Starting a business is exciting. However, in the rush to get your product to market, it's easy to get carried away, but you must carry out thorough market research to establish whether there is a viable market for your product. Eric Brandenburg of Marketest answers key questions about conducting basic market research
Every entrepreneur believes in his or her product or service. If it’s something you've created and developed, naturally you’ll be proud of it. You’ve developed it because you believe there is a demand for it. However, without reliable market research, how do you really know people will buy what you’re offering? You must do market research before launching your business. Better to make changes before launch than have to repair mistakes afterwards, when it could be too late.
Great. They might have a more objective point of view than yours, but not objective enough, I’m afraid. At best, they’ll only make up part of your potential customer base.
You need to determinate your target market and seek their feedback. They are not the only ones to survey, of course, but they are the first and most important ones. If they’re not interested in buying your product/service, there’s no point going on.
Depends on the profile of the people you survey and on the time and budget you have. It also depends on the product or service, too. If the profile of your target market is broad, you’ll need to speak to more respondents. A good representative number would be at least 200 people, maybe rising to 400 if it’s a mass-market product.
Start by asking respondents general market questions then move onto more precise questions about your business idea. Eventually, you can introduce your product/service and ask for specific feedback. Crucially, you must seek opinions not only about price, but value for money.
If you can gain access to potential customers nearby, you could do it face to face, but you must remain objective. Questionnaires can ensure you ask the same key questions to each respondent. You can do it over the phone or online but you’d need to find the contact details. Market research companies can help you find respondents.
It’s always good to start by looking at existing information such as market reports – it’s called “secondary market research”. You can then research the missing information, carrying out your own “primary market research”.
Quantitative research means to measure or quantify information, ultimately to create numerical data. Qualitative research seeks to provide an understanding of perceptions, motivations, intentions, behaviours, etc.
It’s essential. You need people’s honest responses to your idea/products/services, which is why it can be better to use a professional market researcher if you have the budget, because that should guarantee objectivity. Certain field research methods are more objective than others. For example, people might be more likely to give their honest opinions when completing an online response, when they might hold back when speaking face to face.
It’s better to get negative feedback before you launch a product or business. Constructive criticism is valuable; it enables you to modify, adapt your product or service – or in the worst case, scrap it altogether, but this could prevent you making an expensive mistake. If criticism reflects a general opinion you cannot afford to ignore it. Work with it; use it to your advantage; benefit from it.