Product Development

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Marketing Research

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Marshall Field's, a department store in Chicago, has long used the motto: “Give the lady what she wants.” Finding out what the customer wants is one of the problems marketing research tries to solve. Marketing research has been defined as trying to analyze marketing problems scientifically. It studies people as buyers and sellers, examining their habits, attitudes, preferences, dislikes, and purchasing power. It often studies specific segments of a population, such as teenagers, high-income groups, or senior citizens. Marketing research also investigates distribution systems, pricing, promotion, product design, packaging, brand names, and almost every aspect of the seller-buyer relationship.

Marketing research is divided into a number of subareas. Advertising research attempts to find out the effectiveness of advertising. It also seeks to learn the best media for advertising specific products: television, newspapers, radio, magazines, billboards, and others. Market analysis tries to identify and measure markets for specific products and to estimate sales potential. Markets may be differentiated by population groups or by geography. Some types of clothing are more likely to sell in Florida and California than in the northern Midwest. Some cosmetics will appeal more to black customers than to white customers. Performance analysis helps a company learn how well it is meeting its goals of sales and profits. Product research covers the whole area of new-product development. Marketing research is an expensive undertaking, and its costs are built into the prices of products.

Akio Morita, the chairman of Sony Corporation in Japan, wanted a radio he could carry with him and listen to wherever he went. From that small desire was born the Sony Walkman, a radio small enough to be worn on a belt or carried in a pocket. With a headset smaller than earmuffs, the Walkman can be worn and listened to anywhere.

Not all product development is so easy. Most of today's products (including many of the basic necessities of food, clothing, and shelter) are the result of creative research and thinking by staffs of people. A new product is one that is new for the company that makes it. A hamburger is not new, but when McDonald's introduced the Big Mac, it was a new product for that company.

Decisions to make a new product may be the result of technology and scientific discovery. The discovery can be accidental or sought for. The original punch-card data-processing machine was devised for use by the Bureau of the Census. Penicillin, by contrast, was an accidental discovery and is now one of the most useful antibiotics. Products today are often the result of extensive marketing research to learn what consumers and retailers want. Ideas for products may come from consumers, salespeople, engineers, competitors, trade associations, advertising agencies, or any number of other sources.

Once a product has been approved, it must be designed, made, tested, revised, and retested. It may be subject to test marketing (sold or given away in a few places) before being put on the market generally. This whole process may take several years.

Package design and brand-name selection are two major aspects of product planning. Packaging not only contains and protects a product, but also provides a form of advertising intended to appeal to consumers by its appearance or convenience. Carbonated beverages could be sold in colorless glass jugs, but they are far more appealing and convenient in colorful six-packs of aluminum cans. Packaging also can add significantly to the cost of a product.

The packaging of many products is regulated by governments. In the United States, the federal government requires certain information to be placed on cartons, boxes, and other packaging for products used by consumers. Nutrition information, for instance, is required on most packaged foods. Most packaging today carries a universal product code stamped on it. The code can be read by electronic scanners to speed up the buying process and to automate inventory control.

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