Submitted by Don Doman
One of my favorite television shows (reruns) is King of Queens. A married couple, Doug and Carrie, are the main characters. They are selfish and self-centered. After being rejected at a number of job interviews, Carrie becomes depressed and tries to find herself. She has great plans to read more, learn more, and do more. She also plans to start her own business. Doug is supportive.
After weeks of staying home, she realizes that she’s read nothing, learned nothing and done nothing. She swings into action and starts her own business. She wants to design, manufacture, and market personalized cell phone covers. She hires her father and one of his cronies to decorate the cell phone covers. What she doesn’t do is conduct any market research. She’s doomed.Basic Market Research Question: Is there enough interest in your new product?
Carrie invites friends, associates, Doug’s co-workers, and neighbors to her home. With virtually no preamble she launches into a sales presentation. When no one volunteers to buy, she starts assigning phones. She overcomes every objection, but not well.
One friend complains that $49.00 is too much for a phone cover. Carrie responds that he needs to protect his investment. He replies, “The phone was free.” Another “sale” has the objection that his phone is a PDA and won’t fit Carrie’s stock size. She ignores him and crams the PDA into the cell phone cover. With the pressure of the small cover, the phone begins placing a call. When he complains, Carries cracks that he needs new friends anyway.Basic Market Research Question: Can you make a profit from what people are willing to pay for your product or service.
As her sales party dissolves in shambles, Carrie faces reality. She’s worse off than before. She’s lost money, she’s wasted time, and her support base of friends and neighbors may never speak to her again. Carrie should have conducted market research. She could have had the same party, but used it as a focus group BEFORE any money was spent and time wasted. She could have presented her idea and then written down her group’s responses and then she could have used her friends for a brainstorm of ideas. She might have found out right then that her idea wouldn’t work, but she also might have discovered other ideas that would fill needs and produce a profit.
On the TV shows Dragon’s Den and Shark Tank super rich entrepreneurs view pitches seeking investments. The savvy investors question if the product or service being hyped solves a problem . . . or if there is really a problem in the first place. Contestants had best be prepared with market research answers.
Market research is like investing pennies on the dollar. The basic question is: Are there enough people looking for what you have to offer? Second basic question: Can you make a profit based on what people are willing to pay? Those two questions alone can save you time and money. With just a few more questions you might be able to find additional avenues for business that you may have missed when you first came up with your product or service. Market research doesn’t cost, it saves . . . time, money, and friends.