Why is Market Research and Competitive Analysis Important for Product Engineering?

Summary

Market research and competitive analysis are two important aspects of product engineering. Both concepts help you engineer the right product in the right manner. In today’s dynamic business environment, if you want to build the most relevant and desired product, understanding the market scenario and competitive landscape is essential.

And the study of market research and competitive analysis will help you make informed decisions, anticipate customer needs, and build successful products as per demand. When you avail of Product Engineering Services, you will hire engineers who are well-versed in these concepts.

In this blog post, we will talk more about the role of market research and competitive analysis in product engineering.

What is Market Research?

Did you know the market research industry grew more than twofold from 2008 and surpassed the $81 Billion mark in revenue in 2022?

Market research helps identify the right product to be built for your customers. It also helps verify the idea for which you are trying to build your product.

Before building the product, one needs to focus on the market demand. What are the features that the audience wants you to develop?

You can identify this by going through the product reviews and learning what are the pain points of your customers that often go unnoticed. Knowingly or unknowingly, your customer is always giving hints about what they want and how they want the product to be built.

Thus, it is important to know what are those before your competitor enters the market and solves those problems.

With the help of market research, the below-mentioned questions will be answered. It will help build the right product for the consumers.

• What is the market demand for the product? How many consumers are actively using the product or would be interested in using the product?
• What are the Gross Margin and Profit margin for such products?
• Consumers from which location will be more attracted to use such products?
• How many Big players (competitors) are in the market for similar types of products?
• How much is the consumer ready to pay for such products?

To answer the above questions, you need some market research tools. Using such tools will provide you with a more accurate interpretation of the market. It should also help future decisions on the product and services.

Using these tools doesn’t only give answers to the above questions but also helps the marketing team to identify key data for future releases of the product.

Types of Market Research Tools

Mentioned Below are different types of market research tools that are commonly used by businesses.

• Marketing websites: These types of websites are performing market research that provides information on statistics along with the demography of the product/services target market.
• Social Media Monitoring: The marketing team uses such tools to get the behavior and information of the target market audience. Businesses use this information for making strategic decisions about the company’s marketing campaign to improve sales revenue.
• Data Analysis Tools: These types of tools are used to collect data from various sources. And some of the programs can be integrated which helps to obtain insights into the collected data.
• CRM Software: These types of tools store customer data based on previous interactions with your organization. This will provide efficient marketing techniques for future and current clients.
• Neuromarketing Tools: It helps us understand where the information should be placed on a website so every customer concentrates on the important information like headings and marketing content on the website. And not on the unimportant information like images, banners, etc.
• Competitive Intelligence Tools: These tools help the business track the competitor’s sales cycle, target customers, key value proposition, and sales performance on a monthly/ quarterly/ yearly basis.

What is Competitive Analysis?

Competitive analysis helps gain a comprehensive understanding of your competitor’s strategies, products, and market standing. By weighing your competitors’ strengths and weaknesses, you will be able to understand the current competitive landscape and build highly profitable products.

With the help of competitive analysis, the below questions will be answered. It will help build a unique product and also identify the competition.

• What is the Market Share of your competitor?
• What are the Strengths and Weaknesses of the competition?
• What is the Key Value proposition which can help enter the market?
• What is the difference in the target customers between you and your competitors?
• How many Secondary competitors are there with respect to your competitors?

Once the above questions are answered, you can say that competitive analysis is done to build a unique and market-fit product; reasons why it is an important part of software product engineering.

Want to learn in-depth about various determinants of software product engineering? Check out this Product Engineering Guide and learn how to build the right product.

Conclusion

Product engineering helps you design, develop, and launch the perfect products that are in demand and desired by your customers. However, the process can be tedious if you are not familiar with the concepts of market research and competitive analysis.

The study of these two concepts will give you a better understanding of the target market, audience, needs, competitors, etc. The combination of both helps you build the right unique product for the right customers.

Do you have a product in mind too and want to check how viable it is in today’s competitive market? Our product engineering services can help you in this context. Biztechcs holds 16+ years of experience in software product engineering and will help you create profitable and successful products for your target audience.