Question

why it is important to do marjet research before launching the new product?

Answer 1

Launching a new product is no easy task. Before launching it we have to do proper market research. Market research is necessary so as to find in advance that product launching is successful or not. But it doesn't mean that aftermarket research company will capture market share successfully for this product.

Following are some reason because of which market research plays a significant role:-

1. To analyze the demand:- Market research help to judge that there is enough demand in the market for that particular product. Because if a product is launched without analyzing the demand then chances are there for product failure.

2. To check competition status:- If you enter in a market that has very high-level competition then your profit will be shared by the competitor. On the other hand, if you enter a market where competition is very low or not at all then you can derive profit at least in the initial stages.

3. To Make pricing strategy:- Pricing strategy is very important to earn revenue from the market not only in the short-run but also in the long run. Aftermarket research you will analyze that if there is no competition then you can be monopolist and charge price accordingly. You can adopt here skimming strategy.

4. To analyze the future cost & CVP analysis:- Market research also helps to knew in advance the burden which the company will face in the future. Also, We will know what we earn from product launching. In this way, we can estimate that launching the product is profitable or not by making CVP analysis.

5. Who are your target customer:- From market research, you will know that to whom you should focus to sell your product. What is age group of your audience and accordingly you can advertise your product. For example:- For children between the age of 18 to 25 internet is good advertisement source.