The goal of market research is to help you figure out what your customer wants. In today’s world, e-commerce sites and online options only make competition stiffer, meaning that understanding the wants and needs of your customers is the absolute key to success.
“Whereas in the past a small business had competition from other, often local, small businesses and their customers were known, today a small business competes in a much larger field,” explains Jose Scheuer, a lecturer in business and marketing at the London School of Business and Finance. “Competitors are much larger and have greater negotiating power to source and sell at cheaper prices.
The Most Important Market Research Questions
In addition to this, small businesses face competition from the unstoppable growth from e-commerce.”
The bottom line? Whether you’re running a multinational corporation or a one-man show, market research is essential when developing a new product. Here are the three questions every entrepreneur needs to keep in mind when conducting market research.
Is there a market for my product?
First and foremost, before developing a product you need to carefully examine market needs, market growth, and market trends in order to evaluate whether or not there will be a demand for your product. This includes carefully evaluating what kind of consumer need your product meets, as well what other products on the market currently meet this need (if there are any). Remember, it is always a good idea to define your product offering in terms of target market needs. That way you can focus on the buyer needs you satisfy, rather than what you have to sell. At this juncture you will also need to carefully consider any established or emerging market trends that could affect your target market.
Who are is my target customer?
In order to figure out whether or not there is a market for your product, you also need to learn more about your target consumer. Here it helps to segment your market into different workable segments. There are an infinite number of possibilities for this segmentation — age, income, lifestyle factors, geographical location, etc. When developing these segments, you will want to consider what factors differentiate purchasing choices between consumers. Does age influence what kind of restaurants people eat at? Or does income play more of a factor? Once you have established these segments, you will want to prioritize them, taking into consideration market potential in each segment. The segment with the highest priority will be your target consumer.
How much is my target customer willing to pay?
Once you have your target consumer established, you need to figure out how much he is willing to pay for your product. This will be established by looking at any pre-existing competitive products, as well as by taking a look at economic data pertaining to income, discretionary spending, etc. Keep in mind you not only need to understand how much money your target consumer is willing to pay, but also how often he is willing to pay it, especially if you are selling a product or service that is finite in nature.
Pivot International is a product design, development, and manufacturing firm with extensive experience in the medtech industry. If you are interested in engineering a new product or updating an existing product, contact us at 1-877-206-5001 or request your free consultation today.
