End of preview. Want to read all 12 pages? Upload your study docs or become a Course Hero member to access this document Business, Marketing, Entrepreneurship, Chapter 3, 2e, Barringer, Preparing Effective Bus Plans, Chapter Summary Outline, Study Questions Solutions, Feasability Analysis
Have a brilliant idea for a new product? You probably also have a lot of questions like:
A new product feasibility study answers these questions and other key performance indicators. Furthermore, as a product/service distributor, you need to always be thinking of innovative strategies to promote your offerings. Research shows that roughly 43% of professionals think innovation is a key ingredient in any product launch. Keep reading as our market research company defines new product feasibility studies and how to conduct them successfully. What is a new product feasibility study? A new product feasibility study is a market research methodology that aims to provide predictive analytics to guide the next steps for marketing, sales, and product development. The objectives of this type of market research often include obtaining insight on:
There may also be several secondary objectives included in the feasibility study report, depending on your company's needs and specifications. When our new product feasibility studies company conducts this type of market research, we recommended incorporating five different components. The five components include:
We’ll dig into each of these later in the post! 💡 The Key Takeaway: A lot goes into a feasibility study–especially when it’s for a new item. At its core, no matter how you conduct it, a feasibility study delivers insight into how items will fare once on the market. Why are new product feasibility studies important? With the failure rate for new products ranging from 70% to 80%, businesses need to know who will actually purchase the item. Therefore, companies conduct a new product feasibility study to prove demand for the new product and provide data-based recommendations for the next steps when entering the market. Oftentimes companies allot space in their budget to spend money on new product development research to assure they will earn the highest return on investment possible. Another important piece is to have a third-party market research company conduct the new product feasibility study. This reduces bias when designing the research, analyzing the results, and creating recommendations. There are many benefits of using a third-party market research firm, one of which includes having a fresh pair of eyes to review feedback and data. This reduces bias when designing the research, analyzing the results, and creating recommendations. 💡 The Key Takeaway: High ROI and bias reduction are major benefits to conducting feasibility research with an outsourced team. Recommended Reading: Market Research for New Product Development What type of information does a new product feasibility study collect? A new product feasibility study collects both primary and secondary research. Primary research Primary research is newly designed for the specific project at hand. It collects new data and information to meet the goals and objectives of the study. This type of research is original and has a lot of moving parts. For example, primary research is when a brand conducts a project on its own, or with the help of an outsourced team (we suggest you go that route). This is your own personal research, for your own business needs. Think fresh and customized. Here are just a few benefits of primary research:
This research can be conducted in a variety of ways, including online surveys and stakeholder interviews. Secondary research Instead of new data as someone would receive with primary research, secondary research is information that already exists. More often than not, this research will be used in larger research projects. It’s a great way to bolster a project, along with primary research. These are some benefits of secondary research:
Combining both of these research methods into a feasibility study yields the best results. Secondary research for a feasibility study typically includes a demographic analysis and desk research. 💡 The Key Takeaway: Primary and secondary research both play important roles in feasibility studies for new products. They each offer unique insight that can be beneficial for shaping new product perceptions. What are the components of a new product feasibility study? Below is an overview of what’s included in each of the five components of a new product feasibility study. Component #1: Demographic analysis A demographic analysis assesses the information gathered by the U.S. Census Bureau and other reputable demographic data collection sources. This component often includes:
Component #2: Competitive assessment A competitive assessment assesses what is currently on the market. This typically includes investigating each competitor to better understand offerings, price points, and marketing strategies. Ultimately, these findings are summarized in a feasibility study report. They’re used to provide recommendations for the next steps when entering the market. Recommended Reading: Ultimate Guide to Conducting Competitive Analysis Component #3: Pricing analysis A pricing analysis looks at the pricing of the competition and uses survey data to shed light on how much consumers expect to pay for the new product. Component #4: Online survey The online survey piece helps shed light on a multitude of factors such as:
Typically these surveys include 20 to 25 questions and take 3 to 5 minutes to complete. Component #5: Stakeholder interviews Stakeholder interviews are great at answering questions when it comes time to dive into specific questions about the next steps, marketing, and what makes the product more or less appealing. Typically these interviews last 20 to 30 minutes and provide great insight to support the quantitative data findings. For more insights, watch our video on tips for product development research.
💡 The Key Takeaway: There are 5 major elements that go into a feasibility study for new products. From analyzing demographic data to stakeholder interviews, each element plays a role in project success. Conduct New Product Feasibility Studies with Drive Research As you now know, conducting feasibility study research is essential when launching a new product. Drive Research is a national market research company that partners with brands across the country to conduct new product feasibility studies. Whether you are looking to utilize a few or all of the components mentioned in this blog post, our team can help. Contact us today to receive a project proposal or quote!
Emily Taylor As a Senior Research Analyst, Emily is approaching a decade of experience in the market research industry and loves to challenge the status quo. She is a certified VoC professional with a passion for storytelling. Learn more about Emily, here.
|