The PDMA Handbook of New Product Development

13.4. Basic Approaches to Market Analysis for New Product Development

Many techniques exist for analyzing market characteristics and customer requirements. They fall into two broad classes: qualitative methods and quantitative methods. The qualitative techniques typically draw insights from an in-depth understanding of a small set of customers (see Chapters 14 and 15). Here, the goal is to identify customer priorities in an open environment. The researcher uses qualitative techniques to build new hypotheses and gain understanding in new areas. Quantitative methods are more often used to test hypotheses and forecast the "size" of the demand for different products under different conditions (see Chapters 18 and 23). Here, a more generalized level of customer understanding is gained by posing a structured set of questions to a larger number of respondents. Insights on particular value propositions can be drawn, and differences among segments of customers can be identified.

13.4.1. Qualitative Techniques (see Chapters 14 and 15)

Often, the starting point is a qualitative analysis of the market dynamics. These approaches are applied when the goal is to gain an understanding of the basic market and customer needs, leading trends and issues, and the emerging priorities that might be addressed by an innovative value proposition. The range of qualitative techniques can be clustered into three research categories. These span a spectrum of market focus, analytical rigor, and investment ...