The Role of Marketing Research in New Product Management

Most all agree that a successful new product comes out of the marriage of customer need and technical capability. The role of marketing research in new product management is primary; assisting the development of new product ideas and providing the market based information for each gate decision of the new product process.

Good product ideas come from many sources, not just the marketplace. Technology based innovation strategies drive many successful businesses; they must develop specific technology new products and seek markets for these. Other successful businesses have innovation strategies based on market definitions. Both have need for market based information to succeed in generating good new product ideas.

Figure 1 Marketing research input to Stage-Gate^® decision

Figure 1 shows the marketing research inputs to each of the decisions in a stage-gate process. The kinds of information used in each gate are shown in the arrow box on the right. [see New Product Process for more information about Stage-Gate^® processes] This information is developed in the previous stage. The first gate decision is the initial screen shown in Figure 1 above. Most of the information in the first screen is driven by the New Product Innovation strategy. That is, the technology, production and markets specified in the innovation strategy insure the new product proposals fits. However, whether the product will achieve enough demand to merit additional development requires some input from potential (or existing) customers. This is the nature of the information secondary data and qualitative marketing research can provide.

The second screen requires a preliminary marketing research study that provides sufficient data to assess the desirability of the New Product definition at this early phase. Information such as market size, customer value for the preliminary product concepts which lead to a preliminary forecast of unit sales and preliminary financial analysis is needed. This is more expensive and time consuming than the marketing research activities for the previous screen.

The development screen, or third screen, requires more in-depth marketing research because the next stage is development which requires significantly more investment than prior phases. The market information required are customer value, preference and purchase intention to specify the attribute levels of the product to develop in the next stage. This requires information that most often is produced using conjoint analysis in a representative random sample for optimizing the design.

After development the testing screen is applied to the prototype product produced in the development phase. The nature of the test depends on the product/market type. Consumer consumables have a history using test markets, durables may have different testing to validate the designs, while pharmaceuticals have a very specific clinical trial requirement set by the FDA. Marketing research plays a major roll in consumer products. For industrial products, the nature of the marketing research required at this gate depends on the completeness of the preliminary marketing research and whether the product developed matches exactly the product concept specified. Deviations from the specified concept may require marketing studies to be repeated.

The marketing program must be developed and specified before launch. A marketing research program that specifies the product concept (core benefit proposition), the product positioning for each targeted segment and the recommended price and sales forecast in each segment is the input required to for the launch screen. Conjoint analysis is a primary technique used for these purposes. These data are basic to develop the marketing launch program.
 
CMC has the knowledge, experience and satisfied clients for marketing research projects in each of theses decision phases. See Marketing Research Examples. To discuss your new product marketing research challenges Contact CMC.