Market Research: Is There a Profitable Market for Your Idea?

It’s no secret that the key to a successful product invention is a great idea. But what if you don’t know what people want? How do you know if there’s a profitable market for your idea? And more importantly, how do you find out what people want?

You may have a great idea for a product, but is there a market for it? Start-ups have burned and crashed because they didn’t know what the market needed. Before you invest time and money into your idea, you need to do some market research to find out if there’s a profitable market for your product. Without it, you could be wasting your time – and your investors’ money – on something the market doesn’t even want.

Inventors are often so excited about the product that they focus solely on product development. How to get a working product. But what is then overlooked is first confirming the product-market fit. There may be people who would love your product. But are there enough people and would they be willing to buy at the price that you would aim to produce the product for?

You may have millions of people who would buy it if it cost less than $100. But if it cost $1000 there may not be a single potential customer. The product may still be a possible winner. But only if targeted at businesses for a higher price point. Before running off down the road of product development some basic checks with designers, engineers, manufacturers and some market research will allow you to make sure you are developing in the right direction.

Before getting started on market research, let’s first have some insight into why an idea fails. So that you can ensure your idea is not the next one to fail.

Why Do Product Ideas Fail?

There are many reasons why product ideas can fail, but some of the most common include a lack of feasibility from either a technical engineering or manufacturing standpoint, poor project execution, and inadequate market research meaning that product development heads off in the wrong direction. To succeed, it is important to have a well-thought-out plan that takes all of these factors into account. Additionally, it is also essential to be able to adapt and pivot, when necessary, to stay ahead of the competition with decisions based on solid market information. Here’s a list of common reasons for a business idea or product design to fail:

• Not the right time for that business idea
• The market chosen is not the right one for the product
• Not enough potential customers for your idea
• The price point chosen doesn´t fit the manufacturing methods available
• Lack of appropriate business model for your business ideas (B2B, B2C, owner & manufacturer, licence, exporter etc)
• Lack of planning and poor project execution
• Not enough passion or commitment from team members
• Poor marketing, messaging and sales
• Funding issues

But one of the primary reasons that ideas fail is because there is no profitable market for the product. Before you invest time and money into developing your idea, it’s important to first do your research and determine if there is indeed a market for your concept.

Even then…

There may be a market for your product idea. But is there a feasible product for your market?

What Is Market Research?

Market research is the process of gathering and analysing information about consumers, businesses, and the potential marketplace in general. It can be used to assess customer satisfaction, understand customer needs and wants, track marketing campaigns, and even measure market trends. Market research can be conducted in-house or through third-party companies that specialize in gathering and analysing data.

In-house (primary) market research is typically conducted by businesses themselves, using their resources. In the age of the internet, your free google searches can often provide market research information far better than could have been provided by a professional researcher before search engines existed.

This type of market research can be more cost-effective and timelier than outsourcing, but it may not be as comprehensive. Third-party (secondary) market research firms usually have more extensive experience and resources, which can give them an advantage in terms of data collection and analysis.

If the business owner or inventor has good technical knowledge of the product and its potential market, they can often carry out sufficient market research themselves. If this is a new or highly specialised territory, however, then getting third-party help may be the best call.

Analyse If Your Idea is Product-Market Fit

A product market fit is when a product satisfies a market demand. It’s achieving product-market alignment. This means that your product meets the needs of your target market and that there is a fit between what your product does and what your target market wants or needs, all within a feasible price range.

There are four main criteria for achieving product-market fit:

1. Your product solves a problem that your target market has.

2. Your target market is aware of the problem and is actively seeking a solution.

3. Your target market believes that your product is the best solution to the problem.

4. There is enough demand for your product in the market to make it economically viable.

Note that there are rare exceptions to this when product ideas meet requirements the market wasn’t yet aware of. In these cases, a product has the chance to enter a blue ocean market, sailing far from the direct competition and can set its own rules in a market it builds for itself.

With modern interrupt marketing in social media, this is now within reach of all businesses like never before in human history.

To achieve product-market fit, you need to understand your target market and what needs or problems they have. If moving into a competitive market, you also need to develop a product that meets those needs and is superior to any other solution that is currently available.

Once you have confirmed a product-market fit, you can then focus on developing, engineering and manufacturing the product, with an eye on your chosen exit strategy. Whether that exit is licencing your patent or intellectual property, selling off the idea of taking it through to production, sales and distribution with you at the helm of your brand.

Market Research Methods

Market research is essential for any new business venture. It is the process of understanding the needs and wants of your target market, as well as identifying market segments and numbers of potential customers.

It can be costly and time-consuming to conduct market research, but it’s worth it to ensure that your idea has a chance of succeeding. It can be far more costly to go in the wrong direction spending on development aimed at an unprofitable market.

Here’s how to research whether there’s a profitable market for your product idea:

Define Your Target Market

Who are the people most likely to buy what you’re selling? Be as specific as possible when defining your target market. This will make it easier to find them when you’re conducting your market research.

Research Your Target Market’s Needs and Wants

What do your potential customers need or want that your product or service can provide? This is an important question to answer, as it will help you determine whether there’s a demand for what you’re selling.

Find Out Where Your Target Market Hangs Out.

Where do your potential customers spend their time? This will help you determine the best way to reach them with your marketing message. These days, it can be online groups and publications to which you can get quick access.

Surveys

There are a few different ways to go about conducting surveys. You can hire a professional market research firm to design and administer your survey for you. This option can be expensive, but it takes the guesswork out of the process and gives you access to a wide pool of potential respondents.

Another option is to use an online survey tool like SurveyMonkey or Google Forms to create and administer your survey. This option is less expensive but requires a bit more work on your part.

