The only entity from which a product obtains its value is the market. Without the approval of the market, a product is bound to fail. However, there are times when the initial approval of a product by the market was a laggard, but the market got used to the concept of the product over time delivering satisfying sales numbers.
Yet, it is always safe for a product to get market approval during the initial days. This is when market research or market analysis comes into the picture.
The Target Audience
Market research involves participants from a target group. This is the group of people who are could be the potential customers of the product. A person from the target group of product A might be a male in the X-Y age group with an income of Z per annum. It is essential to choose the participants carefully.
When it comes to market research, two things should be confirmed. They are as follows.
1. Functional priorities
2. Design preferences
Functional priorities deal with the characteristics of a product which the market is interested in. It is relatively easier to predict than the second point. For example let’s talk about the next mass market motorcycle from Honda. When it comes to the functional priorities of a motorcycle in this segment, the usual contenders are fuel efficiency, reliability, relaxed riding characteristics etc followed by design. On the other hand, talking about the next street fighter from KTM, the top preferences would include styling with points like fuel efficiency taking a back seat. This is a reflection of the expectations of the target market or the target segment. However, for a company it is important to evaluate constantly whether the market actually wants what the company thinks it wants in the priority it thinks it wants.
Design priorities deal with the likeability of a design when it comes to the potential customers. As said earlier, a mass market model could have either a semi-faired headlight design as well as the traditional round headlight design. These designs sketched out by the designers are shown to the customer simultaneously. Ratings are then taken from the highest to the lowest.
Market analysis at this stage is more important for some companies as compared to others. The companies that serve to the mass market at a lower profit margin might find this extremely important as their products would usually be generic and their break-even sales number would be higher than a company that sells to a niche, with a higher profit margin. This would mean that an unsuccessful product launch would hurt the mass market sellers more than a niche seller.