You’ve probably heard of companies pouring vast resources into the product development process only to watch their new offerings flop. Why? Because even with the best intentions, they might miss the mark on understanding their target market. With a well-structured product research process, you can avoid these pitfalls and set your product up for long-term success.
What is product-market fit?
Product-market fit is when your product satisfies a significant demand within a specific target market. Achieving product-market fit means that your product effectively solves a real problem for a clearly defined group of customers, leading to strong demand, customer retention, and word-of-mouth growth.
It's often described as the moment when your product "clicks" with the market. Customers find it valuable, use it repeatedly, and are willing to pay for it. Without product-market fit, even the best-executed product launch can fail, as there is no guarantee that the product meets an actual need or resonates with potential customers.
Here are seven product research steps to help you connect with potential customers and achieve a strong product-market fit.
7 steps for effective product research
1. Understanding market and customer needs
The first step in your product research process is to get crystal clear on your market and customer needs. This foundation will guide every decision you make during the product development process.
Market research involves sizing up your potential market, segmenting it, and understanding your target customers. It’s essential to go beyond basic demographics. You must dig into your potential customers' behaviors, needs, and pain points. This will give you a deeper understanding of what they truly value.
Qualitative insights alone aren’t enough. You’ll also need quantitative data to back up your findings. This is where Simon-Kucher’s expertise comes in. Our tailored research methodologies help you gather and analyze the right data—whether through robust customer surveys, precise A/B testing, or advanced price sensitivity analysis.
We provide actionable insights that move beyond surface-level data, helping you quantify customer preferences and behaviors. By combining Quantitative and qualitative research, we empower you to make informed, strategic decisions throughout the product development process.
Case study: Market opportunity assessment and engagement strategy
A leading vaccine company needed to assess the market opportunity and policy developments for maternal immunization across different countries. Our team conducted a comprehensive assessment of the value drivers and barriers that influence vaccine recommendations. For each country, we developed a stakeholder map for vaccine recommendation decisions and identified critical triggers for positive and negative immunization recommendation outcomes. Read the full case study.
2. Product concept testing
With a solid understanding of your market and customer needs, it’s time to start developing product concepts. But how do you know which ideas will resonate with your target market? This is where concept testing comes in.
Concept testing allows you to validate your ideas with potential customers before investing heavily in development. You can present different versions of your product—whether it’s through prototypes, digital mockups, or even detailed descriptions. Gather feedback on what works and what doesn’t.
This is a crucial step in the product research process. It helps you prioritize the features that matter most to your customers. Methods like conjoint analysis allow you to understand which specific features are driving customer decisions. This helps you create a product that is not only desirable but also differentiated from your competition.
The aim is to unearth the friction points and areas where customers might hesitate. Addressing these early on ensures you’re moving forward with confidence. This way, you will be ready to develop a product that fits the market.
Case study: Paving the way for CO2-reduced raw materials
A leading raw material producer developed an innovation that saves up to 70% of CO2 emissions in production. Despite their position in a long value chain, they faced the challenge of how to effectively commercialize this innovation. As the client operated in a highly competitive and commoditized market, we strategically identified target customers. We created a pull by partnering with brand owners at the end of the value chain and devised flexible revenue models and pricing strategies to suit varying levels of vertical integration. Read the full case study.
3. Pricing strategy: Find the perfect price point
Pricing strategy can make or break your product’s success. Even if you’ve built an outstanding product, setting the wrong price point can alienate your target market or leave money on the table. Getting your pricing right requires researching customer willingness to pay and price sensitivity.
Understanding how much your customers are willing to pay involves more than guessing based on competitors' pricing. It’s about assessing the perceived value of your product in the eyes of your potential customers. Research is the process of identifying the intersection where customer value and profitability meet.
Case study: Multi-method approach to evaluate different launch price options
At Simon-Kucher, we are renowned for our expertise in pricing strategy, particularly in uncovering the price point that will maximize your product’s profitability while still appealing to your target market. For example, we recently worked with a client on a successful product launch. This included assessing revenue potential and strategic fit and mitigating risks such as cannibalization of existing products.
Through thorough research, we helped our client develop a clear positioning, pricing, and communication strategy that aligned with the target market and drove growth. Read the full case study.
4. Product positioning and go-to-market strategy
Product positioning and go-to-market strategy are the next steps in the product research process. Here, you determine how to make your product stand out from similar products and ensure your messaging resonates with your target market.
Competitive benchmarking is key. You need to analyze what competitors are offering, how they’re positioning their products, and their strengths and weaknesses. This will help you identify opportunities for differentiation and highlight your product’s unique value proposition.
Research tools like competitive analysis frameworks and customer journey mapping can help you understand where your product fits in the market and how to position it effectively. Whether targeting a niche market or competing head-on with established players, your go-to-market strategy should be based on solid research.
Case study: Optimizing a go-to-market strategy for a digital mental healthcare provider
We partnered with a digital mental healthcare startup to optimize its go-to-market and monetization strategy. The company, which offered both prescription and non-prescription digital therapeutics, had begun experimenting with different market approaches. Seeking external expertise to refine their strategy, they reached out to Simon-Kucher for support.
