How to Determine What Products Are Relevant to the Current Market — And What You Should Stop Selling
If you have an excellent idea for a product, you might feel tempted to launch it immediately. However, you need to conduct thorough product research to avoid costly and time-consuming mistakes. With product research, you can avoid the risk of failure and seek new opportunities.
1. Evaluate Current Market Size
Companies that perform regular product research can help them stay ahead of the competition. It’s also excellent for developing innovative products and identifying trends that establish sustainable growth.
To perform product research, you must first use accurate data to discover trends and evaluate the current market size. Determining an exact market size is understandably tricky. However, you can get an estimate by starting with Google Trends.
Google Trends doesn’t precisely define market size, but it helps with the market demand trajectory. It provides you with a greater sense of how many people are searching for specific keywords. Obviously, you’ll end up with masses of data to trawl through, but you can use a tool that allows browser automation with proxy pool to help collate data and pool it into manageable data sets, which should help you to analyze what you’re looking at.
2. Analyze Your Competition
After you have a good idea of the potential market size, you should look at your competition. Use Google search or a site like Van Westendorp to help you uncover current market players. If you determine you’re first in the market, you’ll want to invest more time in market research to learn about your product’s interest.
Market research can be completed either in-house or with the help of an external expert. For example, if you are developing a product for the healthcare market, it can be worth partnering with a company like IDR. You can Read about medical market research on our blog to understand its importance in both shaping your new products and driving their commercial success.
3. Identify Your Target Market
At this stage, you don’t have to define your exact customer persona in too much detail. However, you should be aware of the type of customer you are targeting.
To find out about your current customer base, look for common characteristics and interests. Which products bring you the most business? You can also dig deeper by examining your Google Analytics account. A Google Analytics report will include:
- Audience demographics are key to understanding age ranges, genders, and what products appeal to each demographic.
- Location. This report can give you greater insight into what people are doing in a particular area. For instance, people who live in Florida need an A/C unit due to the hotter temperatures. In contrast, people are less likely to need this product in Maine.
- Top pages. This information will give you access to how many people are looking at your products.
4. Understand What Your Customers Value
Customers love products they can use to solve more than one problem. Additionally, finding new uses for a product makes it even better. To understand more about what customers value, get to know your customers and how they use the product. Distinguish what elements of your product will benefit the customer.
By understanding customer value, you establish fair pricing and reduce problems within the consumer experience.
5. Determine What to Stop Selling
To help you decide which products to stop selling, you should watch for three signs. The first signal is slow growth. If a product line cannot establish growth beyond 20%, this indicates that the product is costing you money.
The second thing to look for is your revenue-to-cost ratio. One obvious indicator is a balance below 1. This indicates you’re spending more to maintain the product than you are earning in revenue.
Lastly, you should continue to evaluate the product’s true potential. Test the product out with potential buyers before making the decision to invest. This method will allow you to understand whether you’ll make a profit or not.
Next Steps
Product research will help you set the foundation for your marketing strategies. Start testing your ideas and continue to make room for improvement. This strategy will help you move forward in making more informed decisions and avoiding costly oversights.
