Does a market exist for your product?
It seems insane to most entrepreneurs that their ‘great problem-solving idea’ may not sell once it’s delivered to market. However, factors such as cost, how it is advertised and the timing of a launch can all seriously impact how the public perceives the ‘need’ for a product. If a product is viewed as a ‘nice to have’ as opposed to an item or service they ‘can’t live without’ can be the difference between a market disrupter and a flop.
What are the pain points?
Understanding the problem intimately, that you are trying to solve, is essential. By asking the right research questions you are able to determine the true ‘pain points’ effecting the consumer. By painting a picture of these and how easily your product or service manages or removes them will cement your ‘great idea’ as a must have item.
Perception is everything.
The recent clamour for the Prime drink, so deftly marketed by YouTube influencers KSI and Logan Paul, illustrates the power of marketing perception. Using their fan base, they were able to make a drink with no real competitive advantage to the market explode in popularity. The perfect marketing storm was created by influencing the belief that drinking this product would enable their young followers to be successful like them. By restricting the supply, they then enhanced demand resulting in the product selling for a ridiculously inflated price. The perception was ‘I must have it’ and just getting one was an achievement in itself.
The reality is that launching a new product takes time to create a following. The money to sustain advertising can be poured into a ‘bottomless pit’ if you don’t understand how your product is viewed in the eyes of your consumers.
New products rarely remain as they were first conceived, because they have to adapt to better suit the requirements of their market. How will you know what that is if you don’t continually ask?
At what cost?
Products that are time consuming and expensive to produce must be able to justify their high price tag. Is your product like this to be sold at a high price with a low volume of sales or a low price to a mass market. If a niche of the population is able to afford your product and see it as a luxury item then you have a targeted marketing strategy.
Ferrari, Rolex and Gucci are all products that exist under less expensive brands such as Ford, Casio and Matalan. The latter rely on the populations need for practical transport, timekeeping and clothing. Whereas the more luxurious ranges have carefully crafted brand awareness that play on the need of the wealthy to reward their success with items very few can afford.
Who are your competitors?
Knowing who your competitors are allows you to ‘head off’ potential threats to the sustainability of what you offer. If a competitor has the ability to quickly copy your product and deliver it to one of their existing markets quicker than you (which is highly likely if they are more established) what protects you? Can you gain a patent, trademark or some form of intellectual property rights that protects your unique selling point? Once you are established, competitors may release updates to their products or use marketing discounts that you will have to counter, in order to maintain your market position.
What other threats exist?
Seasonal market conditions have to be accounted for. Shorts don’t sell as well in winter and how fast can toboggans be produced if the big freeze does come? What can you do to mitigate the risk of your product having a bad UK season (Potential markets abroad and internet sales).
The current conflict between Russia and Ukraine has seen energy prices soar. Leisure centre and floodlit football pitches have seen their overheads rise by an unsustainable 30%. If you can research your potential threats – you can develop strategies to avoid, overcome or ride them out. Successful businesses know how to endure by doing their homework.
Are you better trying to partner up with somebody that is already established in that market. Established businesses already have a following and nurtured a trust with their customers. If they present you as the ‘genuine article’ a potential barrier to sale is already removed.
Gaining a partner’s trust isn’t easy. You need to have a good idea of what they will want from you (% of each sale – shares in your company) and clearly illustrate your projected forecasts for the next three to five years.
Where do I begin with my research?
Starting out can seem like a vast landscape of the unknown. However, are there companies that offer a similar product or service in a different industry or sector that are unaffected by your concept. Finding relevant people in those organisations through Linkedin is a targeted way to start. If just one person is willing to give you their story of ‘starting out’ - a blueprint can quickly be formed of what you need to do, or avoid.
Is research worth the spend?
Research is your blueprint to the future. Even if your research costs an initial ‘eye watering’ number and the conclusion is not to go head, you can be sure that you would probably lose much more at a later stage.
However, a detailed analysis that clearly indicates your market, allows you to develop a strategy for entry, whilst avoiding threats and solving your customer’s ‘pain points’ is a great foundation to build upon.
Statistics reinforce and illustrate our message.
As Tom Cruise’s character states in the courtroom drama
‘A Few Good Men’ - “It doesn’t matter what I think, it only matters what I can prove”.
1 in 5 businesses fail in their first year, rising to 60% in the first three. A major factor of this is poor cashflow due to late or non-payments by their customers. Make sure you mitigate this risk by doing your research on how Kiistone can help you avoid this. www.kiistone.co.uk
Research should be a continuous process for any business wishing to learn and adapt to changing times.