Article written by Gareth Loudon of Light Minds Ltd

When developing a new product or service many business advisors encourage businesses to undertake market research, and rightly so. Traditional market research work can study different market segments, highlight the size of the market, who the competitors are (and what they are doing) and even future trends for the market. Business advisors will also encourage businesses to undertake a SWOT analysis (strengths, weaknesses, opportunities and threats) to help with strategic planning and encourage them to conduct a study into the protection of their new ideas via patenting. However that is often where it stops. If it looks as if there is a market big enough to make a profitable product, the product is unique in the market and the product can be protected (via patenting or some other means) then businesses are commonly encouraged to dive into the expensive product development phase. After all, time to market is important.
Often, too little attention is given to whether the product actually has a useful purpose, whether the product would be easy to use and whether the product would be appealing to the target customer. Businesses, business advisors and even investors are sometimes guilty of glossing over these issues and relying on a hunch without conducting the necessary research. Businesses who dive into the product development phase straight after conducting market research are taking a very high risk strategy. It seems much more sensible to study whether the new product idea meets the needs of the target customers first, by conducting some initial customer research. Not just to ask customers what they want or if they like the new product idea or not, but to see if the new product could really add value.
Early customer research work can help clarify key product design and product positioning issues that must be right to give the new product a better chance of success in the market. One customer research method widely used in industry today to gain customer insight is called ethnographic research. Ethnography is the study of people’s everyday lives. Ethnography goes beyond questionnaires and focus groups and uses participant observation and interviews to capture and describe customer behaviour, beliefs and values. Ethnography can be used to uncover discrepancies between what people say they do and what they actually do; to identify needs that people can’t articulate explicitly; and to describe how products and services are used and the meaning people attached to them. Please check out some of my previous articles as well as the Light Minds website and links to learn more about the use of ethnography in new product development.
My personal experiences are that far too much money is wasted unnecessarily in new product development because businesses have rushed into the product development phase straight after the market research stage. Finding and fixing problems once detailed prototypes have been made, or even after the new product has been launched on the market is a very expensive way to run a business. Early customer research can help avoid some of these problems and can help put in place a clear product design and marketing plan.

from Gareth Loudon of Light Minds Ltd