Market Research Tip: How to Test Product-Market Fit Before Expanding to a New Market

Expanding into a new market is an exciting milestone for any business, but success hinges on a critical factor: product-market fit (PMF). You achieve PMF when your product aligns with the needs of your potential market. Testing PMF in a new market helps you avoid costly mistakes and ensures your offering resonates with the target audience. According to CB Insights, 35% of startups fail because of a lack of PMF. Furthermore, according to the late Dr Clayton Christensen, 95% of new products are destined to fail without PMF. This shows how important PMF is especially when expanding into new territory.

Here's how to test product-market fit effectively before expansion.

1. Define Your Target Market

Begin by identifying the new market you want to enter. Use demographic, geographic, psychographic, and behavioural criteria to create a clear customer profile. Understanding the nuances of this new audience will help you tailor your product and marketing strategies.

Example: If you’re expanding a fitness app to a new country, research how people in that region engage with fitness technology and their preferences in features like tracking or coaching.

2. Conduct Market Research

Engage in qualitative and quantitative research to uncover customer needs, preferences, and pain points. This can involve surveys, focus groups, or analyzing competitors in the new market. You can use a combination of primary and secondary research depending on your budget:

• Primary Research: Conduct surveys, interviews, and focus groups with your target audience. For instance, if you’re introducing a new beauty product, ask potential customers about their skincare routines, preferences, and pain points.

• Secondary Research: Analyze reports, studies, and data about the market. Look at competitors and their successes or failures to spot trends and gaps.

Key Questions to Answer:

• Does your product solve a clear problem in this market?

• Are there similar offerings, and how are they performing?

• Are there cultural or regulatory barriers you need to navigate?

3. Launch a Minimum Viable Product (MVP)

An MVP allows you to introduce a simplified version of your product to test key features. An MVP is beneficial because it allows you to monitor customer responses to determine whether there’s significant demand for your product.

4. Pilot with a Small Audience

Instead of launching to the entire market, start with a test group. This can involve partnering with local businesses, running a limited campaign, or engaging a niche community.

For example: If you’re introducing a new beverage, focus on a specific city or group to test demand and refine your distribution strategy.

5. Measure and Analyze Feedback

Collect data on how the target audience interacts with your product. Customer interviews, Net Promoter Scores (NPS), and social media sentiment analysis are effective tools to assess satisfaction and potential.

6. Iterate Based on Insights

Use the feedback to refine your product or strategy. Sometimes, the market may need slight adjustments in pricing, features, or delivery channels to match its needs.

Be flexible: If potential customers suggest additional features or highlight usability challenges, address them before scaling further.

7. Test Revenue Potential

Product-market fit isn’t just about usage—it’s also about willingness to pay. Experiment with pricing models to ensure your product is commercially viable in the new market.

Testing product-market fit before expanding to a new market minimizes risks and maximizes your chances of success. By understanding the needs of your new audience, piloting your product, and iterating based on real feedback, you can make informed decisions and create a solid foundation for growth.

If you are thinking about launching into new markets in 2025, we would love to be your market research and strategy partner. Schedule a free meeting with us to discuss your expansion plans.

How can we help you?

Market Insyte offers personalised market research services tailored to entrepreneurs' needs.

If you would like to schedule a business model consultation, feel free to book a session here

If you would like us to conduct a personalised market research study, feel free to schedule a complimentary discovery call 

Browse our public market research library