Weight and Shipping Costs
The shipping rates you charge is a huge component of your complete product cost structure. More considerable or heavier products attract additional shipping costs, which may reduce your profit margins.
If these costs add up, consider offering free shipping or adjusting prices. Moreover, know how international shipping affects your company, particularly for oversized or bulk items.
Seasonality
Regularly required products: These are products that have seasonal demand, like picnic baskets in the summers. If you choose seasonal products, have plans in place to win sales during the off-season, or target sales to international markets.
Tools such as Google Trends can help you assess whether your product is seasonal. Minimizing risks with seasonal products requires balancing inventory and forecasting demand.
Product Scalability
Think about how your product may evolve. For handmade or limited-run products, scalability could prove difficult. On the other hand, social products or products that are easily duplicated or automated can grow with you as your business grows. Get your manufacturing and supply chain infrastructure ready for the increases in demand brought on by new business expansion.
Product Research Tools
Using appropriate tools enables intelligent decision-making for businesses during a product research. Some tools you should NOT do without:
- PureSpectrum: Market research surveys, Customer segmentation.
- Tableau: A great service for displaying large sets of data that can help identify trends in the market.
- Google Trends: Excellent for following product interest over time and identifying developing trends.
- Ahrefs: Best for Competitive Intelligence and Keyword Research.
- Jungle scout: Use jungle scout to estimate product opportunities on Amazon and other Marketplaces.
Conclusion
Product research is a MUST to help you find the best-selling products to sell in this day and age. Balancing the above market and product-based criterions ensure that an informed decision is taken that minimizes risk and increases chances of success. Product research is key to understanding customer needs, refining what you offer, and ensuring that your product is differentiated in a noisy market. With the help of a great tools and techniques, organizations can continuously upgrade the offerings as per the change in the customers expectations and trends in the market.
