Why market research before product launch is important

Lazarus Beauty and Lotions Company wanted to come out with a winning soap that would take the market by storm.
The market for soaps was a tough one with not only recognised brands but also a deluge of copycats chipping away on sales. To penetrate in such a market, one needed to come up with a winning product.
Though the company had a number of soaps out there, still they had not come up with that winner. There were those who wanted to stick with old brands but the problem was most had peaked their sales and were losing ground to new entrants.
A few were for investing in a new soap but no one seemed to agree on what type of soap the market needed. In comes Muteleeza who had a marketing research background.

Key questions
“If we want to come up with a winning soap,” Muteleeza shared with the top management committee, “let us start by doing research. We need to know the size of the potential market. What segments is that most eager to use our soap by age and gender? Where are they? We should know the disappointment with other soaps. How big should our soap be and price? By understanding our consumers, we can create a best selling product.”
“How do you intend to go about that?” Mukulu, the gray haired managing director asked.

Hiring experts
“I suggest we first put together a research committee,” Muteleeza offered. “We should have a psychologist on it to help us understand what motivates people to buy different types of soap. There should be a designer who can come up with the right blend and size. We also need a herbalist since there is a demand for medicine soap and a statistician.”
“Wont that be very expensive?” the MD shifted uneasily.
“It is a necessary investment,” affirmed Muteleeza. “This is how the best companies launch new products. Short of this, we would be just hitting in the dark.”

How others have used it
Carrying out market research for company’s before introducing new products is a proven strategy that yield results. It has its roots in quantitative management that believes facts should guide management decisions.
In the 1950s, Ford Motor company before launching a new car, put together such a research committee. It famously had membership from the different age groups to gauge the type of car desired. It had an aesthetic designer. There was a woman on it to share what car women liked. The new car committee came up with the Ford Mustang, which instantly became the bestselling car of its time. Since then, many manufacturing companies invest heavily in research before product launch.

Research is not everything
While carrying out research is important, it is not necessarily a ‘magic bullet’ that certifies product success.
Whereas the research may point clearly to the type of product desired, there are certain factors which cannot be easily be measured. For example, the launch of a new product may suffer from poor timing such as an economic downturn, shifting the spending habits of consumers.
The research might also not be rigorous enough to yield the right data and the company may rely on flawed information. Management issues can also affect the success a new product.
Hence, research, while useful, should be one of the many key factors to consider in product launch.

Why fail?
Here are some reasons why some new products fail on the market:
Company can’t support fast growth. It’s better to have a plan to ramp up quickly if the product takes off.
The product falls short of claims and gets bashed. Delay your launch until the product is really ready.
The new item exists in “product limbo.” Always test the product to make sure its differences will sway buyers.

The writer is the Dean of the Faculty of Business and Administration at Uganda Christian University, Mukono. E- mail: [email protected]