New Product Development Research

Needs Exploration Research
Purpose and Benefits
New product development research typically involves two phases of research: needs exploration research (explained here), and new product concept and features testing (explained below). In the needs exploration research phase, companies look outside the confines of their engineering departments to come up with ideas for new products. Customers, particularly heavy users of a product or service, often have a wealth of excellent ideas for new products. Instead of making incremental improvements, research with heavy or expert users (or "early adopters," as explained by Geoffrey Moore in Crossing the Chasm) of a product or service category can help to develop completely new ideas for products or services that can give a company a large competitive advantage.

A very effective method for conducting this initial type of needs exploration research is to recruit a group of "experts" or "early adopters," that group of people which can be both customers and non-customers, who are heavy users of the product or service. By setting up an "expert panel" you and your research firm can periodically "pick their brains" to generate new product or service ideas based on needs and functional areas of usage that are not currently being met. These panels can be a great source of ideas and new direction for the company.

Key Questions Answered:

• What do our customer markets need that we are not seeing?
• How should we meet these needs?
• Should we extend our current offerings in ways we haven’t considered?
• Should we develop completely new products?
• Are there markets for our existing products or that we haven’t considered?
• What are the emerging user markets?

Techniques

• Qualitative research - focus groups or triads
• Expert panels

New Product Concept and Features Testing
Purpose and Benefits
The investment into new product development can be large, so it makes sense
to make sure, first, that the concept itself is something the market would
be interested in and that, two, the specific features and capabilities of
the developed product are in the form that the market would like to see. In
both these cases – initial concept testing, and subsequent features and
capabilities testing – the relatively small outlay for research can help to
avert failed new product introductions and large amounts of wasted R&D
money.

The early adopter-types noted above are researched because typically they’re
interest level in a prospective new product or service will reflect the
subsequent interest of the broader market. The results from this first
phase of new product research will tell a company whether it is worth the
R&D efforts and budget to pursue the product concept further. Spending
money on this upfront research can potentially save companies millions of
dollars by avoiding pursuing R&D of a product that has little chance of
success in the marketplace. On the other hand, if the product concept shows
promise, then product prototypes can be developed, with various feature
sets, for subsequent testing with prospective customers.

Once a product concept has passed muster, the next step is to develop and
test actual product prototypes with various feature sets. This step is
conducted with next level of the market, referred to as the “early majority”
or the “pragmatists” by Moore. This portion of the market is much larger
than the early adopters, and if a substantial portion of them are compelled
to purchase a particular product, will provide the momentum to drive the
product successfully into the rest of the mainstream market.

By laying out several product “options,” differentiated by various feature
sets and capabilities, we can make a determination as to what will be the
set of features and capabilities that will be most compelling to the target
audience and help to ensure product success.

Key Questions Answered:

• Overall, does this product concept generate interest? Why or why not?
• How can we increase product appeal to prospective customers?
• What specific needs does the target audience see this product addressing?

• Qualitative research - focus groups, triads or one-on-ones.
• Expert panels
• Prototype testing using diary methodology