The Need For Market Research
Updated: Mar 9, 2022
The last thing that any business wants to do is to spend time and money developing and manufacturing a new product only to find that there is no demand for it when they put it on the market. It is remarkable the number of people I have met over the years who are prepared to spend large amounts of money on design, prototyping and production but refuse to invest even a fraction of that on proper market research. Defining the benefits of your product and asking your target market if it wants and needs a product that offers such benefits is the most essential, most basic research anyone should do before developing a new product.
Here are some basic's you need to know before starting your product development project:
WHO are you target customers - your core market that will account for 80% of sales?
WHERE are they located?
WHAT are their needs and how does your product service those needs?
HOW will you make them aware of your product?
WHY will they choose your product over a competitor product.
WHAT factors influence their buying decisions?
WHEN and WHERE are they likely to buy your product.
This is all primary research and can only be gathered by talking to your target customers either directly through interviews and surveys or through the use of focus groups. Interviews and surveys can be conducted face to face using clipboards and interviewers or through the likes of Survey Monkey which allows you to email survey links to target customers.
If your target customers are businesses, then you have to identify the right person(s) in the business who will make the purchasing decision. When dealing with large companies such as multinationals, purchasing decisions are often made by three or four different departments (for example, marketing, technical, procurement and finance) so you might have to establish what the different needs of each department are and address them individually in terms of your offering.
Secondary research is more focused on the overall market and the industry into which you are selling your product. In this research you are really looking to find out:
HOW big is the potential market and how many competitors are there already?
WHO are the main competitors and what can you offer that they don't have?
WHO are the big buyers in the industry (distributors, retailers, etc.,)?
WHAT substitute products are your target customers currently buying?
WHAT are the barriers to entry for this industry and how can you overcome them?
WHAT legislative and mandatory requirements exist in this market that you must comply with?
In many ways, secondary research is easier insofar as much of it can be done online. Competitor websites and company reports are great sources of information for building a big picture of an industry. Social media is a great source for identifying trends and seeing what products or services are currently popular. Primary research often involves legwork - going to stores to see how competitor products are displayed for example and trying to accurately interpret consumer responses to questionnaires. Making assumptions that customers will act or behave in a certain way is a dangerous business - you really need to get the data to support any assumptions.
Market research is something that needs to be done before you start and then updated along the way as your product and your business develop. Sometimes people wait until they have reached prototype or even pre-production stage before asking the critical questions of their target market only to find that they have left out something important or entirely missed the boat in terms of presenting a product that meets customer’s needs. If you don't ask the customer what they need and want, then you are quite likely to present them with something that they are not interested in and not willing to pay for.