Product research 101: How to do your research before diving into design
The process of defining and researching a product are intertwined since you can’t really define a product unless you know the context in which it exists. Once you’ve defined the product idea, product research — which naturally includes user and market research — provides the other half of the foundation for great design.
The user’s mind is a complex and competitive space. To complicate things further, you need to understand customers as a collective (i.e. market research) and on an individual level (i.e. user research).
Market research may start by looking at demographics while user research finds information that challenges and qualifies the segmentation. Both types of research have a role in innovation and both can find gaps that drive new product ideas.
Why research matters
Simply put, if you don’t know who you’re building the product for, then you don’t know why you should be building it. And if you don’t know why, then it doesn’t really matter how you build it — you’re already on the fast track to disaster.
Louis Rosenfeld, founder of Rosenfeld Media, distills the importance of product research can into a simple fable of the blind men and the elephant. As the tale goes, some blind men walk into a bar and encounter an elephant — one feels a trunk and calls it a snake, another feels a leg and claims it’s a tree. Nobody sees the whole picture.
Just like those blind men, unless you have a holistic research strategy, you’ll never see how all the pieces should fit together to inform your product.
If you don’t yet have a product on the market, research tactics like market segmentation and competitive profiling helps you determine the necessary scale and timing of your investments. Specifically, market research helps to distinguish between addressable and distinguishable markets:
- Total addressable market (TAM) — The total revenue opportunity for your product. Think of this as your product’s planet.
- Serviceable available market (SAM) — The portion of the addressable market in which you can realistically compete. Think of this as your product neighborhood.
Knowing your available market is already half the battle since, at that point, you’ll have a clearer picture of how to segment customers as well as other “neighborhood” competitors.
On the other hand, user research is better at providing direction on designing solutions because it looks at how a person uses a product — not data on what they might buy.
For instance, market research identifies that a market exists in Europe for smartphones. But what’s profitable and what’s desirable may be two very different things. User research can then validate that assumption by documenting how 10 people use smartphones versus how they use your smartphone.
Market segmentation report
A market segmentation report is a document examining potential customers based on their specific and shared needs and characteristics. Generally speaking, they’re segmented by geography, demographic, behaviors, psychology, benefits or some combination of the above.
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