Conducting research to estimate the market potential of a new product or venture
After several years in business, you’re thinking about expanding your operation by adding a new product, growing more of what you’re already producing, or moving into a totally different line of products.
Expanding your operation requires some market research. Though it may sound intimidating, it simply means gathering information, making observations, and analyzing what you learn to create forecasts. This research will help you avoid costly mistakes and make better decisions by creating a roadmap that will take you beyond guessing or speculating about sales.
Some key questions we’ll address include:
- Who are your potential customers?
- How far are they willing to travel?
- What do they want and why?
- How much will they buy?
- What price are customers willing to pay?
- How and through what outlets will you distribute your products?
- Who are your competitors?
- Why would customers choose your products over those of another business?
Other marketing questions you’ll need to consider:
- What is the typical marketing season?
- How familiar are customers with the product and services you’re offering?
- How much will it cost to produce the product?
- What are the market regulations and rules?
- What risks do you face with a new product?
Hiring someone outside your business to conduct your market research could prove very expensive. Why not rely on yourself? As a business owner, you know your business, short- and long-term goals, family’s needs and available resources better than anyone else. You may already have “tested the water” for a new product or outlet.
We’ve designed this publication as a practical, common-sense guide to help you move step-by-step through the process of conducting your own market research. The aim is for you to estimate that portion of the market you may reasonably capture. What sales can you expect from a business expansion, change in market outlet, or shift in products?
So, take a deep breath, roll up your sleeves, and dive right in.