When you’re launching a product or considering new markets, do you perform market research before moving ahead? If you do, then are you really listening to the results, or just looking for results that support what you’ve already decided to do?
Companies, that I have seen, that conduct their own research sometimes get caught looking for data points to support what they want to do rather than looking for data points to validate their ideas. Market leaders truly embrace market research, and when they do get results that don’t support their position, they change their strategic direction.
Before you start a business, you need to look at total strategy development, with research as a component of the plan. You need to know your markets, who your customers are, who the competition is, what price points you can use to position your product, and what sales channel you should use. Answers to these questions are all gained through market research, by digging into data, using industry reports, accessing online data, using government information, conducting face-to-face focus groups and phone surveys, and attending industry trade shows.
Market research provides you with the base to develop the strategy and provides direction for move forward. But as you continue, you may find that you need to change your strategy. For example, you may find that a business similar to the one you want to start so you may decide an acquisition is a better path than startup.
Although there are ways to ‘mine’ the data yourself, it’s sometimes better to have an outside party involved to validate your plan and help you develop a strategy. Having that outside research partner gives you input from someone who may see something you are overlooking because of a bias. An outside research partner may minimize ‘group’ think and may provide a different view when looking at the same data.
Before developing a new product, a market researcher should be involved from the development of the idea through all the stages of the product development cycle. This includes from design to marketing to sales. For example, if a company has an idea, market research can help validate and define market potential. Basic questions will be answered. Will anyone buy the product? How will it be used? What features should be included that benefit the customer? How should it be priced? How will it get to market?
In fact, in the initial research, you may find the product isn’t needed. For example, a sales group suggested a new product, but the company wasn’t sure it could allocate the engineering design resources. In this instance, the marketing partner surveyed customers regarding the features and functions of the new product. In the end, the customers said they didn’t need the features. This research saved the business a significant amount of money in engineering resources, freeing those people to perfect products the company already had. This is what the customers wanted.
Another example of market researching being used to validate a new product involves a product being developed for the fire industry. Focus groups helped to shape the idea for the product and then broader population of fire chiefs evaluated it. From that research, a prototype was developed and sent to fire departments for beta testing, and it was then sent to a university to test according to established industry criteria. After each step, the process was stopped and evaluated to determine if it should continue. The product launch was successful. Had it not gone through all of those stages, the company could have gone to the considerable expense of developing a new product that nobody wanted.
You should know where your competition and your customers are located. You should map where your customer base and potential customers are. Then you need to ask, do I have the proper support? Do I need channel partners to sell to this new area? Do I have the direct sales team to support this new area? You also need to consider regional pricing issues. Take the time to look at the strategy you want to implement, find additional data, and if it’s a significant opportunity, go to the area to look around and talk to local officials and the chamber of commerce.
A market research professional can help you determine possible results before you even get started. A research professional can also help you establish your objectives. Are you looking to grow sales revenue, reduce costs, increase brand awareness and recognition, or take market share from a competitor?
They will help you dig in to what you do well and what needs improvement. They should provide a collaborative environment and work closely with you, treating every decision as if it was a decision they had to make themselves for their own business. At the end of the day, that person is telling a story to your business. It may not be a story that you want to hear, but it includes all the facts, allowing you to make an informed decision to grow your business.
Have questions about how to grow your business? Contact our market research services professionals by posting a comment below or by calling 440-449-6800.