Want to validate your new idea in the market and test its viability? Or you already have a product in the market but are not seeing the expected results? Else your product is present in a few markets and you want to expand its reach further? These are questions for which a business needs to find answers to from time to time. And market research offers a reliable way to understand the market and plan your next steps.
At Prayag, we are in the midst of two market studies, both for start-ups looking to launch new concepts in the market. One study is an early market validation exercise where the client wants to introduce a new and improved food product in a specific city in India. The objectives of the survey are –validate the product concept, estimate demand and understand the typical buyer profile in depth. The other study is to determine the demand for an existing product, a hobby kit for children, pan-India and the objectives were similar. It was encouraging to see two start-ups invest time and money in a market study that will definitely influence their decisions and planning.
Why are these studies important? Because they help:
a. Identify the right profile of target audience including age group, education and professional background, and other demographics
b. Determine positioning for the product based on expectations and views of prospective buyers
c. Highlight reservations about the product from the buyers
d. Suggest channels for selling the product – this is where the target group expected to find the product
e. Throw light on pricing and provide understanding of what would prevent the buyers from purchasing the product
In the case of the client with the hobby kit, the findings are especially critical as it as an “in-use” product and the study showed that they were certain aspects that they had not considered before. Companies tend to view a product from their understanding and what they think the market would expect. More often than not, this may not tie in with the actual situation. Rather than give up on the product as a failed venture, taking the time to understand the market and fine tuning your approach may hold the key to success. Similarly for the new product venture, the market study offers clear insights in to who is likely to become a buyer and how to reach them. For a start-up, I would think that is valuable information.
I will highly recommend considering inputs from a market study before making a major business decision. Use this as one of your inputs in your strategy planning along with your experience and business situation – it is worth it.