Avoiding Costly Mistakes with Research

September 5, 2012By Brand Marketing, Views

by Dave Wendland, as seen in OTC National

July 17, 2012

You have a new and exciting opportunity afoot: selling to a new target market, introducing a new product or considering new distribution channels domestically or abroad. But questions abound.

  • What’s the revenue potential and how much market share can you gain?
  • How do consumers shop for this type of product in this channel?
  • What do consumers consider to be key features and benefits?
  • What price point are they willing to pay?
  • What is the full extent of the opportunities this new venture can generate?

If you don’t already have the answers to all of these questions, look to market research. There are companies that regularly review trends, growth opportunities, and the state of the industry and issue market research reports with this information for purchase. Generally, these reports are great for a broad-brush of the big picture and are most useful when you need facts and figures to support where the industry is headed. For more specific insights into your particular opportunity, primary research is the best choice.

Primary market research consists of techniques such as:

  • Quantitative surveys
  • Focus groups – moderated in-person
  • Online interaction with pre-screened shoppers

You can use quantitative surveys – short answer or multiple choice questions – to get a quick read on how consumers feel about a product. Ask consumers what size, shape, and flavor they prefer. Find out what their perception of value is when it comes to your type of product – is it choice of sizes or form, convenience of dose, length of effectiveness? Test packaging and price points. If they are currently buying a competing product, where does it fall short?

You can also take the opportunity to find out shopping preferences, such as do they shop online, or using their mobile phone? Do they take advantage of coupons or other special offers? What about future line extensions? Ask questions to find out if there are opportunities for other complimentary products to be developed.

You can use focus groups to ask these types of questions as well, but because focus groups are interactive it allows you to ask probing follow-up questions to delve into answers and clarify perceptions on the spot. In-person focus groups remain one of the most meaningful ways to test packaging and product prototypes. Giving consumers the opportunity to touch, see, and even try a new product often provides concrete answers to whether you’re on the right track or not.

Online focus groups and bulletin boards are two other terrific ways to interact directly with consumers and ask pointed and specific questions, especially if it’s a new channel for your company. If they are purchasing a competitor’s product you can find out what they like about it and why. You can ask questions about merchandising – did they shop this department because it is adjacent to a particular department? Was it easy to find the product they were shopping for on the shelf? Virtual representations of the aisles and shelves can be displayed for consumer comments about their navigation and overall ease of shopping.

Market research is a worthwhile expense because it saves money in the long run and prevents costly mistakes. Finding out with some certainty about consumer preferences, unique attributes of a new channel, or revenue potential and the opportunity for further expansion, can help plan for success.

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