Conducting market research as a product manager
Product managers decide the product vision and are responsible for making sure that product solves the problem its designed to solve. This involves constantly gathering feedback about the product, understanding customer behavior, keeping up with latest trends and keeping tabs on competitors. For this, they constantly need to do market research and understand how the needs of consumers are evolving so that the product is upgraded accordingly.
Most of the startups fail and this happens majorly because they build the product without understanding what problems to solve. They try to find the problem for their solution rather than going the other way round. Thus, doing market research is one of the most important skills product managers need to have.
In this article, the general steps to do market research are mentioned along with what role product managers play in it.
As a product manager, one’s role in any market research exercise is similar to the captain of the ship. They are responsible setting the direction of the research and need to specify what results should be obtained or what the research should accomplish.
Many times, product managers feel that researchers told them stuff which they already knew, which made doing the research, a waste of resources. In this case failure is majorly due to product manager. It is product manager’s responsibility to work closely with researchers and guide them in conducting research by clearly specifying what end results are expected, set a clear and concise problem statement and research objective.
Based on figure 1, the major steps which product manager needs to take to do market research are:
1. Determine how the research results will be used.
2. Determine how final report should look.
3. Determine what kind of data is needed to this analysis.
4. Collect the data.
5. Continuously validate if data collected is relevant.
6. Write the report.
This ensures successful completion of the market research which is full-filling for all the stakeholders.
Research undertaken is often of two types:
1. Exploratory research
2. Confirmatory research.
Exploratory research: This involves discovering opportunities, analyzing trends, analyzing social media feedback, and continuously monitoring how product meets the market demand. Not doing this research or incorrectly doing it, incurs opportunity costs. There are no discoveries, no recognition of alternatives, and no insight.
While doing this research usually open-ended questions are asked. E.g.
What the user wants?
Why is user not using the product?
What are the different segments which should be targeted?
Confirmatory research: This involves seeking a resolution for the problem. This is done for eliminating the options and to find the solution. Not doing this research or incorrectly doing it, incurs direct costs.
While doing this research usually close-ended questions are asked. E.g.
Is option A or option B correct?
How much will market share increase if a new feature is introduced?
Major steps mentioned in figure 1 are essential for doing both types of research.
Example of market research:
Scenario: Market share of the product has fallen in a particular region. It was noticed that product prices were raised, and a new competitor was offering more varieties and lower prices.
Here there could be multiple decision problems like:
1. Should new product varieties be introduced like competitor?
2. What should be the revised price?
3. Is it possible for us to lower price than competitor?
To prioritize the decision problems one should use domain knowledge, experience and understand the context. Using qualitative and quantitative methods like focus groups, surveys and interviews is not recommended as it is very expensive at this stage and often lead to more confusion.
After defining the problem and prioritizing it, determine the research objectives for it as mentioned below.
Based on research objectives, qualitative research like focus groups and interviews should be done to understand what customers think about the product at this point. After that, quantitative research like survey is created to validate findings of focus group in general population.
(Note: It is advisable to avoid doing focus group and interviews alone and to maximum extent validate the findings in general population via surveys.)
Do data analytics on data collected from surveys to accomplish research objectives. E.g., clustering can be done to understand consumer preferences. Perceptual maps and factor analysis can be done to understand customers preferences and perception.
This completes the market research.
Credits:
- Backward Market Research by Alan R Anderson.
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