Blog

12/05/09

Volumetric Modeling - Impact on Innovation

Innovation is necessary in keeping up with current trends, developing new products, and staying ahead of the game. Innovation is not possible without first knowing what your market is and is not, and where it is and is not. Volumetric Modeling is being used to aid innovation by simulating real world consumer purchasing behavior. Volumetric research is usually carried out via surveys of customers and potential customers with the goal of finding out just how much , and how often they use a product or product genre, and how much they are willing to pay for it. Keeping up with current trends, volumetric research can easily and cost effectively be conducted through use of the Internet.

The goal with volumetric research is to identify the marketing variables in these realistic scenarios, and be able to identify which variable may be hindering the product. Using the research data, a company can determine whether their new innovative product is up to market standards. If it is not, volumetric research eases the process of innovation by taking the guesswork out what is hindering your product/service from potentially doing well in the market, even before market entry. Thus, this process saves costs down the road by making corrective action in development stages, as compared to after product placement.

The term "volumetrics" encompasses many different facets of empirical market research that leads to market innovation. Four major types of volumetric studies commonly used-market size research, market segmentation, trade-off matrices, and pricing research-all are key to divining market needs, the basis for innovation. In the area of market research, this quantitative approach to research conveys the market and market potential in digestible numbers and figures. A brief overview here will show the importance of each as a part of the whole concept of volumetric studies and their role in spurring market advancement.

Market sizing studies quantify potential and current markets by directly surveying the customer and potential customers. Once a market is identified, further segmentation research is needed to properly connect with the appropriate clientèle. Whether the segmentation is geographic, demographic, behavioral, technological, or psychographical, the need to join the right client with the right product is paramount. The old adage "round holes, square pegs" is a simple yet applicable metaphor for market segmentation. Quantifying trade-offs and whether a particular venture generates an acceptable return on investment is, much like the other volumetric methodologies; a common sense approach. This method of research answers the very important question "when it's all said and done, is this undertaking worth it?"

Finally, if the data from the three previous research studies illustrates a potential market need that you are willing to enter; proper pricing for the product/service is yet another volumetric process available to assist with implementation of a novel concept into a market. By directly asking current and potential customers what the acceptable pricing level is for the product, you avoid the trial and error of pricing corrections. Volumetric studies are not luxury add-ons to market research, but a foundation to discover new markets. Hard numbers, figures, and statistics are not only tangible but are hard evidence when deciding any course of action. Where there's smoke, there's fire. And where there are new markets, there's innovation. Successful life science companies use volumetric studies, do you?