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market research for a startup company
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Market research
next big thing?
consumer
competitors
analysis
Market research
next big thing?
consumer
competitors
analysis
Looking for the gap in the market…
We have an original idea
It does not exist yet
The competitors don’t have it
So…
A gap in the market?
Looking for a gap in the market…
When a product does not exist yet…
there may sometimes be a good reason…
there is no need for it
Innovation = Risky Business
For companies, innovation is a driving force for growth but…
Innovation is also a risky enterprise:
90% of the new consumer products are a failure
30% of the new industrial products fail at the launch
Top or flop?
Top or flop?
Top or flop?
Top or flop?
Top or flop?
Top or flop?
Top or flop?
Looking for the gap in the market…
The market
offer does not exist yet
demand there is a need for it
Introductory Terms
Key factors for the introduction of new products:
Meticulous study of the needs of the customer
Involve future customers in the development process
Provide commitment and support at the design phase
to the highest possible extent
Make and reserve sufficient resources for the market
introduction
Introductory Terms
Market segment Market niche
A large part of the market:
potential buyers who have
similar needs, wishes, value
perception and purchase
behaviour
e.g. car buyers with a high
income
A smaller specialized formed
segment
e.g. performing sports cars
Content
next big thing?
consumer
competitors
analysis
desk research
newspapers
magazines
trendwatchers
field research
quant.
qual.
Analysis of the market: demand side
Field research: testing product concepts
Concept testing
testing the idea in the market, amongst consumers
Product concept
description of the product on paper, on video, in the form of a model…
development of the idea, without actually manufacturing the product
How to test?
Product concept is presented to a group of consumers taken from the target market
Comprehensibility?
Credibility?
Attractiveness?
Positive/negative points?
Where would you buy it?
What can it cost?
Purchase intention?
…
Two ways
Qualitatively Quantitatively
Limited group of respondents: in-depth interview, focus group
Insight in positive and negative points, motivations
…
Extended, representative random test
Quantitative appraisal of interest, purchase intention
In-depth interview (qualitatively)
Conversation interviewer - respondent
Unstructured:
No standard questions list
Interviewing guide: checklist with themes
Probing questions:
Further questioning, asking for more explanation
Other angle of incidence
Including non-verbal communication
Observation: one-way mirror, video
Focus groups (qualitatively ) = “In-depth interview in group” Cheaper than in-depth interviews Interaction between group members--> new ideas
Unstructured: No standard questions list Interviewing guide: checklist with themes- see e.g. Leho
Important: composition of the group Group size: 6-12 members Sufficient number of eloquent members Not too homogeneous --> few discussions Not too heterogeneous --> quarrels No people who know each other --> inhibitions
Focus groups
Important role of moderator:
Steer the conversation in the right direction
Not impose own opinion
Follow themes list
Weaken dominant figures, stimulate silent figures
Create a relaxed atmosphere
Including non-verbal communication
Observation: one-way mirror, video
Example: check you tube: ‘focus groups’
“We have put a survey online and already 100 people have responded!”
Who has responded?
Are these people representative for your target group?
Size is not everything! ;-)
Tip 1: question the right people1. Define the target group for your concept (= population)
Business to business?
Which business?
which is the Decision Making Unit (DMU)?
E.g. IT purchase managers of Flemish SMEs
Business to consumer?
What kind of consumers?
E.g. Flemish seniors between 65 and 80
2. Of these, question a representative random test
= with the same composition as population for important characteristics
A question from the concept test:
Do your think this product is interesting?
1. Yes
2. No
A question from the concept test: Q1 To what extent do you think this <product> is interesting?
1. Very interesting go to Q2 2. Interesting go to Q2 3. Not really interesting go to Q3 4. Not interesting at all go to Q3
Q2. Why do you think the proposal is interesting? ENQ. Good further questioning, do not make suggestions, note
everything literally ………………………………………………………………………………………………………………
………………………………………….... V3. Why don’t you find the product interesting? ENQ. Good furhter questioning, do not make suggest, note everything
literally ……………………………………………………………………………………………
A question from the concept test:
Would you buy this product?
1. Yes
2. No
A question from the concept test:
How likely is it that you would buy this product?
1. Certainly
2. Probably
3. Maybe, maybe not
4. Probably not
5. Certainly not
Tip 2: ask the right questions Sufficient nuance (see previous slides)
Relevant “Do you like Brussels sprouts?”
Simple “Do you sometimes visit Facebook or LinkedIN?”
Unequivocal “Are you a heavy internet user?”
Simple “Do you sometimes visit sites with user-generated content?”
Concrete “To what extent are you durable in your daily behaviour?”
Neutral “Do you find our services also as good?”
Free online surveys:
http://nl.surveymonkey.com/
http://www.enquetemaken.be/
http://www.thesistools.com/
To do: concept test
• Describe the concept of your product / service (what?)
• Describe your target group (for whom?)