Our approach involved three key steps:
- Validating the existing go-to-market strategy using Simon-Kucher’s proprietary framework and industry expertise.
- Assessing market access and monetization potential through discussions with external experts and leveraging the client’s internal experiences.
- Defining a tailored strategy that considered the specific products and the target markets in the US, UK, and Germany.
The outcome was an optimized strategy with actionable recommendations on pricing, access pathways, and additional success factors, enhancing the client's opportunities in key markets. Read the full case study.
5. Innovating and developing products that resonate
Innovation doesn’t happen in a vacuum. It’s driven by an in-depth understanding of your market and customers’ evolving needs. The product development process is a cycle of continuous learning and iteration, with research at every step.
Incorporating research into your new product development (NPD) processes ensures you build innovative products that reflect customer expectations. Whether working on an entirely new product or iterating on an existing one, you’ll want to conduct product research throughout the development process. This ensures you stay on track.
Consider customer co-creation as a strategy. Inviting customers to participate in the development process can lead to unexpected insights and stronger engagement. When you involve your target market early on, you can test ideas in real time, iterate based on feedback, and build a product that customers feel connected to.
Product portfolio management is another critical aspect of this phase. Over time, it’s essential to reassess your product lineup and decide which products to continue developing, which to expand, and which to phase out.
Case study: Resetting the portfolio towards sustainable growth
We supported Hydro Extrusion Europe in repositioning its product portfolio to align with market sustainability trends. By conducting extensive research and analyzing case studies of green products, we helped Hydro Extrusion identify opportunities for growth. Our research also showed that while price remained important, customers were willing to pay a premium for more sustainable products. Read the full case study.
6. Customer journey and experience optimization
Building a successful product isn’t just about the product itself but the entire customer journey. Understanding the full experience your customers have with your product, from discovery to purchase to ongoing use, is crucial.
Customer journey mapping is a powerful tool for visualizing how customers interact with your product and identifying potential friction points. Researching every stage of this journey allows you to optimize touchpoints, improve customer satisfaction, and build stronger brand loyalty.
For example, gathering feedback through surveys, focus groups, and social media monitoring after a product launch will help you identify where the product might fall short. Maybe the onboarding process is too complex, or there are features that customers aren’t fully utilizing. Research helps you pinpoint these issues and make the necessary adjustments to improve the overall experience.
Case study: Personalized voucher recommendations for a bank’s customers
Our client aimed to increase the relevance and conversion rates of voucher offerings in their app. The bank’s product recommendations followed simple rules with relatively low conversion rates. Management wanted to improve the opportunities of their loyalty program. This meant completely redesigning their app voucher structure through a personalized voucher system. Read the full case study to find out how we improved the bank’s user experience.
7. Post-launch performance tracking
Once your product is in the market, your research efforts shouldn’t stop. Post-launch performance tracking is essential for ensuring your product meets customer expectations and remains competitive.
This phase involves gathering data on key performance metrics, such as market penetration, customer satisfaction, and profitability. Are customers using the product as intended? Are they happy with their purchase? What feedback are you receiving from your target market?
Continuous feedback loops are crucial here. By regularly gathering customer feedback and tracking performance metrics, you can identify opportunities for improvement and make informed decisions about future product iterations or marketing strategies. This ongoing research ensures that your product stays relevant and resonates with customers over the long term.
Case study: Delivering innovation, happy customers, and an increase in revenue
A telecommunications market leader in Eastern Europe wanted to move beyond its current market portfolio. Their main competitor had introduced an improved network at 20% lower prices. Our client needed to attract new customers, increase package options, and introduce an incentive program to retain legacy customers. Find out how we helped our client increase revenue by 15%. Read the full case study.
How Simon-Kucher can help
At Simon-Kucher, we understand that developing successful products is an ongoing journey. Whether launching a new product, optimizing an existing one, or refining your pricing strategy, our expertise in product research, pricing, and market strategy can help you achieve your goals.
Our approach is based on a deep understanding of customer behavior, market dynamics, and competitive positioning. We work with you every step of the way, from initial market research to post-launch performance tracking, ensuring your products are designed to meet customer needs and positioned for success.
Our product research tools
We leverage a wide array of product research tools to deliver actionable insights that guide your product development journey. This includes advanced quantitative tools like customer surveys, A/B testing, and conjoint analysis to measure preferences, price sensitivity, and willingness to pay.
We combine these with qualitative methods such as focus groups and in-depth interviews to explore customer behaviors more deeply. By blending these tools, we help you validate product concepts, optimize your portfolio, and ensure your product meets the needs of your target market.
Let’s work together to turn your product ideas into reality. With our proven research methodologies and strategic insights, we’ll help you build products that resonate with your customers, achieve the right price point, and secure a strong product market fit.
Ready to unlock your product’s full potential? Let’s start the conversation today.
