B2B International
B2B International

August 17, 2011

Mark Hedley this week considers the subject of how to approach product development research

I read a recent interview with Nielsen’s American chief of product development Vicki Gardner, in which she talks about Nielsen’s approach to product development research. The interview reveals that Nielsen has recently announced its new strategy for product development research, which breaks down the factors that influence a product’s success into twelve points. These twelve points cover issues such as how distinct the proposition is, how persuasively the message is conveyed, how well the product performs and the cost-benefit trade-off for the buyer.

Nielsen believes that, with its new approach, it can dramatically reduce the likelihood of a flop, with a success rate of about three in four. That’s compared to less than one in four for all new products, and just under half for products tested using the old approach. Explaining the reasons for this new approach to product development research in July’s issue of research-live.com, Vicki Gardner said:

“One of our key questions that we ask is, how many alternatives do you have in market for this [product]? Because what Nielsen wants, what the manufacturer wants, what the retailer wants and what the consumer wants, is innovation that is truly new and fulfilling a need for the consumer. So I think this actually will help point to where true innovation lies”

Although Nielsen’s approach has largely been developed for consumer product development, its basic principles are also applicable to many business-to-business markets, where obtaining accurate and usable data for new product development initiatives presents a challenge. Although buyers in b2b markets often possess technical knowledge that allows them to visualize new product concepts, it is also necessary to present potential buyers with distinct new product concepts to test the attractiveness of a new product. It is then possible to assess reactions to the product concept in terms of its perceived benefits, cost-benefit trade-off, the ability of the product to meet a need, its benefits over alternative products, and so on. The more nuanced the dissection of these factors, the more likely that a company will succeed in developing or adapting new products to meet the real needs and unmet needs of the market place.

However, it worth noting that product development research in b2b markets should not just focus on the product itself, which is often just a small aspect of the requirements of buyers. For example, in manufacturing industries, the availability and speedy delivery of a key ingredients can often be as, if not more, important than minor product innovations that may not significantly alter the product’s performance (especially where a large number of substitute products exist). As such, the best product development research will not be carried out in isolation, but will also take account of other issues surrounding the product, such as packaging, services (i.e. technical support), delivery and marketing. The benefits accrued through the significant investment that may be required for new R&D activity can then be appropriately measured against investments in alternative areas of the business.