Conducting Initial Market Research
Download her free Entrepreneurship Roadmap at www.gloryenyinnaya.com.
“The aim of marketing is to know and understand the customer so well that the product or service sells itself”
– Peter Drucker, Professor, and Father of Management
Market research is the commercial equivalent of “looking before you leap”. Having hit on your “eureka idea”, you cannot immediately rush to the marketplace to implement. You need to test the receptiveness of your target market to your idea.
In order to develop a sound business, you need a concrete strategy. Therefore, you are advised to conduct your market research using the 3C’s strategy (customers, competition, and company) by Kenechi Ohimae. The philosophy of the 3C’s is here explained: What is that thing that the customer wants, that competition cannot deliver, and that a new company can offer? The use of the 3C’s demands the conduct of a market research.
Market research can be conducted in several ways – surveys, focus group discussions, interviews, observation, etc. Market research can be primary or secondary. You may conduct your research online using free tools such as Survey Monkey: www.surveymonkey.com.
Regardless of the means, you use to gather information from your customers, the following information needs to be uncovered:
1) What the Customer Wants
Identify your internal stakeholders (yourself and your team members) You also need to identify your external stakeholders.
If your customers are individuals, they can be segmented according to characteristics such as:
- Geographic location
If your customers are businesses, they can be segmented according to the following characteristics:
- Number of employees
- Geographic location
After segmentation, you need to identify your target market and create a profile of your target market using categories such as geography, behavior, demographics, etc. Note the total number of target businesses and the potential market size.
2) What the Competition Cannot Deliver
Identify who your competitors are. Draw the entire competitive landscape of both local and international competitors. Which companies are most likely to launch a successful attack on your idea?
Analyze the messages of your competitors. How are your competitors trying to appeal to your customers? How can your company differentiate itself?
3) What Your Company Can Offer
Conduct an internal assessment of the company along with the following elements:
- Who you are
- Where you are
- What you plan to sell
- How you are run
Putting all this information together, conduct a SWOT analysis and identify what your company can deliver.
4) Integration of insights
Integrate all the insights from the customers, company, and competition and come up with a market gap, which your product can fill. It should answer the following questions:
- What is your value proposition?
- Who will deliver it?
- What will be delivered?
- How will they deliver it?
5) Strategic imperatives
In order to deliver on your brand promise, how are you going to engineer your operations? You need to identify the following strategic imperatives:
- Product strategy
- Pricing strategy
- Place/distribution strategy
- Promotion strategy
6) Action Steps
- Conduct a market research using any of the aforementioned instruments. Sample questions include:
- What’s your reaction to this product?
- Please rate the salient attributes of the product?
- What product(s) are you in need of that other companies and other institutions that offer similar services are yet to provide?
- How willing would you be to subscribe to a product such as this for 500NGN/month?
- Use the results to develop a marketing communications plan for your new product
- Create a budget for your marketing activities
- Identify the possible risks and plans for mitigating the risks of the new product launch