Conducting Simple Market Research Saves Time And Money

Stepping into product creation and production is the goal of many entrepreneurs. When you have an idea, the next natural impulse is to turn the idea into form but there are several other stages of the process you may want to go through first before you invest too much time and resources into actually producing the product. Without some testing and market research, you may find yourself continually going back to the drawing board to make a product that will actually sell. You may not have the resources available to conduct more thorough research but here are a few testing strategies you can use to get market validation for your product or service whether you’ve invented a widget or you’re a consultant with a process to offer. When you’ve gotten a YES in these areas, then you’ll know it’s time to proceed to the next step.

1. Talk to your customers AND end users. These two groups are not the same and usually represent the retail buyer and their customer or your distributor and the person who buys from them. For instance, you may interview Home Depot customers who would buy your product if it was available but if the store’s buyer doesn’t get it, he won’t place an order from you. This also applies to online marketing when you’re working with affiliates. You want buy-in from BOTH groups.

2. Know where your product will sell first. Your product may look different on a store shelf, selling online, selling in Costco or bundled with another product. Discover which distribution channel will be most lucrative for you first and then make a product that will suit that channel. I knew someone that invested his first round of capital developing a product for Lowe’s Home Improvement only to find that the packaging was totally inappropriate and the buyers weren’t interested in carrying the product but he hadn’t taken the time to discuss it with them. It would have been better suited as a direct response product and sold via infomercial to start.


3. Test your price points. Karen Neuberger makes a famous line of loungewear for women. Her primary market is high-end Nordstrom’s but her outfits also sell in lower-end Marshalls stores. Even though the products may look very similar, there are very distinct quality differences between the two. The quality of the product made is a reflection of the price point that is most suitable for that particular market.


4. Pre-sell whenever possible. There is nothing that provides validation as much as early traction—knowing there are people willing to pay for your product. You can pre-sell by selling small orders or pre-sell the idea and then make the product later.

5. Be sure you can fulfill orders in a reasonable time and with minimum cost . You may have a great idea but the costs related to getting the product to the customer are greater then any demand would be so it may not make sense to even produce or promise the product. This is also true of a service when your time is involved. Regardless, make sure you know you can deliver on your promise before you commit to producing your product. For instance, think of the logistics and resources involved for FedEx or Super Shuttle Transportation to deliver on their brand promises of rapid transportation. A dentist who promises rapid response for walk-ins and then is faced with 500 new patients walking through the door will need to rethink his/her fulfillment and distribution model.

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