Market research is an essential aspect for any product before it is launched, It is one of the most powerful tools to understand how the users are going to receive your product and how to make them try the product you are trying to launch, which defines the profitability of the product.
Before we directly get into the market research, the very first step required is to understand if the product idea you have is profitable or not. There is a framework defined and used in some of the teams which are open to evaluating their product open-minded and the framework is called Demand Metric.
Demand metric is a simple but most effective framework to use before directly doing market research.
Demand metric shows you a mental model of how much demand there is for your idea, It divides the evaluation metrics by Price and Customers (You will see the Price is divided into Low Price and High Price) and the customers divided into Few and Many).
Now it is obvious that everyone wants their product to be priced at a higher price and get a lot of customers. However, not all successful products are needed by many customers and are high priced. there are successful products in all the models mentioned above. Let’s get into each of them in detail in this market research for a new product guide.
- High End: Means high priced and fewer customers : There are lot of successful companies in this Section in Many business categories such as louis vuitton, Chanel, Rolex and even prado and Rolls-Royce of the likes in Automobile category, these are highend brands successful brands eventhough the vast majority of the people dont buy their products.
- Golden Goose: The golden goose is a category that the price is relatively high but many people will wants and uses the product. Think about likes of iPhone. Lot of people or organizations want to build products that fall in this section.
- Mass Market: Here the amount of price is low but the demand or the number of customers are more which means it is mass product. there are lot of successful brands in this section for example Jira, Confluence, McDonals, Dominos, etc
- Labour of Love: This is kindof a danger zone for the brands / organizations falling in this category which means there are very few people to use and the price is also lesser. Lot of products belive that they are building niche product out of their passion for their audience and endup facing probles to sustain becasue there are no enough customers to pay for it.
So the idea of the demand metric framework is to identify where the demand is there both in terms of price and customers. You must identify and put your product in one of the above sections, Now the question is how to identify where your product fits in this framework?.
This is where the understanding of your audience for the market research for your product begins.
We will be using free online resources such as simple google searches and forums like Reddit, Quora, etc to do this market research that works for any product or service.
here you will divide your audience research into 6 parts,
- Who are they?
- what are their hopes and goals?
- what are their Pains and fears?
- what are their Obstacles?
- what are the Solutions they are looking for?
- Cool stories, insights, metaphores, quotes, etc
While we do this we will take an example and move ahead with understanding the audience a little more in detail.
- Who are they?: this is where you understand who are your audience, howmany type sof audience exists, what are thier needs, etc. For example, In the world of fitness business as example, we can see some of the audience are like below (base dont the google results that appeared when i search for for various fitness related keywords in google.
- Testostorone (Ex: T-nation)
- Normal guys living normal life (they might depend on self learning like reading in a blog/Youtube and practicing themselves)
- Nerds/Gamers: tehse are the audience who are active fitness seems who are active video gamers.berds. this shows the interest of the audience you are aiming for.
- Skynny-Fat guys: there a lot of skinny fat guys who want to be fit by doing various ftness activities. they are less responsive and wants a unique solution to convience them.
- No time to workout: there are lot of audience who believes that thy dont have time like busy professionals, thesea re kind of people who are ambitious, they want results and they want fast. It doens’t matter for them if it is hard or not what they need is fast.
- Beginer vs advanced:
- Need more scientific / data to be backed for the solution
the next step is to identify what people are like in the category of business you are in, to do this In the weight loss category, You can look for the top 10 products in the market, you can simply go to amazon look through the reviews about the products/books and identify top-rated reviews and understand what makes them feel good about the product/books. Also, don’t forget to read 1 and 2 rated reviews to know what they are not liking about the product/books. If you read those reviews, you will clearly understand what they’re expecting from a product and what they don’t live to have in it.
2. What are their hopes and goals? Here idea is to understand what the audience is trying to achieve by using your product/service, how it will help them to better their career, or some, time, etc. In this example of fitness, people are looking at other benefits along with getting fit. Some of the other benefits of fitness are
- how people will treat you
- how you thing and
- how you feel about being fit – its not just fitness.
There are important things to know because you are trying to understand the mindset of the audience to get used to any product or service.
how do you get the above information: It is simple you just have found some discussion forums like Quora, Reddit, etc – people discuss a lot of things there. You just have to find the relevant discussions and read the user’s comments, remember it is not easy to do.
3. what are their Pains and fears?: It is an important aspect to know the pains and fears of your customers to use the product you are trying to release. this step will tell you what kind of problems you are solving that actually faced by the consumers.
In the fitness business example, I found some of the problems people facing are:
- I feel like People are judging me
- Gym is too far from my place
- i dont think it works
- i dont like people watch me
What we are trying to do here is understand the problems faced by the audience and try to see if our product is the fit for their problems and fears.
4. what are their Obstacles? : What is stopping the audience from using the product/service in your category.
- I never get motivated to workout
- I dont belive this works at all
- Accountability, etc
Also, it is important to worth note is that reading online comments/messages are not just enough to come to the final decision because you don’t know who they are, it is also important to talk to the real people – You can call some of the audience, send them a form to fill or take them for lunch so that you validate what you read/understood using free online resources.
5. what are the solutions they are looking for?:
Now comes the real question, After understanding the audience, their problems, hopes, goals, pain points, Obstacles, and also the competition, you need to do 2 things
- How your product solves the problems faced by your customers and adds them move value to them by using using your product. write down those poitns of what additional values you /your product does to the consumers.
- Are you ahead of your competetion in providing that value addition to the user, If yes, List downthose points and see if they are solving the problems that are not done by your competetion, it is not just the price everytime.
6. Cool stories, insights, metaphores, quotes, etc
As part of market research for a new product – it is also good to know about some of the success stories, of the people who used your product/competition product and what do they feel about the products and understand the receivability of the product in the market.
Finally Summary is: You need to collect a lot of data about this idea such as users, their pain points, hopes, Obstacles, and existing solutions available in the market already. It is always recommended and effective to read through all the commends manually and keep the important comments stored separately for future reference and validate your research points. It is never a bad idea to put someone else to read through the comments and give you what they like/summary of the word list. It is you, who need to understand your product, your audience.
Source: watch here