Entering New Markets: How Market Research Can Inform Product Development

This paper discusses the methodology for conducting market research to launch a new product by urban micro-lenders entering rural areas. It focuses on technical considerations regarding various market research options and elucidates on each option with the help of a case study.

The paper clarifies on each of the following research options and their place and role in product development:

• Feasibility study to be conducted to get a general sense of the potential demand for financial services in rural areas;
• Exploration of rural market needs and preferences for an in-depth understanding to develop a detailed product concept;
• Soliciting potential clientele feedback to correct some product parameters before launching the pilot test. The feedback collects information on the following parameters:
  • First reaction to product idea;
  • Reaction to product name/slogan;
  • Detailed feedback on product attributes;
  • General intent to purchase the product.
• Market size estimation for the new product for financial projections and a more detailed market segmentation to feed the new product strategy;
• Monitoring clients and evaluating pilot test results to further refine the product by emphasizing the key benefits and limiting the product weaknesses for clients.

The author:

• Furnishes information about the cost of market research so that the urban micro lenders can invest in specific market intelligence activities as per their needs;
• Recommends not skipping the research entirely as it usually costs more to fix badly designed parameters in the future.