How To: Determine If Your Product Is Viable September 8th, 2008 · 4 Comments by Romy Schorr, Ladies Who Launch member, Los Angeles Let’s say you start a small perfume business. You write a business plan, secure funding, design a logo, choose a name, and spend hours negotiating boutique shelf space. But despite tremendous effort and a terrific product, your perfume isn’t selling. Unfortunately, your bottle is dull and unappealing. If only you’d done market research … Deciding against market research is a mistake small business owners often make, believing that passion for their product is enough. They see market research as expensive, unnecessary, and too complicated, not to mention a potential source of harsh, negative feedback. But they need to understand that tuning in to the lifestyles, needs, and preferences of potential customers can make their businesses more successful. Big businesses, which wouldn’t dream of launching a product without market research, all know this. Market research helps businesses: · Test the appeal of a product · Obtain feedback · Check in on customer needs · Review an advertising campaign before it is launched · Talk to the target audience · Understand market trends and conditions · Make informed business decisions · Size up the competition · Set prices · Create development and sales strategies · Anticipate challenges and obstacles before it’s too late Research data provides businesses a solid footing and points them in the right direction. However, it is not an absolute science or a guarantee of success. This process allows for tweaks, fine tuning, and, most importantly, early warning of major obstacles to your success. What Are the Different Types of Market Research? With guidance and advice, you’ll be able to do some basic market research to fit any budget (or no research budget) if you’re willing to put in a little work. Primary research. Collecting data by directly talking to your target customer (or a competitor’s customer) about your product or service and obtaining answers to specific questions. Secondary research. Analyzing existing data compiled by a third party about a product, service, or category to understand industry trends. Often companies will buy reports containing information relevant to their business. Quantitative research. Conducting a large-scale survey consisting of questions and a fixed set of answers over the phone, in person, or online. This provides statistically relevant results and a percentage number to help make or support a business decision or to utilize in marketing materials. For example: “81 percent of respondents were highly likely to buy product xyz.” Qualitative research. Conducted through in-person focus groups, interviews, intercepts, and observations of people in stores/homes/restaurants/offices. Questions are deliberately openended in order to explore consumer attitudes, behaviors, and beliefs. How Can a Small Business Conduct Market Research? Use the Internet. Do an exhaustive search of everything and anything related to your business. Find out who’s doing what and learn from existing data. You need to do your homework to see where the opportunities lie. Talk to people. Especially those you believe are your target customers. Ask them what they think about your product, how it compares to your competitors’ products, what they like and don’t like, and what you can do to make it more appealing. Observe their behavior using your product and a competitor’s. Set up an informal discussion group (provide dinner or appetizers— people will come for yummy eats) and present your ideas, share your product, and ask for candid feedback. Be prepared to hear both positive and negative comments. Send out a survey. Social networking groups are an easy place to start. Or use an online survey company like SurveyMonkey. Look at the big picture. Use the insights to gain perspective and directional suggestions about your business rather than as a critique about what you’re doing wrong. If you’re not exploring the competitive landscape and talking to your target audience, you are missing a valuable business opportunity. Market research can be easy and affordable. Now it’s up to you to start the process. You can’t afford not to. Romy Schorr is a member of the Los Angeles Incubator, a marketing research consultant, and the co-founder of Schorr Creative Solutions, Inc. For more articles like this, visit www.ladieswholaunch.com, the first company to provide resources and connections exclusively for women entrepreneurs.