22 Useful Questions
Market Research
August / September 2009
Volume 7 Number 4
Previously in this column I've discussed the need for defining an entrepreneur's first best market and how to go about doing it. The idea is that a startup with limited funds can't do it all at once in the beginning. The same is true when developing a marketing strategy for your new product.
With your initial market research, you'll be delving into a number of markets to boil them down to a manageable number. By asking similar questions for each market, you will not only streamline and focus your work, but you will also have an easier and quicker task of comparing and analyzing the results. To recap, here are some of the questions you will need to ask when paring down markets:
What is the application for the specific market? Are they the same or do they require product modifications for each one?
What is the value proposition for each market? Whatever market(s) has the strongest VP, or potential market impact, should be given the most consideration.
What kinds and numbers of customers are there for each application in each market? What you are looking for are actionable characteristics that will help guide you in marketing your product.
What is the market size for each market application? This is important, but remember again that the biggest isn't always the best.
Who are the competitors in each market? Yes, you have competition. What are your competitors' positive and negative attributes? You ideally want to find a gap in the market that you can exploit.
What are the issues in bringing your product to each market? Certifications, regulatory issues, lots of competition, and barriers in reaching customers are just a few issues.
What will it take to reach your potential customers? What sales and promotional tactics do they respond to and utilize in their analysis and decisions on products? What are the costs of each method?
What kind of experience or contacts do you have in each market?
Once you have a feel for which market might initially be best, it's time to address the go-to-market strategy. Again, you can't do everything, and that means focusing on what will bring about the desired results.
When you do your research, you will have found out specific methods that are used in your industry for reaching customers. Usually, this is a mix of multiple tactics and media. In particular, for industrial products, this will include trade shows, trade journal advertising, direct sales, specification sheets/product brochures, white papers, industry associations, blogs, and public relations. With limited resources, how do you decide on the appropriate tactics? You need to ask questions such as:
First, and most important, what are your goals? Are you trying to create awareness for your company? Are you launching a product?
Where do most potential customers hear about new products?
What do each of these promotional methods cost? For joining industry associations, it's the dues and travel expenses. For public relations, this may be hiring a PR person, or the costs associated with a press release if issuing it through established channels.
How many potential customers are readers/users of each method? What you are trying to determine is media reach, or the number of people who are exposed to a particular ad or method. You also want to note the appropriateness of the audiences: are they decision makers or influencers of purchasing decisions?
How do customers make their decisions?
What is the potential cost per customer? Include all costs, such as travel, printing or multiple ads to achieve frequency and reach.
What are the intangibles associated with each? For an industry group, this might be industry credibility. For a trade show, it also might be credibility, but also could be meeting potential customers face to face in an industry that demands that kind of person attention. You get the idea.
From this, you can develop your focused initial marketing mix. Keep your goals in mind, and realize that with limited resources you will have to make trade offs. If you are looking for company awareness, a well-placed press release might be best as the first tactic. If you are launching a product, a trade show, even though more expensive than some other methods, might achieve a fuller, more targeted customer audience and faster sales. Perhaps you can only start with one or two methods, but as more funds become available you can layer in additional ones.
Once you've developed your marketing strategy, you must also focus on the message you deliver in your marketing mix. As with focusing on your best market or best marketing strategy, it's important to go with what will get you the biggest results.
For example, let's assume that you have narrowed your market choice to two industries out of a possible ten. The product is the same, but the benefits to each market are different. You cannot do justice to both industries by including them in the same marketing collateral; they will need to be done separately to make sure the benefits messages are heard by the right industry folks. By the same token, if you have multiple milestones being met by your company, you may have a tendency to trumpet those all at once. If you do, the individual messages will be lost. You should focus on what will bring about the biggest return for your company.
Betsy Gillette is director of market research and planning for Technology Ventures Corporation.
More
Copyright © 2012 | Innovation America