Market Research – KING of product development strategy.
Coming from a product development and property development background I can tell you that KING may not be a strong enough word to describe how much I personally respect the quiet yet powerful due diligence value that market research offers to all projects. It is one of the simplest tasks you can do, does not have to cost a lot, and it is the single greatest indicator I trust when deciding what projects to get involved with. The downside (not really) is that good market research will often conclude that the best answer to a pending project is NO, and let’s face it, NO is a buzzkill.
I have been to so many trade shows in my life that I have lost count. Half of them I exhibited at, the other half I just walked the show as an attendee. The amount of beautiful, creative, and bold product/property presentations (big budget) that I have seen, that go nowhere, is simply stunning. Many of them (in my opinion) because they simply jumped into the market with both feet without doing enough, or any in some cases, market research. I say jumping into the market, but they really are not in the market, they are just on the fringes of the market, tossing money around and trying to get in. Hundreds if not thousands of hours and countless dollars committed to a project that simply was not vetted properly. Formal or informal market research can solve and prevent problems before they happen. Market research can actually turn a NO into a YES by getting outside your bubble and truly understanding your market. Crucially it can also turn a YES into a NO by telling you not to pursue something that has a snow balls chance in hell of succeeding.
Market research does not have to be expensive, it does not have to be extensive, it does not have to take a lot of time. What is required is a balanced approach. Respect the potential value of any given project and devote the necessary time and resources to your market research. The bigger the capital investment required, the bigger the risk = the more market research you should be doing to produce the best possible informed position. NO, as mentioned above, is a buzz kill, but I love the word NO. After years of being involved in great, good, bad, and ugly projects, I reflect back and say, we should have said NO more often, we should have done more market research at times. It is also interesting how the more I said NO to projects over the years because of market research, the more YES projects came about. Market research really is a powerful project tool.
There are 100 varying degrees of what one would consider a market research report. For me, I tend to work up market research reports from the broad strokes outlined below.
The One Hour Google Market Research Report Sometimes it can be as quick as that, you get pitched a project that seems so simple that you think why has no one thought of that? The NO one hour Google market research report means someone did think about it and that this project is just reinventing the wheel, but not in a good way. The YES one hour Google market research report means continuing on to the next phase. No external costs, except maybe an extra Starbucks coffee or four
The One Day Market Research Report Similar to above but also pulling from other resources like materials provided by a potential client. If I am involved in a one-day review then it means there is some meat to the bone, a project worthy of consideration. With this approach, I like to include a quick competitor review, the pros and cons of directly competing products that our potential competitors already sell, as well as some thoughts on costs, both manufacturing costs and retail price points. Some online patent searches are also involved at this stage. Generally, no external costs but it can end up being more than one day to produce this market research report.
The Commit Resources Market Research Report If we get to this point it means that we need to invest some money (outside of time resources). Money that might be for manufacturing material reports and environmental reports, (if we don’t have them or can’t get them for free). Money for extensive patent search. Money for travel to trade shows or specific retailers/distributors/properties (who may not be in our region) for an in-depth, in-person review, information that can only be gathered first hand. It could also be money for consultations with professionals that we may not have internally, to help qualify the viability of the project or trips to suppliers to get their input. The time frame can be anywhere from a few days to a few weeks to a few months depending on the scope and complexity of the project. There are costs for sure, but it is always better to spend money doing a thorough vet if you are this far down the line. A YES answer is exciting, it means a lot of work and investment ahead. A NO answer is a buzzkill, but sometimes that NO will save your quarter, year, or your company.
All of these approaches and every approach in-between are the necessary first steps to help determine the viability of any project. Market research may be boring at times but the reality is that it is the cheapest part of any project, and helps sets the foundations/boundaries needed for any successful project. Whether you are an investor, inventor, or a project leader, knowing your market inside and out will help make you a KING when it comes to picking winning projects and bringing them to market fruition.