Subhendu Pattnaik, Director, Marketing - Gallop Solutions, Start-up Mentor & Advisor
Arguably, organisational ecosystem today is outlining a very observable trend – breaking larger enterprises into infinite smaller sized highly productive teams or spinoffs from the parent brand and moreover, emergence of a new class of dynamic entrepreneurs who are attempting to repaint the industrial landscape. Upstarts are bringing in innovation which is challenging behemoths in their home turf, at most times fighting for the same pie of the market and even winning it. Some get into creating a separate market altogether. Yet others are finding comfort in narrowing their focus, making it laser-sharp and going after ultra-niche market segments to avoid large scale competition clashes. The question is what differentiates these high-octane start-ups from the thousand others who have an equally good product but are not as successful? Market research weaves this differentiation magic.
Does Market Research Help?
Imagine yourself selling ice-cream in a crowded street, blindfolded. If you are standing in a street next to a large diabetic hospital, you can still hear a lot of noises around you but there is no sale unless you are selling diabetic ice-creams. Your chances of sale would amplify significantly if you stand near a school. That too, if during the lunch break and that too your product needs to be colourfully packaged. Sales would drop if you are pricing it higher than your target audience can afford. No wonder, market research provides you direction for product development, packaging, pricing and even promotion and distribution. It helps you remove the blindfold.
Most start-ups adopt the ‘if you build it they will come’ mentality, assuming that an excellent product is all they need to build a business. Prior market research can uncover things you do not know and help you get there, much faster. Doing due research about the market should be the first step in launching any successful business. It holds true for not just start-ups but also established businesses launching a new line of service/product.
Top Benefits of Market Research
There is an unending list of products and businesses which failed, even from just an Indian perspective, because of incorrect assessment of market need. We had Vanilla Coke launched by Coke and Blue Pepsi, which failed miserably. While Vanilla Coke was marketed to a niche set of customers, the price tag was higher than the normal Coke and left little room for folks to ‘test’ the product and Clear Pepsi failed because of mismatch of customer expectations again – people did not get excited about a blue caffeine-free Pepsi. And there are many more such examples. Each of these product marketing attempts failed for different reasons, but we can surely say that all of them could have benefited from better market research before getting rolled out to the public.
Identifying the correct market segment, market readiness for the product/service you are offering, exploring size of the market, testing products and ideas which lead to planning Kotler’s 4Ps are definitely top areas where market research immensely helps. Based on inputs from market research, agile product development teams can build in consumer expectations into the product for a much wider adoption. Market research can also provide insights into market response to product or advertisement campaigns, brand awareness and help brands to discover where to take corrective action and where to increase momentum of activities performed. It can help find the right customers, understand existing customers, solve business problems while setting realistic targets and more. Needless to say, it helps define your overall marketing strategy and thus optimizing your spend and ROI. It can also help you spot current & upcoming trends in your market, reduce business risks and help zero in on more sales opportunities. Qualitative market research can also help in sourcing product ideas for a latent need, to ideate new service offering and so on. Market research is knowledge you receive when you take off the blindfold.
How do you do Market Research?
There are hundreds and thousands of companies who already have a first mover advantage and they have captured the market for their products. If you are starting afresh, how do you ensure you get there and lock horns with the unicorns in your field, without spending a fortune on market research?
Before getting started with Market research, first thing which needs to be checked is the credibility and authenticity of the information source. Government sites provide a host of useful data on economic indicators, employment statistics, income and earnings and so on which have high credibility. Other sources of information are trade groups, journals, academic institutions which are researching in the area of your interest, industry databases & freely available information on Internet. However, it is recommended to use a mix of various sources of information rather than using only one specific source of information, specifically online, to avoid data bias or inadequacy.
Understanding the way competitors function in the ecosystem, how customers react to their product and to product changes using primary market research (interviews, surveys, questionnaires, focus group sampling) can provide rich information. This is where you leverage the power of crowd. You can ask experiential questions regarding the product or idea perception and profile the customer segments based on demographics/responses etc. Leveraging secondary market research (research using existing published information – online or offline) also helps in benchmarking and identifying target segments. Collection of data is another important aspect of the process. Quantitative data validity demands a large sample while qualitative data can be time consuming to get, collate and make sense of.
Data always narrates a story. The stronger the relationship between what you needed to know for your business and what you obtain from market research, the stronger will be the narration of the story. The stronger the narration, the better will be the action from what you discover. And you definitely know if the market research is done right or wrong based on whether the data connects the dots for you & inspires you to move or does nothing at all.