Understanding the market you intend to trade within, what customers want, or what competitors do is imperative for both product development and service development. To position your product or service effectively you must conduct the appropriate market research and subsequent analysis.
Market research is either primary or secondary. Primary is typically exploratory and consists of interviews, surveys, observations, and trials. Secondary research is predominantly desk research whereby existing reports, articles, competitor content, and studies can be drawn upon to assess market opportunities and risks.At Pretty Pragmatic, we’re certified market researchers and proud to be company partners of the Market Research Society (MRS), meaning we uphold the code of conduct so you can trust us to be professional from inception to execution. This is pretty important to ensure fair and proper use of people’s data and responses, and GDPR governance applies as much to this area of marketing as any other.
Not all research is created equal, with time and budget having a big bearing on what you can do and how comprehensively you can do it.
There are also variances between B2B and B2C approaches. In the case of B2C, respondents are typically consumers and direct purchases of a product or users of a service, and whilst they may be making these decisions on behalf of their friends, family or themselves, they are usually using their own disposable funds.
Whereas in B2B, Decision Making Units (DMUs) exist and the budgets may be larger, the timescales longer, and the subsequent service agreements can be more complex. In the next instalment in this product development series we’ll focus on audience identification in greater detail, but in order to conduct accurately targeted research, audience specification is required – often by creating segments and personas.
A good place to start is with existing customers, especially if you have great marketable data. In these situations, you can usually conduct primary market research, whereby you can determine the data that is gathered specifically for your business.
The key here is to keep the questions succinct and short, especially when targeting a quantitative sample. You may choose to incentivise responses, but these will be subject to laws that will differ across countries, and you may need some legal guidance.
In B2B there may be fewer target buyers and influencers, so in order to gather insights from customers, qualitative methods such as focus groups or in-depth interviews may be more appropriate. However, quantitative and qualitative methods are valid for both B2B and B2C. By the time the product is developed, it may be mostly stats and market sizing that are required. However, prototyping and gathering feedback would be valuable in advance of the finalised product. As Steve Jobs said, ‘It’s really hard to design products by focus groups. A lot of times people don’t know what they want until you show it to them’. But once you have, you need to be prepared to make amends, within reason.
However, beyond customer research, it is important that market research is undertaken and used to validate what and where the opportunity is, how much competition there is, and what the associated risks are.
Competitor research and audits are invaluable in market research, particularly when considering launching a new product or service. Ideally, this will have been assessed to a reasonable level before investing too heavily in product development.
You can gather a great deal of information from competitor channels as to what they are offering from a price, feature, and service perspective. However you can’t always know what is going on behind closed doors, and there are instances where a competitor is innovating in parallel and may pip you to the post in terms of a release, or perhaps an acquisition enhances their current offering.
You can, of course, add a ‘me too’ offer to the market, especially if you think you can compete on spec, service, or price and ultimately steal market share. But if you don’t have the sufficient resources to compete with a strong enough offer, it may be a point to consider shelving the idea.
Internal stakeholders, i.e. your business’ people, from divisions such as sales and customer services, can hold a wealth of valuable information.
Workshops and interviews can be conducted to gather as much detail as possible to inform situational analysis and SWOT frameworks. Typically they’ll have a good feeling for competitors so they can help shortcut the search of competitors when forming the basis for the competitor research.
They can also provide alternative options for service offerings and be open and honest about any issues that may need addressing.
Then there’s a PEST or the extended PESTEL analysis, ensuring you have identified any political, economic, social, technological, environmental, and legal factors that may impact your product or service launch.
This can become complex when several geographic locations are in scope.
Once some or all of this is completed it is time to analyse and determine the situation and move on. It can be challenging to remain objective, but any red flags should be raised at this stage and therefore you’ll be aware of the risks and the potential rewards before proceeding further.
After you’ve done all you can in terms of sussing out your market and doing the digging and due diligence, you need to objectively analyse and assess the situation. This is where you make the call to park or plough on.
So to sum up, you need to:
- Research your potential customers: Who, if anyone, is going to buy from you?
- Know your competitors: Who are you going up against and can you compete or overtake?
- SWOT up: What are your strengths and weaknesses and where are your opportunities and threats
- Get an outside perspective: You can’t control external factors, but you ought to be aware of them, a PEST(EL) can help outline these from the outset.
Next, in the product development series, we’ll be covering audience identification and needs, so we can gain more focus when going to market with a new product or service.