The Role of Market Research in Product Development Stage Gates

The Role of Market Research in Product Development Stage Gates

When crafting a new product or enhancing an existing product, you must understand the problem you're trying to solve, evaluate product opportunities within your category and define a marketing strategy to impact product adoption. Enter, primary market research.

Market research plays a role at every stage of product development, from identifying needs and opportunities to how you go to market.

You can apply both qualitative and quantitative data to create a product that will satisfy your customers’ needs and align with their motivations. Market research also provides insight into what factors influence purchase intent and how to strategically price your new or enhanced product to appeal to your target audience. 

Further, identifying where there are gaps in the market or where demand decline could signal a need for true innovation are common insights gained from custom market research.

What is a Stage Gate Product Development Process?

Creating a new product or enhancing an existing one doesn’t happen overnight—and it doesn’t happen without a meticulous decision-making process.

Typically, product development is broken down into five distinct phases or stages: 

  1. Discovery and exploration
  2. Concept screening
  3. Concept testing
  4. Feature and benefit validation
  5. Launch 

Within a stage gate product development model, each stage is separated by a metaphorical “gate.”  Some gates are more qualitative in nature while others are better suited for quantitative research.

In practice, that means your company stops at each gate to evaluate the project and decide whether to continue the development process. Your other options are putting the project on hold and completely abandoning it to avoid further investment or loss of resources. Market research is what you will utilize at each stage to conduct your assessment and make your decision about advancing to the next phase.

How to Use Research for the Five Product Development Stages

When crafting a new product or enhancing an existing product, you must understand the problem you're trying to solve, evaluate product opportunities within your category and define a marketing strategy to impact product adoption. That’s where primary market research comes in. It helps you gain insights into your customers, the market factors and internal factors that impact the process.

Product Development Stage Gates, The Farnsworth Group

If you’re utilizing a stage gate process for new product development, here is what you can research during each phase and how the data will assist you in deciding how to proceed past each stage gate:

1. Stage Gate 1: Discovery and Exploration

The first stage of product development is identifying needs and opportunities that justify investment into a new product or significant improvements to an existing product. At this stage, you can use research to conduct a preliminary market assessment and look for any unmet market needs that you can fulfill. Is there sufficient market demand for a new product? Is there a customer desire for innovation?

Thinking about your target audience, you’ll also want to take this time to identify the needs and desires of end users. Do the current products available on the market meet all their needs? If you discover the right opportunities within your market, then you’ll feel comfortable making the decision to advance to the next stage.

Are there new demographics entering the home improvement market? Consider, for example, how the rise in Millennial first time home purchases is affecting purchase paths for home improvement products and “Do-It-For-Me” Contracted Services. How this demographic researches, purchases, and installs home products is different.  How are labor challenges impacting contractor product needs, install time and skilled labor requirements for products they use?

Building Products Customer Guide, Download

2. Stage Gate 2: Concept Screening

The second stage of the process involves screening product ideas to capture feedback on possible improvements and hurdles that would increase adoption. During this stage, your market research will focus on identifying ideal target markets and understand what elements of the concept ideas they like and why. This involves delving deeper into the concept perceptions, priorities and motivations of your customers. 

  • How would they use the product in the question, including when, where and why? 
  • What improvements do they want and why? 
  • What is the ideal solution you can offer within the product or sub-product category? 

Additionally, now is also the time to complete a thorough market assessment that includes evaluating the competition. Your primary goal during concept testing is to determine which concepts stand out, for what reasons, and in what ways product adoption could be increased through concept modification.  That should leave you with a limited set of refined concepts.

3. Stage Gate 3: Concept Testing

Once you’ve screened your product ideas, refined and developed a small set of more concrete concepts, it’s time to put those concepts to the test by evaluating what your customers prefer. With market research, such as surveys and interviews that utilize MaxDiff Scaling, A/B Testing, or Monadic testing, you’re able to collect user feedback and determine which concepts have a higher rate of acceptance and what final improvements could be made to adjust the concept to buyer preferences. 

You can hone in on the perceived benefits of a concept and which features resonate most with your customers, as well as how likely they would be to buy the new or enhanced product. This stage of market research is also helpful for starting to develop your competitive, channel and communication strategies. This go to market strategy involves defining how you’ll distribute and promote the product to ensure its success. 

4. Stage Gate 4: Feature and Benefit Evaluation

If you determine you have a winning product concept, you’re ready to move onto the next stage: product testing. With research, you’ll continue to test the market, but now even more specifically in order to refine your go to market strategy. At this stage, you’ll better define your value proposition, messaging and marketing by capturing quantitative feedback to validate features and benefits you learned were important in prior stage gates. 

  • How much do certain features impact preference? 
  • What benefits resonate most?
  • What should you communicate to attract the widest audience?

As you’re finalizing your concept, you’ll also want to start researching market opportunities by specific distribution channels.

5. Stage Gate 5: Launch

Finally, you’ve reached the last stage, which results in the launch of your product. Before you pass this stage gate, though, you have to complete some final market research, such as a price elasticity test. The key is understanding how certain features influence purchase intent and price sensitivity. 

  • Which combinations of features are most desired and at what price points? 
  • How much would they be willing to pay for this product? 
  • What is the ideal set of features to include on the product at various price points?

Ultimately, you must determine which combinations of features are desired and at which price points so you can develop a pricing strategy. At this stage, you’ll also conduct research into the optimal packaging and display options to appeal to your target audience within various channels. 

  • Where do customers seek to make a purchase?
  • Where do customers conduct product research?
  • What impression do customers have of your product and brand based on packaging?
  • What barriers to purchase can be overcome?
  • What messaging resonates most deeply with target buyers?

With a finalized concept or product enhancement and a solid go to market plan, you’re ready to launch your new or improved product. 

Market Research For Product Development

Developing a new product is a big decision, as it requires a substantial financial investment, as well as time and energy from your team. It’s not a decision to be made lightly. Utilizing market research can give you hard data to support pursuing and investing in a new product or enhancing one you’ve already created. 

The Farnsworth Group has research tools and solutions that can be incorporated at each stage of the product development—from product ideation to concept validation to aiding your pricing strategy and messaging—so you’ll have the insights and information you need to go to market with confidence and clarity. 

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