Planning Your Market Research-Business Guide Part 7

Of course we’ve all heard about Market Research to get some answers to the big question of who’s going to buy your new-fangled product, but few will tell you how to go about it (or at least that was my experience), so can I suggest you plan it, just like planning most other processes.

The great benefit of market research is that it can avoid you losing the shirt off your back in a failed attempt at self-employment. Indeed it is ironically often those who have money and don’t have to go to the bank for a loan to start their new venture who end up losing everything because banks or other institutions will inevitably ask you for business plans and projections, thus you’ll be forced to explain how many people will probably buy your offer and even why and at what price. Indeed the who, how many and at what price are precisely the questions you will set out to establish during this work.

The first thing is to establish detailed objectives: To that end, saying you are going to sell car accessories would be a huge, all embracing term. By comparison though, to say you were going to sell a new specialist cleaner for alloy car wheels would be far more precise.

Once you’ve been able to be precise, you will find some of the other requirements of your research begin to fall into place a little easier. In the above example you would be able to progress to establishing how many cars were on the roads with alloy wheels that would be cleaned more effectively with your product.

Of course you would need to establish also, just where you could get that information and at that point it becomes pretty obvious that there is going to be two fundamental types of research – desk based and field research. One can imagine that the Internet is going to be a good starting point here or even the public library. There are many companies who can do the some of the surveys and provide a target audience if you have the funds. You may want to personally phone companies in the automotive industry to try and glean some statistics. I’m pretty certain you’ll find yourself visiting large buyers of such products to see if they will be prepared to stock it. You might also decide to look at companies who do indeed sell a wide range of motor accessories and thus might be willing to sell your new product. Don’t forget you will need a unique selling proposition of why yours is better than others.You could also set up your own online shop, however, that is altogether another proposition and at the moment we are just looking at the potential sales of your new product based on research rather than actually marketing your new product.

Given the example of the car wheel cleaner, you may deem it necessary to take a cross section of car owners and physically ask them if they would be interested in your cleaner. Local Council permission to do such research in your town centre multi-story car park or in the car park of a retail park that has a car accessories would I’m certain get to the point. You could even try to get permission to do a survey outside some of the car dealers in your area.

Some of the questions you could ask are
Does you car have alloy wheels? Yes/No
Do you use a wheel cleaner? Yes/No
When choosing a wheel cleaner which of the following matters to you most to you- A,B or C?
How often do you buy wheel cleaner-once a year, twice a year, more than twice a year?

Don’t forget of course (as if you could) that you’ll be asked “how much will it cost?” and “what if it doesn’t work?” and “why is it better than the other products out there” for both those questions you will have had to carefully considered your budget.

The last step of such research will be to do the sums and analyse the information you’ve acquired. As a simple example using the wheel cleaner as a product ,if there there were 30 million cars on the roads in the UK and 70% of those have alloy wheels you take a sample of say… 500 cars, asking their owners if they would buy your wheel cleaner and establish that 50 would try it, that’s 10% and that 10% would buy a wheel cleaner twice a year then:

30 million x 70% x 10% 21,000,000=2,100,000
2,100,000 x selling price X 2= revenue used in your budget calculations

Until next time

avatar Name: Alexandra Eager
About: Alex has worked as a Financial Controller and Finance Director for many years for a variety of companies across a range of industries but more recently she has moved away from accounting working for an internet marketing agency as Finance and Operations director, primarily overseeing the finance functions and search engine optimisation (SEO) for clients. Follow Alex on G+ and on Twitter @Alex_BusDirUK
Alex runs her own company with two fellow owners developing a suite of e-commerce web sites and promoting them directly. “I found that SEO and finance were quite compatible both needing an eye for detail, research and analysis as well keeping up with new developments and changes.”

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