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Imagine launching a product into the market without doing your homework: without knowing what your customers think, without understanding what they truly value about your brand, or without being clear on whether they would be willing to pay more for an improved version. Sounds risky, doesn’t it? Well, it is. Launching a product without solid market research is like jumping into the void without a safety net. And no, it’s not a risk worth taking.
In such a competitive environment, companies cannot afford to base their decisions on assumptions. Good market research gives you the answers you need to make informed decisions and minimize risks. In this article, we analyze two real-life examples that show why conducting market research before launching or relaunching a product makes all the difference.
Are we willing to take the risks of not conducting market research?
Without prior research, you may face several problems:
- Customer confusion: Do your customers really understand what you’re offering? If you don’t conduct a study beforehand, you might assume that your proposition is clear, when in reality, you could be creating confusion.
- Loss of loyalty: When consumers don’t understand the added value of a new product, they might choose the competition instead of staying loyal to your brand.
- Financial failure: Changing a product or its packaging without knowing if consumers will value it could lead to unnecessary costs that not only impact your margins but also damage your brand’s image.
For example, imagine launching a premium version of an existing product. From your perspective, it’s a clear improvement: better quality, enhanced packaging, greater exclusivity. But if you don’t conduct market research, you might find out too late that your consumers don’t understand why they should pay more for something that, in their eyes, doesn’t provide clear additional value. They might think: “Is this new product an improvement or just a more expensive version of the same thing? Should I keep buying the old one or switch to a competitor?” That confusion is dangerous because when customers don’t understand, their loyalty wavers, and they begin looking for alternatives.
Case 1: The relaunch of a perfume
This is exactly what happened to one of our clients. A multinational fashion and perfume company decided to leverage the success of one of their best-selling fragrances by launching a premium version. The challenge was to keep the original fragrance on the market without the new premium version confusing or alienating their customers.
The brand conducted an initial study to understand how consumers would respond to the new premium version. What they discovered was that only 15% of consumers were willing to buy it, while the rest were unsure whether to continue buying the original fragrance or look for options from competitors. The study revealed that keeping both products on the market would create confusion and potentially result in a loss of sales.
Armed with this data, the company scrapped the idea of keeping both fragrances on the market and conducted a second study to evaluate consumers’ willingness to pay 25% more for the new fragrance, but this time replacing the original.
The results were clear: two-thirds of respondents were willing to pay the price increase if the new fragrance replaced the old one, retaining its identity but communicating an evolution in formula, design, and packaging.
It is important to note that the company did not limit itself to a single market study but carried out several studies quickly and efficiently, adjusting its decisions as new consumer feedback was obtained. This ability to adapt and validate within hours or a few days was key to refining their strategy before the final launch.
The brand relaunched the perfume under its original name, presenting the new version as an improved evolution, not as a distinct premium offering. Thanks to prior research on packaging and optimal advertising campaigns, the relaunch was a resounding success, even with a 25% price increase. Sales increased by 15% compared to the previous year. What more can we say?
Case 2: Reformulating a sauce
One of our clients in the food industry markets a well-known brand of sauces. Their R&D department discovered an organic raw material that could improve the formula of their best-selling sauce and reduce its calorie content, which the company intuitively thought could align with new healthy eating trends among consumers. However, the new raw material came with an additional cost of 2 million euros per year. The board proposed communicating this change through the packaging, without knowing whether it would be profitable or appealing to consumers.
The marketing department, not convinced by this strategy, suggested conducting a market study before incurring unnecessary expenses. The study revealed that none of the proposed messages about the new formula (healthier, improved formula, etc.) had a positive impact on consumers. They were not interested in the change in formula or how it was communicated. They liked the sauce just as it was.
Thanks to this information, the brand avoided an expensive reprint of 47 packaging references and the associated cost of destroying old packaging. In total, they saved over 500,000 euros in reprints and an additional 100,000 euros in destroying obsolete stock.
Instead of changing the packaging, the brand conducted another study to understand what changes consumers really value. The study showed that price was the most important factor. Seventy-five percent of consumers would buy the sauce more frequently (once a week instead of twice a month) if its price dropped from 2.49€ to less than 2€.
The company adjusted its strategy based on the study results, focusing on price rather than formula or packaging, and successfully increased sales without incurring unnecessary costs.
These two examples make it clear that conducting a market study before launching or relaunching a product is not optional; it is essential. A good study not only helps you avoid costly mistakes but also provides the keys to ensuring your product is well-received by consumers. So, before launching a product into the market, would you prefer to go in blind or let the data guide you?