How to conduct a product feasibility study in 5 Steps
Typically, in the early stages of conception and development of a new product, doubts may arise that only a feasibility study can dispel. For the success of the project, it is always necessary to ask yourself some questions, such as:
- Who would buy my product?
- Who should my target audience be?
- What are my competitors?
- How much should I sell the product for?
- How should I promote it?
- What technical, economic and legal constraints do I have?
- What are my timelines?
All these questions can only be answered by a detailed feasibility study. In this article we want to help you understand how the feasibility study of a cosmetic packaging is carried out, providing some valuable advice.
But before understanding how to conduct a feasibility study, let’s explain in detail what is meant by this term.
What is a feasibility study?
A feasibility study is the evaluation of the actual feasibility of a project. This is a particular type of market research whose purpose is to provide predictive analysis to direct the next steps of product development, implementation, marketing and sales.
Feasibility studies, among other aspects, aim to obtain information through both primary and secondary research. The primary research is carried out specifically for the project and includes online surveys and interviews with potential stakeholders; the secondary research, on the other hand, consists of data, information and research which already exists and available for the purpose of the study, as demographic analyses and documentary research.
Types of feasibility studies
When it comes to feasibility studies, at least 5 important factors are analyzed, which give rise to subgroups of studies.
Specifically, consideration is given to:
- Technical feasibility, to determine if the product is reasonably feasible from a technical point of view, and if the company has the technical resources and skills to meet the project requirements.
- Economic feasibility, macroscopically evaluating the cost-benefits of the product, and then evaluating whether they comply with the pre-established budget constraints.
- Legal feasibility, to analyze if the project meets the legal requirements.
- Functional feasibility, to analyze whether the project is in line with the company’s business resources and strategic objectives
- Time feasibility, to estimate the time needed to execute the project and compare this data with the customer’s constraints.
In summary, a feasibility study aims at demonstrating that your product is producible, while meeting the expected technical, functional, budgetary, scheduling and legal requirements.
Why is it important to conduct a feasibility study?
The feasibility study is the basis on which the success of the project is based. You should conduct a feasibility study to determine the factors that will make the business opportunity a success and to ensure the highest return on investment.
In most cases, the feasibility study provides a clear picture of the strengths at the product, budget, planning and logistics levels and allows you to tailor the project to your own capabilities and external constraints.
These studies also provide other benefits, including:
- Bringing to light new opportunities that were not initially considered,
- Getting more information to improve business decision making,
- Outlining the actual needs of the project.
Usually, a feasibility study is carried out to maximize the project’s success rate.
Tip for you: having an external company conduct the feasibility study is essential because it reduces any biases during the design of the research, the analysis of the results and the drafting of recommendations.
How to conduct a feasibility study in 5 steps
There are 5 basic steps to take into consideration when you decide to conduct a feasibility study:
1. Preliminary analysis
The main purpose of the preliminary analysis is to examine project ideas before time, effort and money are invested. In particular, it is necessary to:
- Outline planned services, target markets and unique product characteristics as specifically as possible,
- Determine whether there are insurmountable obstacles to the success of the project.
2. Market research
This step is crucial to the success of your feasibility study, so do in-depth market research. This will give you a clearer picture of the revenue and return on investment that you can realistically expect from the project. Some aspects to consider are geographic influence on the market, demographics, competitor analysis, market value, what your share will be and whether the market is already open and receptive to the product.
3. Business operations planning
At this point, business operations should be planned to determine technical feasibility and related costs. Pro tip: it’s always better to overestimate the financial costs of your project, as the projects usually cost more than initially estimated.
4. Review all data
The review is especially important to make sure everything is as it should be and nothing requires changes.
Review the previous steps and make sure everything is realistic. This is also the time to think about the risk and develop any contingency or corrective plans.
5. Make “Go / No Go” decision
Now you are at the point of deciding whether the project is feasible or not: all the previous steps lead to this decision-making moment. Another factor to consider before making this choice is the correlation between commitment and time, effort and money, and whether everything is aligned with the company’s objectives.
Minelli System as a contract manufacturer conducts accurate feasibility studies for each project that is brought to its attention. On average, our team carries out 250 feasibility studies annually, carefully following all the processes listed above. But this is only the first step that leads to the actual production of the product. The feasibility study is followed by design for manufacturing, prototyping and finally the actual production, relying on the best players on the market.
If you have a project in mind and would like a realiable company