Market Research 101

Market Research 101

Delving Deeper
Once you've gained your "big picture" information through secondary research--and nothing you've found has told you to abandon the project--it's time to narrow your focus and zero in on the consumer.

Primary research is information you'll generate yourself through interviews and other methods, specifically about your product or business. This info will help you fill in the gaps that your secondary research didn't produce. The totality of this combined set of data will provide you with two avenues to take. It'll either strengthen your case and conviction to move forward, or it can help you determine that your market opportunity is limited (even if your product idea is clever). Either way, you'll be in a better position to decide if this idea is worth investing the time, energy and money necessary.

There are several ways to gather this type of more personalized data. The method you choose will depend on the specific information you're seeking and the size of your budget. Examples of primary research include focus groups (formal and informal), intercepts (stopping people in their environment), bulletin boards (internet), e-mails to friends and family, direct-mail surveys, and phone interviews. Some methods require a financial commitment; however, most of the information can be gathered on a shoestring budget.

Before you begin your primary research, be sure to map out exactly what you'd like to learn. Ask yourself the following questions: What business decisions do you want to make from this research? Who do you think you should talk to? If you could only get an answer to one question, what would it be?

Then decide which of the following methods will most efficiently and cost-effectively get the results you're seeking. Here's a quick summary of what each entails:

  • Informal focus groups. Get a group of people together who will share their feedback in an environment where answers can be clarified and shades of thinking and opinion can be dissected. This can be as simple as inviting five dog owners to your home to answer your questions and provide feedback on your product.
  • Person-on-the-street interviews. This method involves going to public areas where there's a high proportion of your target market (i.e., a dog run at a local park). Ask each person the same list of questions and keep it short to respect their time.
  • Online bulletin boards. There are countless websites with message/bulletin boards, where very diverse groups can be found with whom you can open a dialogue. On the bulletin board, create a new topic, tell people exactly what you're doing (developing a new product that does "X"), and let them know you value their advice and feedback.
  • E-mail blast. Send a mass e-mail to your network of family, friends and business associates explaining what you're doing. Include your relevant questions, and ask that your recipients forward the e-mail to anyone else who might participate (i.e., any dog owners they know).
  • Direct-mail survey. Purchase a list of target customers, developing a mailer with questions to send to them, and include a postage-paid return envelope for their responses.
  • Telephone survey. Hire a research organization with a call center. This method is ideal for close-ended questions (e.g., Yes/No answers, multiple choice, etc.) and should be limited to less than 20 minutes to collect true insights. Market research firms all over the country can script, field and process the results of a phone survey. Phone surveys are ideal for making final decisions on a product such as pricing or choosing a name.

One good resource to augment your own work is a feasibility assessment by the Wisconsin Innovation Service Center run by the University of Wisconsin in Madison.

Your findings from market research are critical because they'll help you make good business decisions. Not only will your research help determine whether or not there's a viable market for your product, it'll also help you hone and tweak your product to fit consumers' individual needs. Though your research may not fill all the gaps--especially under the constraints of a tight budget--you'll nevertheless dramatically improve your ability to make decisions, which can mean the difference between profit and failure. This information is extremely important to have before you take your next step: manufacturing.

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Your Million Dollar Dream: Regain Control & Be Your Own Boss 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.

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