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Product Research--PR lets you understand what customers really want, allowing you to tailor your commodity offering to meet their needs and giving you a real competitive edge. “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 commodities like a magnet. Introducing new commodities 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. The word "new" is sometimes over-played in marketing because it is so frequently used for everything from conceptually new commodities through to old wine in new bottles. The main types of product development are as follows: New concepts – completely new commodities that have arisen as a result of innovation and which can sometimes create new markets. Additions to existing commodity lines – new commodities that supplement established commodity lines. For example, a supplier of industrial gases may introduce a new, smaller cylinder to include in an existing commodity line, aimed at serving customers who require smaller amounts of gas. Modifications of existing commodities – existing commodities that are modified in order to better meet customer needs, such as improved performance. 90% of new product research is focused on commodity 'additions' and 'modifications' rather than on the concepts. There is nothing wrong with this. Commodity improvements are obvious developments and are much more easily accepted than conceptually new commodities. In fact, the more conceptually new the commodity, the riskier it can be. Many companies turn to disciplined market research as a form of insurance, i.e. as a means of reducing business risk.
Many companies recognize the importance of "new" and for this reason they allocate substantial sums to research and development. Electronics companies may have an R&D budget equal to 15% of their sales, but this is required in order to cope with the rapid pace of change in their sector. Over 90% of all innovations that are successful start in the wrong direction and are not the outcome of good market research. In fact, many new and successful commodities arise by accident and not as a result of hours and hours of focused R&D or significant financial investment. Indeed the telephone, X-rays, bubble gum, Velcro, Viagra and Post-it notes – to name but a few examples – were all invented by accident. In the case of Post-it notes, for instance, a researcher at 3M was eager to create the world's best glue, but actually ended up creating one of the worst glues ever – one that didn't stick – which nevertheless ended up as one of 3M's most successful commodities: that of the ubiquitous Post-it notes.
New PR helps you refine commodity designs and plans before committing yourself to expensive Product Development--PD costs. Whilst continuing commodity testing and research can drive innovation, keeping you one step ahead of the competition. PR is a vital part of new PD. At every stage of the process, PR can help you identify key issues and avoid expensive mistakes. Initial PR can be used to evaluate new commodity ideas. Testing the concept alone like this can help you discard unpromising ideas, allowing you to concentrate PD expenditure on more promising new commodities. As the new PD process continues, PR helps you identify the key factors that matter to customers - showing you what to focus on. PR can link in with other aspects of marketing. For example, it can help you assess how much customers might be willing to pay for new commodity features. Research can also be used to assess other aspects of commodity design, such as commodity packaging or names. In the retail sector, PR can be invaluable. The findings can help convince retailers to stock your commodity and also present information on the best means to display and promote it to ensure the best possible chances of success. Once a commodity has been launched, PR often focuses on customer satisfaction. Together with research into competing commodities, PR like this can help you refine the marketing of existing commodities and inspire ideas for commodity improvements.
Not all new commodities arise by accident, however, and market research can play a role in determining the need for most new commodities. There is the story of William Conner, a medical salesman, who decided he wanted to set up his own company. Conner sought new commodity opportunities by visiting surgeons and asking them about the challenges they faced in their work. In these interviews, Conner learned that the process for cataract surgery involved a difficult task for physicians, in that they had to cut a ligament which was an unpleasant and risky move. Conner then discovered an enzyme which could dissolve this ligament (thus eliminating the requirement to cut the ligament), as well as a means through which the enzyme could be preserved until it was required in surgery. The innovation was a success, which led to Conner patenting his compound and meeting an unmet need in the industry – all thanks to market research which played an instrumental role in discovering and unleashing the market opportunity. In the case of the cataract surgery, market research provided invaluable insights into unmet needs and a thorough understanding of the environment in which the new commodity would be sold. However, caution should be taken in terms of the expectations of market research, for it cannot be assumed that conducting research with the market will uncover sizeable opportunities and lead to the conception and launch of new commodities. It is the role and responsibility of the researcher to use the understanding of the needs of the market to find applications for new commodities that will satisfy these needs. The market cannot be expected to announce what the new commodity should be, and market research respondents cannot play the role of R&D Director! Furthermore, it cannot be assumed that market research is an exact science, as it would be unrealistic and unreasonable to expect market researchers to predict the precise demand for a new concept, given that there are numerous variables that can impact demand outside of the market researchers' remit. It takes years to get a commodity to the commercialization stage, let alone to get it well established in a marketplace. Market research should be regarded as an experiment which may fail if it is not conducted in the right conditions.
Indeed, innovations that require potential users to try something new (which is likely to involve a change in mental attitudes) are difficult to research, given that potential buyers or users – when asked in an interview or focus group – cannot be expected to imagine using a commodity and to then state how likely they would be to buy it, or to state how much they would pay for it, without sufficient time to fully consider the commodity, or possibly trial it in the environment in which the commodity would be used. Imagine asking people prior to the launch of the Sony Walkman what they thought of the concept of a transportable music player that they could listen to on the move. Since people would have difficulty conceiving the notion, it could have received the thumbs down. Nevertheless, market research can explore the underlying needs of the market and make a judgment as to how well a new commodity meets these needs. Hence it is the researcher, and not necessarily the potential buyer or user, who makes the connection between the unmet needs and the new commodity development opportunities. Key questions that should be asked in any concept screening research include the following: Is the purpose of the concept clear and can potential users be persuaded of the commodity's benefits? (This will show the clarity and purpose of the offering.) Does the commodity meet a need? What is the specific nature of potential users' requirements? (This will assess the demand for the commodity.) How are existing commodities used, i.e. for how long, how frequently, precisely what for etc.? (This will show the behavior of people buying existing commodities.) What challenges do people face in using existing commodities and what requirements are not being met? To what extent are users of current commodities satisfied with these commodities and their suppliers? (This will identify any gaps in the market.) Is the price reasonable in light of the concept's perceived benefits? (This will show if people are prepared to pay an appropriate price for the new commodity.) How likely are potential users to buy the commodity? (This will show purchase intent, i.e. how many people are likely to buy the new commodity – at least at face value as this will certainly be affected by the promotional push.)
Companies can be guilty of claiming they already know all the answers. This appeared to be the case with Sony, which had not conducted enough market research prior to commercializing its e-Villa Internet appliance. This new commodity was intended to enable consumers to have internet access from their kitchens, but the commodity failed as it was simply too heavy to lift at nearly 32 pounds and 16 inches. Consequently, the commodity was withdrawn after just three months. However, had Sony conducted more market research, it could have potentially saved a considerable amount of money in terms of the financial and human resources that were required in the commodity development and commercialization process. A further point to consider in the pre-birth stage is that it is not just the commodity that needs to be right prior to commercialization; it is everything surrounding the commodity, such as the packaging, services (e.g. technical service) and marketing. The design, coordination and commercialization of all of these aspects can take many years, especially in the case of industrial innovations, which have been known to take decades. The information in the above 6 paragraphs are provided only for your knowledge.
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