After you have determined whether your new product idea or service is viable for starting a new business, the next step is to figure out what consumer segment is most suitable for taking a product to market. Your market research process is a major contributor to starting a new business.
In the instance of our case study product, the Dynamic Ingredients Dispenser (DID), we already have a clear sales strategy: the home consumer market. As a result, the next step is to get more granular and figure out whom the real target in the market is.
Taking this step will prevent two very common and disastrous mistakes made during the launch of a new product idea:
I already know who I want to market to because I already have an understanding of the industry.
Without unbiased professional research, it is very challenging to identify the full picture of who wants to buy your product. In fact, there may even be customers out there that you never would have considered viable, potential customers that you only discover once you begin the market research process to taking your product to market.
In our case, it would be easy to assume that we would be targeting women ages 30-40 with 2-4 children for the convenience factor our product offers. However, what about the young couples ages 25-30 who may want the product because they want the same type of cooking tools they see on their favorite cooking shows? What if it’s really affluent single parents without as much time for cooking, who turn out to be a good fit? Only careful study of the market through professional market research can really answer this question.
I don’t want to target one specific demographic. By marketing to all of them, I would get more business, right?
While it is good to get as broad a base as possible, advertising for a new concept must focus on a definable target market in order to have enough impact on the buying decisions of your potential customers. In our case, it would be quite challenging to make one advertisement that appeal directly to both the possible young, affluent consumer as well as the older or more frugal buyers.
Even the look and features of your final product and its packaging should be heavily influenced by whom you intend the product for. Thus, going with a more general approach prevents you from tailoring your product enough to really grab the interest of any one potential customer group. As they say, “A jack of all trades is a master of none."
So what kind of reports will help prevent these mistakes?
Demographic market research reports have exactly the kind of information that can help you. These reports often examine markets broken down by age, gender, ethnic background and affluence. They are based upon the opinions of respected industry leaders and commonly contain survey data that taps directly into what the people in each of these markets wants from the products and services they use.
Ultimately, your plans for your product and its placement are only as good as the information these plans are made. So, spending the time and money early on to make sure you have a good understanding of who will actually use your offering is a critical step in making the project a success. Market research is the most reliable vehicle for gaining that understanding.
To get a more thorough understanding of market research and not only how it can help you position your product in the market, but also how to assess your competition, explore your financing opportunities, shape your marketing, advertising and more, contact us for a free market research assessment.
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