Market Research and Client-Responsive Product Development

This paper argues that microfinance institutions (MFIs) need to develop a market-led, client responsive approach to microfinance. The author advocates that MFIs need to identify and meet customers' needs by adopting a "market-driven" approach instead of a "product-driven" approach. This would help MFIs in:

• Retaining clients;
• Reducing client "drop-outs."

For achieving the above, the paper suggests that MFIs should use market research to understand the operating environment and to identify the needs of their clients and potential clients. This can be done by:

• Improving current marketing/promotion/outreach activities;
• Refining existing products;
• Developing new products;
• Re-engineering delivery systems.

Further, the paper presents the process of market research and product development. The several steps involved in the process are:

• Define the research issue by analysis of secondary data;
• Develop a qualitative market research plan consisting of a variety of qualitative research techniques;
• Develop a product concept;
• Subject the product concept to appropriate costing and pricing analysis to prepare it for the creation of a prototype;
• Test the product prototype through quantitative research to check its marketability;
• Conduct pilot testing of the product prototype.

Finally, the paper provides a list of microfinance-specific resources for market research and product development.