Meeting customer needs is considered to be vital for new product success. This study explores customer need identification and related challenges in product management and research and development (R&D) in a mar-ket-driven context, where a large number of customers exist. This paper reviews the literature on customer inte-raction and needs in a product development context. Despite the rich literature, product management and R&D angle have not been sufficiently addressed. Thus, customer need identification and challenges from product management and R&D managers’ perspectives are studied in two new product development (NPD) projects: one in business-to-business (B2B) and the other in business-to-consumer (B2C) market. While differences between B2B and B2C markets exist, the results indicate that product management professionals must collaborate with various stakeholders and utilize many information sources to obtain and interpret diverging customer needs. Recommended practices for companies to tackle various customer-need related challenges include systematic ways of working, small cross-functional teams in product definition, and avoiding early handovers between product management and R&D. Besides internal collaboration, product management and R&D professionals should aim for some direct contact with selected external customers to clarify the real and project specific needs, and to build overall understanding about customers.
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