The Disadvantages of Market Research on New Product Development
Companies need to develop new products when their older products reach the end of their life cycles. They also produce new products to upstage other competitors, as was the case when Google introduced the Android operating system to prevent the domination of the technology market by one supplier. Before developing a new product, you should conduct a market research to determine your product’s potential market. It involves regularly testing and validating customer preferences for the new product. However, market research has various disadvantages on new product development.
Conducting a market research for a new product can be costly. For instance, you may have to hire a research company to conduct the research for you. According to market research firm B2B International, research costs about $20,000 for a small target market, as of 2013. For a small business, this can be a high cost to incur. However, developing a product without doing market research first can also be costly, since market research helps you develop a product that your customers truly want.
A biased population or a poorly formulated research can result in false or inaccurate feedback. Plus, market research on new products developments may only reveal customer attitudes about your new product such as the intentions to buy it. However, these intentions may not translate to actual sales in future. Market research also affords you a small focus group, which may give you inconclusive data about your new product.
Market research involves a detailed process of collecting and analyzing data, which is time-consuming. Also, for you to have a relevant market survey, you have to collect and analyze the data within a given time frame; otherwise it might easily become outdated. You also need to make quick decisions regarding the product to gain a competitive edge over others before you lose the available market opportunity. Allocating all the market research processes in your constrained timetable can be difficult.
The period over which a market research data is relevant may be limited because market parameters keep changing. Data collected for the purpose of launching a new product may be outdated by the time the product is ready for a market launch. To ensure that your research stays relevant, you need to constantly monitor changing market conditions and update your data accordingly. If you fail to update your data, the survey might not give a true reflection of the reality on the ground.