• Small-scale test of your concept with the target group, qualitatively or quantitatively
Market research
next big thing?
consumer
competitors
analysis
desk research google
newspapers
magazines
trendwatchers
field research quant.
qual.
use ‘students’
Analysis of the market: offer side
Informatiebronnen (vervolg) NIS (nationaal instituut voor statistiek)
http://statbel.fgov.be
ECODATA
http://ecodata.mineco.fgov.be
Nederlandse kamer van koophandel voor België in Luxenburg
http://www.nkvk.be/
www.trendstop.be
Market evolution Technological, Economic, Values and Norms
21%
25%
7%
18%
29% concurrent A
concurrent B
concurrent C
concurrent D
concurrent E
Market share of the competition
Portfolio of the competitors
Company name/ address / location / contact details
Products
Active on the following markets: …
Evolution
Differentiators (how do they distinguish themselves)
Target groups
What does the company stand for/ image
Turnover, profit/loss figures,…
…
Information sources Private sources
Non-profit organizations
Professional organizations
Voka (www.voka.be)
Members organizations (consumers, fan clubs,…)
…
Profit-oriented organizations
Salesmen (manufacturers, suppliers,…)
Catalogues, samples, test data,…
Consultants
Business contacts
…
Information sources (continued) NIS (national institute of statistics)
http://statbel.fgov.be
ECODATA
http://ecodata.mineco.fgov.be
Nederlandse kamer van koophandel for Belgium in Luxemburg
http://www.nkvk.be/
www.trendstop.be
Information sources
Patents Delphion Intellectual Property Network
http://www.delphion.com
US Patent and Trademark Office
http://www.uspto.gov
European patent office
http://www.european-patent-office.org
www.espacenet.com
Financial information
blueberry hill Kortrijk
www.ondernemingsnummers.be
address
employees
statues ( www.staatsblad.be)
balance (www.nbb.be)
Blueberry- hill
also financial information
Blueberry-Hill
Gouden Gids: quick & easy
5 forces Porter
Suppliers Bargaining power
Few suppliers
No substitute products available
High overflow costs
…
Approach by Partnership
Supplier takeover
Making the supplier more dependent
Knowledge of the costs and methods of the supplier
…
Customers Dangers
The customer knows the production costs
The product is not of strategic importance to the customer
Customers can make the product themselves
Product is undifferentiated -> can be substituted
Approach by
Increasing loyalty
Increasing added value and inducement to buy
Lead away the purchase decision from the price
As little intermediate channels as possible
New entrants
Dangers
Depends on the accession barriers
Economies of scale (minimum size)
High initial start-up/investment costs
Loyalty of customers to the brand
Distribution channels already checked
Patents
Legislation
…
Substitutes
Dangers
Depend on:
Loyalty of the customer towards the product
New trends
The relative price new existing product
Transition costs for the customer
…
Competition
Dangers
Dangers are high in case of
Many players with the same size
Players with the same strategy
Little differentiation
Small market growth
…
Market research
next big thing?
consumer
competitors
analysis
Analysis
feature analysis
positioning map
SWOT
Feature analysis
Frequently heard with starters
Our product is much better than the one of the competition
Our product can do a lot more than the one of the competition
Our product is different from the one of the competition
We don’t have any competitors
…
Feature analysis
Feature 7
Feature 6
Feature 5
Feature 4
Feature 3
Feature 2
Feature 1
Own productProduct DProduct CProduct BProduct A
Competing products
Test-Aankoop
Feature analysis
Example: event agency
Feature Comp. A Comp. B Comp. C Ourcompany
Teambuilding X X X
Quests X
Concerts X
Cultural events X X
Parties X
Feature analysis
Example: hotel
Feature Comp. A Comp. B Comp. C Ourcompany
Central location X X
Free WiFi X X
Soundproof rooms X X
Swimming pool X X
Roomservice X X X
Shuttle service X
Air conditioning X X X X
Skyroom X
Positioning map
Positioning map: multiple dimensions
Positioning map
Positioning map
Importance of USP and Differentiation Distinguish oneself from the competition by means of:
Product attributes, price, extra service, quality,…
Positioning for specific use
Distinguish for typical user
Distinguish by product class
The right strategy
To put the right product in the marketplace(useful, added value,…)
To put the product in the right way in the marketplace
red ocean blue seastrategy strategy
Common mistakes More focus on characteristics of the products than on the
benefits for the customer.
Underestimate the importance of FOCUS: sell a specific product to a specific target group.
Unclear product definition (my product can do EVERYTHING and is good for EVERYONE)?
Assume that the product sells itself.
Too broad a target market.
SWOT analysis
Strengths
Weaknesses
Opportunities
Threats
SWOT analysis
Nam
e:O
wn
com
pan
yo
rco
mp
etitor
Strenghts Weaknesses
High technological knowledge
Well-known brand
Supplies very high quality
Makes big innovative efforts
Long history of good products
Money reserves available for large investments
Extensive network of distributors
Rusted company hierarchy
Company location
Low flexibility of the production process
Large time-to-market
Already had to throw away many innovative
ideas
….
Opportunities Threats
New markets appreciate the technology
New trends
Takeover
Changing customer values and norms
Fastly increasing competition
Changing laws
Rise of low-wage countries
Market research
next big thing?
consumer
competitors
analysis
to do
Assignment
• Definition of target group
• Evolution of the market
• Portfolio of the competitors
• SWOT analysis (SWOT of yourselves + SWOT of the competitors)
• Feature analysis
• Positioning Map
• Risk analysis(Suppliers, Customers, Newcomers, Substitute products, Competitors)
So let’s get started
