Undertaking Market Research and Concept Development
You have a great idea and are anxious to get your new business underway. Make sure you take the time to find out if your idea is appealing to others and if it can stand on its own two feet. It may take time, but doing research early on can save you grief further down the road.
Determine your ideal customer by figuring out who you want to buy your product or utilize your services. This is important information because it will shape how you identify your customer-type and how you will market to this group of people. If you are not sure who your customers should be, consider factors such as your product cost, geographic location, and who will fully benefit from your product or service. With these considerations in mind, you should begin to visualize your idea customer.
You may also want to look at the buying trends of potential customers. Look at the time you spend doing market research as an opportunity to fine tune your product or service for the best possible result.
Market trends and demographics can be found in many different ways. For information on the kind of people who live in a particular area (age, race, income bracket, family size), also called demographics, it is best to consult the U.S. Census Bureau (www.census.gov). Finding lifestyle trends is more difficult. You may want to contact a local college or university’s marketing department to see if any studies have been done in the geographical or ideological area you are targeting. If not, you may have to conduct your own market surveying to learn whether or not your business will be successful.
In designing your custom-made market research instrument, decide how much time and money you want to spend. This may make your selection easy. Do you want to do it all alone? Can you find friends to help you out? How about spending some money and having college marketing students assist you? You may luck out and find a professor who will adopt your business for a classroom project.
The best way to find out what people want and what types of products or services they would consider buying is to ask them. This can be done in a number of different ways:
Put together some standard questions and go out and ask people in the market you are targeting. Know that people often avoid this type of experience because it is long and inconvenient. It is, however, inexpensive and relatively easy to implement.
This may be your best bet. Putting the survey together can be tricky and how well you do it will determine the quality of your results. Again, see if a marketing professor or professional would consider helping you to design your survey form. Once completed, hit the streets and ask people to complete the form. This is usually received better if you offer some type of incentive to the survey taker. Consider candy, cookies, or lottery tickets. You may want to enter their name into a drawing for some type of prize. Everyone loves a contest.
If the services you are providing are via the Internet, consult your database (you are compiling one, right?). Send a survey out to everyone and offer free t-shirts to the first 50 who return them on-line. This method can be time and cost efficient.
Surveys are not very expensive in and of themselves. Depending on your own creativity and knowledge base, the costs can add up when you figure in printing the surveys (if necessary), paying the survey administrators (if necessary), interpreting the data. Overall, this method is quick and relatively easy.
Basically, this is a group discussion where 4-8 participants are asked a series of questions in a facilitated setting. This approach is expensive because you have to hire a consultant to facilitate the group and move the discussion forward, plus you have to compensate the participants in some way. Due to the nature of the questioning, responses tend to be more complete and give more accurate information. The number of people questioned is lower than other methods due to the time it takes to perform the questioning.
The most important thing to realize is that the outcome of your market research may change the course of your business plans. In some instances you learn that there is not a need for your product or service. Often times, you need to change your focus or marketing plan. Be open and be flexible. And remember that market research is an ongoing process that really does not end. Be sure to always be in tune with your customer base so as not to be caught off guard by sudden market shifts.