Coming up with an idea for a new product can be exhilarating. Figuring out the product's commercial viability, though, involves a complex collection of factors that have to fall into place before that great idea lands in front of consumers and then takes off.
These factors include market research, technical expertise, financial capital (at least a reasonable amount), and stamina. The process of determining if your idea, your product, will be viable can be divided into five premise-questions that address each of the main parts of the total idea-to-marketplace pipeline:
- How do you define your product?
- What is the market for the product?
- What is the business sector of the product?
- What is the core function or use of the product?
- Is now the time to introduce the product and is your product better than any similar products that already exist? (Risk assessment and competitive analysis).
Knowing how to use high-quality research and consumer intelligence is key to your ultimate success.
Where to Begin?
The Small Business Administration (SBA) reports that seven out of 10 new businesses survive at least two years, and that half make it to the five-year mark. A third of all new businesses will see the 10-year mark, and a third will make it to year 15.
Tim Faley, managing director of the Samuel Zell & Robert H. Lurie Institute for Entrepreneurial Studies at the University of Michigan, suggests the first step in the process is collecting 'micro,' or anecdotal information that explores public interest in your proposed product. By gathering public opinion -- through personal and professional networks, and extended communities such as alumni groups or trade associations -- one can develop first-hand knowledge of the product's viability.
This phase of information gathering flows directly to the next step -- securing professional market research expertise, Faley said in an interview at Inc. Magazine.
At this crucial stage, you need to know the right questions to ask. Understanding the fundamentals of market research -- including the difference between primary and secondary research -- is a great way to begin your search for answers.
Faley of the University of Michigan says first-time entrepreneurs have to do their best to avoid rushing directly from their product concept, without first gathering "anecdotal data" from close-at-hand sources. "They miss that individual conversation in which people really reveal what they need," Faley said. This step in the process is also where scoping out competitive products is crucial.
In this phase, you are shaping a feasibility study that will be the roadmap of your product's success. Next, once you've gathered preliminary opinion about the viability of your product, and established base-line questions, it is time to seek out big market research, or megatrends. The turning point in this phase is obtaining business and consumer intelligence that will reveal actionable insights about your potential consumer base and your product's chances for succeeding.
What is My Consumer Market?
To help guide you through this high-stakes process, we've come up with a case study to illustrate the most important steps you'll take on the way to getting your product on the market. These steps are the points at which using actionable business intelligence - market research - are most crucial.
Who amongst us can't relate to the frustration of cleaning up flour off the floor every time you try to pour out one cup of flour for a cake recipe? Or spilling sugar all over the counter top, well...you get the idea. To help display the importance of using market research to take a product to market, we've come up with our own case study product. It's a counter-top dry ingredients dispenser modeled closely upon industrial-sized ingredients dispensers.
Here is what the commercial use flour-silo and ingredients handling dispenser looks like. It's used by food service companies and manufacturers. Our product (and our case study) would be manufactured and marketed specifically to consumers in a much smaller version.
An Austrian company, hb-technik, produces this product, along with other silo systems, and ingredients dispensers, all large-scale devices for industrial baking and storage. The Compo3000 industrial-sized "ingredients handling dispenser" is used by many commercial bakeries worldwide.
We will explore the question of whether this industrial-sized product's essential functionality - automating and streamlining the process of measuring and dispensing ingredients such as flour and sugar - can be scaled down for consumer kitchens.
In subsequent blog posts, we will examine how business intelligence reports can be used to help us decide:
- How to identify a solid market, niche or broad, for the consumer-friendly ingredients dispenser
- Patent research
- The cost-benefit analysis of producing the device
- How to obtain financing for manufacturing, distributing and marketing the device
- Identifying key demographic elements, including focus groups, and customer surveys.
Market research will also be vital in on-going intelligence gathering you'll need to inform the product launch and subsequent market-extension initiatives.
This phase can provide valuable information that can help you brand your product, even in terms of selecting the name of the device. (For the purposes of our case study, we have bestowed a temporary name upon our kitchen-sized ingredients management system: the Dynamic Ingredients Dispenser -- DID.)
Throughout, we'll also touch on the ways that investors use business intelligence to decide whether they will fund your idea -- another important piece of the puzzle that collectively makes up the process of bringing your great idea to fruition.
If you are ready to make the first step, but need some additional guidance, schedule a complimentary Business Intelligence Assessment to discuss your business strategy and how we can help you get it off the ground. We have a team of expert Account Managers who can talk to you about your product and/or your business and help you sort out which market research solution is best for your business.
We have consolidated a lot of this information and much more into a cohesive White Paper called How to Use Market Research to Launch Your Business. It's a must have if you are preparing to start up a business or take any product to market. Click below to get your copy.
Thanks for reading!
Senior Writer/Content Manager
Photo of Compo3000 Ingredients Dispenser courtesy of HB-teknik