Market research is one of the most essential steps in the product development process. Yet, it's also the step most commonly skipped. By ignoring it, you may be missing out on feedback critical to your product's success, as well as an accurately defined target market.
Most inventors begin with some idea of what defines their target market. If you've invented a new video game, your market is probably loosely defined by preteens and teenagers, for example. If it's a newfangled tool belt, it's probably an adult male majority. However, you may be surprised by the valuable subtleties market research can turn up. You may discover that twenty- and thirtysomethings also offer big sales potential for your video game--or that women absolutely love your tool belt.
As important to understanding "who," is knowing "why" and "what." After all, consumers are getting by today without your product. What are they using now to solve that problem? Why would they switch to your product, and how much would they pay?
This is why market research is so important. While you'll begin with an educated idea about your target markets, your research will fine-tune this information and provide feedback on how to potentially improve your product.
Let's start by defining the two types of market research: primary and secondary. Secondary research will turn up data that already exists. I like to think of it as big-picture research. It's information that'll draw a picture of your market potential, such as population numbers, gender and other demographic information. This type of information is readily available through magazine articles, in which journalists have already done the research for you. You can also find important population data about your target market at Census.gov .
Primary research fills in the blanks left by your secondary research and usually pertains directly to your product. This is information you'll gather through focus groups, interviews and other methods that define your market's habits and behaviors as they relate to your product. For example, "I only shop for video games online."
The data you collect can direct you in very specific ways. And it should definitely be completed before you mass produce your product. I've known businesspeople who've completely designed, developed, packaged, manufactured and patented their ideas and then ended up saying, "Help! No one is purchasing my product, and I've spent a fortune." At this stage, there are a number of things that could've gone wrong:
- There's a disconnect between the product and the consumer. In some cases, the inventor may feel it's an idea that can't miss because it's been validated by a best friend or a family member--but they've never really critically analyzed it. Even large companies with huge budgets can misjudge demand. Remember New Coke?
- There's a problem with price. If the price is too high for the problem the product aims to solve, people simply won't see the value in purchasing it.
- The packaging misses the mark. Perhaps it's not clear what your product actually does. Maybe the packaging is dull and gets lost on store shelves, or it's too large for the retailer to hang on a peg. Potential customers will lose patience, and you'll lose the sale.
- There's a product that's already working. Even if your product is original or patented, it may be so similar to something consumers are already using, they won't see the value in it.
You can avoid many of the above problems by testing for the following:
Product functionality. Before mass producing your product, do some focus group testing to be sure people want it--and like using it. The most important thing at this stage is for focus group participants to be completely candid. For instance, the first product I invented is the TP Saver, which prevents toddlers from unrolling the toilet paper from the holder. In my focus groups, I wanted participants to tell me whether my final product prototype was easy and intuitive to use and if it was something they'd purchase or recommend to solve the problem. I wanted them to point out any potential flaws or functional difficulties, so I could improve the product before mass producing it.
Comfort level with price. Everyone likes to solve a problem, but at what price? For instance, I assumed customers wouldn't be willing to spend $50 to solve their toilet paper problems outlined above. But I figured $5.99 might be worth it to end the aggravation. I was right. This price was agreeable to my test market--and later, to the market at large.
Packaging effectiveness. Yes, your packaging should be eye-catching; it should be aesthetically pleasing; and the design should represent your brand. But don't forget to effectively communicate your product's purpose. If it's completely new and different, your customers won't know what they're looking at on store shelves. Be sure to communicate your product's features and benefits quickly and succinctly on your packaging. Think of these questions when developing your packaging communication:
- What specific features make it unique?
- What problem does it solve for my customer?
- How will it make my customer's life better or easier?
Keep it short and simple. You only have about three seconds to capture a new customer's attention. You don't want the customer to lose patience or be overwhelmed by too much information.
Potential competitors. Find out from your test market if there's a product they believe solves the same one yours does--and if they're using it already. If so, what are its strengths? What does it lack? And what would make them buy yours instead? For example, dryer sheet fabric softeners have been around for a long time. A new invention--essentially a small spiked ball you throw in the clothes dryer--claims to work as effectively as dryer sheets. The two products may solve the same problem, but some may prefer one to the other. Perhaps some like the dryer sheets' scent while others are sensitive to its chemicals. This is the type of information you'll discover through market research.
Additional markets. Your research may uncover a market for your product you never considered. Take national electronics retailer Best Buy. Traditionally, the company targeted adult male consumers. But after research revealed an increasing number of female electronics buyers, Best Buy created an in-store experience that would better meet women's needs. With the TP Saver, my own research uncovered a market I'd never considered--pet owners. It seems dogs and cats take as much pleasure in manipulating the toilet paper roll as toddlers do.
So you can see why it's so important to do market research before investing too much in your product. Although it takes some time and financial resources, your discoveries can help set you on a more focused path and avoid expensive mistakes.
And for inventors with multiple ideas, gaining this knowledge and information is a great way to help decide which product to take to market first.
Tamara Monosoff is the author of Your Million Dollar Dream: Regain Control & Be Your Own Boss and The Mom Inventors Handbook, Secrets of Millionaire Moms, and co-author of The One Page Business Plan for Women in Business. She is also the and CEO of www.MomInvented.com. Connect on Twitter: @mominventors and on Facebook: facebook.com/MomInvented.