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Marketing Strategies: Are You Making This Marketing Mistake?

In order to ensure that the new products and services they launch stand the best possible chance for success, Corporate America employs a variety of marketing research techniques before investing time and resources in development. A little basic smarts and network know-how will allow you to do the same thing for yourself.

In this article, I'll show you how you use powerful market research tools to save you time, money, frustration and maybe even ultimately your business. So let's get started.

Once you have a clear idea in mind for your new product or service, you'll want to do what Corporate America commonly calls a concept test.

First of all, you'll need to sit down and clearly delineate exactly what your product or service is, including what features and benefits it will offer and how much it will cost. Typically, you'll write 2-3 paragraphs describing your idea, making sure to clearly explain the benefits to the consumer. Really invest some time here and have other people read your description to make sure, A) your word choices are clear and, B) you've hit all the major highlights.

Congratulations! You now have a concept statement.

Next, develop a survey to gauge the reaction of your target market, covering the basics:

- Purchase interest (i.e., How likely are you to buy this product, if it were available to you? A) Definitely will buy, B) Probably will, C) I might, D) Probably will not, E) Definitely will not buy.)
- Overall Likes and Dislikes
- Value
- Uniqueness

Make sure you include a range of possible responses for each question.

From here, you'll need to determine exactly what the target market is for your new product or service - if your product is a new all-natural diet soda, for example, your target market might be health-conscious women, ages 20-45.

Talk with friends, family, and friends-of-friends, as well as those of your employees. Anywhere from 50-200 people will work. Giving respondents an anonymous way to return your survey will help to ensure unbiased feedback.

When your surveys have been returned, decide what your minimum requirements will be in order to take the next step. (Do this even before you take a peek at your data.) Large corporations call this an action standard.

As a small business owner, an action standard that makes sense would probably be how many people are likely to buy your product.

The rule of thumb some professional marketing research firms use to gauge true demand is that 80% of the people who answered that they would 'definitely purchase' your product actually will - while only 20% of those who answered they 'probably will purchase' will do the same.

Using this rule of thumb, let's say your data shows true demand of 20%. Now you have to take into account the role of advertising and exposure.

Let's say there are 10 million potential customers in your market, but you're advertising on a shoestring. With the budget you've got, how many people can you make aware of your product? Five percent? That means 50,000 people will become aware of your product. With 20% true demand, you might expect 10,000 buyers.

So - is 10,000 buyers enough to make your new product viable?

If not, it's time to go back to the drawing board, using the feedback you received to strengthen your overall concept.

If so, it's time to move confidently ahead - knowing the market is with you.

Seed Newsvine

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