It might sound obvious, but one of the key steps in taking a new product or service to market is to ensure you have a thorough understanding of that market. And by ‘thorough understanding’ we mean more than a vague gut feeling about the identity of your target audience and their needs, or educated guesses about the presence and market share of competitors.
It is in fact critical not to cut corners when it comes to market research, because the results of that market research will ideally underpin your entire ‘take to market’ campaign. The more information you have, the more effective business decisions you can make.
Get the information you need to make good decisions
Perhaps the first and most important reason to undertake market research is to avoid investing time and energy for little or no reward. You not only need to establish whether there IS a market (customers who’ll want your product/service and that there are enough of them), but you also need to establish which is the BEST (easiest to get to and the most profitable) market.
The results of good market research will arm you with the information you need to identify the optimum target market and thoroughly understand its parameters.
To illustrate this, consider one of our clients, the Smart Services CRC, developers of a new iSee videoconferencing platform with an emphasis on real time video collaboration with 20+ users and low bandwidth usage. In a competitive marketplace with over 90 competitors determining the right place for iSee in the market was crucial. Extensive market research identified the education and training sector as an ideal market; as online learning is increasing exponentially and the sector wasn’t well serviced with video engagement for large groups. This information gave iSee a focus for taking its product to market. Trials are now underway in schools, TAFE, universities and private companies around Australia.
Even if you are in the position to make educated guesses and assumptions, market research will validate decisions based on these and inform broader decision-making. In fact, be aware that the decision of which market to focus on (whether regional or industry-specific) may affect the way you approach the market. It may even affect the way you design your product or service.
Start market research early
We recommend you commence your market research as early as possible. This could be as soon as you have the idea for a new product or service; and is ideally before you decide to invest time and resources in its development.
It’s important to remember, however, that market research is only valid at the time it’s conducted – particularly in fast-moving industries – meaning you need to keep abreast of changes and developments across the life of a development project. We recommend the market research be reviewed regularly and particularly before any new and significant investment.
A good example of this philosophy in action occurred with another gemaker client, New South Innovations (NSi), a subsidiary of the University of New South Wales (UNSW) tasked with driving the outputs of UNSW research into use in the economy and society. For a project creating new and advanced photovoltaic (PV) cell structures and manufacturing processes, market research revealed a change in the marketplace that necessitated a change in strategy on how to collaborate with partners.
What do you need to know?
A question we get asked a lot at gemaker is where to start when it comes to market research. A list of questions we find useful as a starting point include:
- Who actually wants your great idea? Who will value it and buy it? (consider geographical region, demographic, industry sector…)
- What other solutions are already in this space (direct/indirect competitors)?
- How are your competition solutions priced?
- What is your unique selling point/differentiating characteristics?
- Are there any regulations in your markets of interest that might influence design ?
- Are there any other market characteristics (e.g. rebate schemes) that make one market more attractive (e.g. higher value) over another?
- Are there market compatibility issues to influence design (such as in software and networking)?
In this post we’ve explored the critical role of market research in a development project and provided a few ideas to help you get started. In the next post in this series we’ll look more closely at how to carry out a market research campaign to make sure you get the information you need. This three-part series will conclude with a post to illustrate how to use all that gold you uncover to inform business decisions.
In the meantime, if you have any questions about market research or would like to discuss how we can support you, please don’t hesitate to contact us.