What separates successful FMCG product launches from the rest is market research. By investing in market research, FMCG companies can not only maximise their ROI but also gain in-depth insight into their consumers, the market and their brand within the category.
How is Market Research Conducted?
To gather the required insight into the FMCG market the following research may be completed:
- Focus Groups/Consumer Panels
- Field Trials
- Secondary Research
These research methods are just the basic techniques that may be employed, a specialised market researcher will have more refined and customised options.
Data gathered can be either qualitative or quantitative depending on the objectives of the research. The key difference in this data is the insight that can be drawn from its analysis. Quantitative data will show what is happening in the market, whereas qualitative data can be analysed to reveal the whys of the market.
Who Conducts Market Research?
Market research can be sourced internal or external. However, internal research by the FMCG company themselves may not yield the same in-depth insight found by an external market research firm.
The advantage of investing in an external researcher is the unbiased perspective they bring to the project, the potential to save time and money, and the tools and resources at their disposal as a business specialising in market research.
Before choosing a market research firm, complete a thorough investigation of their resources, check their credentials through case studies and previous/current clients. Many firms will include this on their websites.
Why is Market Research Important?
There are many reasons to complete market research, from category exploration and concept development to brand improvement and new customer engagement. The key importance of market research for a new product launch is to determine the direction and strategy that will optimise returns and to discover deeper insights that will result in making informed decisions.
FMCG research not only gains insight about the consumer e.g. shopping and eating habits, taste and scent testing, demographics and target audience but also analyses the market size, growth drivers, segments, suppliers, distribution and the competitive dynamics. Especially when launching a new product, it is imperative to know the market being entered into, consider changing trends and consumer behaviour, whether there is already a market leader and the market saturation within the category.
For many FMCG companies, the decision to invest in market research may come down to whether the findings will result in ROI. In the case of launching a new product, FMCG companies should be asking why they wouldn’t complete any market research before launching. Without market research, FMCG companies could be making detrimental and costly mistakes.
Market research will provide insight that can assist in driving informed decisions to optimise the launch of new products. By investing in product testing with a reputable market research firm FMCG companies can yield much higher returns than going to market with only hunches and instinct.
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