If you’re on a tight budget, you can also consider conducting in-person surveys. This option is the most labour-intensive but can be very effective if done correctly.

Interviews With Members from Target Market

When it comes to market research, interviews are one of the most effective ways to collect primary data. You can use interviews to learn about your target market’s needs, wants, and interests. Additionally, interviews allow you to get feedback about your business idea from potential customers.

To conduct an interview, you will first need to develop a list of questions to ask your target market. When developing your questions, you should keep them open-ended so that respondents can share their thoughts and feelings freely. Additionally, you will want to avoid leading questions that could bias the results of your research.

Once you have developed your list of questions, you will need to identify potential interviewees. When selecting interviewees, it is important to choose individuals who are representative of your target market. Additionally, you should try to select interviewees who have had experience with similar products or services.

Focus Groups

A focus group is a small, but representative, sample of your target market that you gather together to get feedback and gauge reaction to your product or service.

Qualitative research, like focus groups, helps you understand the wants, needs, and motivations of your target market. It also allows you to get feedback on your product or service idea.

Quantitative research, on the other hand, measures the size of the opportunity. It tells you how many potential customers there are and how much they are willing to pay for your product or service.

You can use a combination of both qualitative and quantitative research to get a well-rounded view of your market opportunity.

Customer Observation Session

You can learn a lot about your potential customers by observing them in their natural habitat. This involves going to where they are and watching them as they interact with products or services similar to what you’re offering.

You can do this by hanging out at relevant businesses, visiting trade shows or conventions related to your industry, or even conducting online research.

Social Media Round Up

In the past decade, social media has taken the world by storm. We’ve seen a major shift in how people communicate and connect with each other. This change has had a major impact on businesses, which now use social media to reach out to potential customers in a way that was previously impossible.

As a result, market research is now essential for any business that wants to succeed in the social media age. By understanding how social media is used, businesses can tap into lucrative markets and connect with customers in a way that was previously impossible.

Some of the ways businesses are using social media for market research are:

Listening to social media conversations: There is a wealth of information to be gleaned from social media conversations. By listening in on these conversations, businesses can understand what people say about their industry, competitors, and brand. This information can be used to make strategic decisions about marketing, product development, and customer service.

Building relationships with customers and potential customers: Social media provides an excellent opportunity for businesses to build relationships with their customers and potential customers. By engaging with people on social media, businesses can create a connection with their audience and get valuable feedback about their products and services.

Field Trials and Testings

Market research doesn’t stop once you´ve started product development. At each important stage in the product development process, you can always circle back around and get more market feedback to make sure you are on the right track.

Don’t think this is just for big companies either! You may be a one-man band, but getting a first prototype made or confirming the cost of manufacture are both important project milestones that can let you check back with potential customers to confirm that you are on track.

After you have your product pretty well developed, it’s time to put it in front of potential customers to see if they’ll actually buy it. This process is called market testing and there are a few different ways to go about it.

One common way is to set up a simple website and offer your product or service for sale. You can also offer it for free in exchange for feedback. This is a good way to gauge interest and get some initial feedback, but it’s not a very scientific approach.

Another option is to do a field trial, where you go out and find people who might be interested in your product or service and offer it to them for a reduced price or for free in exchange for their feedback. This is a more scientific approach, but it can be more time-consuming and expensive.

The third option is to do a beta test, which is basically a trial run of your product or service with a limited number of users before you launch it to the general public. This is the most scientific approach, but it’s also the most expensive and time-consuming.

No matter which method you choose, market testing is an important step in developing your business idea and making sure there’s a profitable market for it.

Analyse the Data on the Hand

There are a number of different ways to collect market research data. You can use surveys, interviews, focus groups, and even just observe people in your target market. But once you have this data, you’ll need to analyse it to look for trends and patterns.

One way to do this is to create a Flow Diagram. This is a visual representation of how people move through your target market. You can use this to identify where people are getting stuck and what needs to be improved.

Another way to analyse your data is to create an Affinity Diagram. This is a graphical way of representing customer relationships. It can help you identify which customer segments are most valuable and where there are opportunities for cross-selling.

Finally, you can create a Customer Journey Map. This is a visualization of the different steps that a customer takes when they interact with your business. It can help you identify pain points and areas where you can improve the customer experience.

Once you’ve collected and analysed your data, you’ll be able to answer the question of whether there is a profitable market for your idea. If there is, then you can start planning your business. If not, then you’ll need to either modify your idea or find a new market.

No matter what the results of your market research are, always remember to stay flexible. The market is always changing, so you’ll need to be able to adapt your business to keep up with the times.

Learn How to Perform Market Research for Your Product Idea

As a product developer, one of your most important tasks is to ensure that there is a market for your product idea. After all, what’s the point of designing and developing a product that nobody will buy?

Conducting market research is the best way to find out whether there is a profitable market for your product idea. But many product design consultancies and industrial design engineering consultancies can easily cost between $20,000 to $200,000 to take a product idea through to a full technical design. Some such companies may know from professional experience that a product is not feasible. But if they are unscrupulous, they may start work on the project and spend your money anyway. 

So how do you find good consultants to work with or if you are on a tight budget how do you carry out some of the market research yourself?  Doing it yourself or at least knowing enough to know how to successfully hire and work with engineers and consultants can save time and money.

Invention Garden can help you understand and learn the fundamentals of market research. We have designed a detailed course and can offer cost-effective consulting that will show you how to assess whether there is a market for your product idea, and if so, what the size of that market is.

We’ll start with an overview of the potential market and who would be buying and using the product. This is important because it will help you to assess whether there is a market for your product idea, and if so, what the size of that market is.

Next, we’ll help you look at and analyse the market gap for your product.

This is important because you need to know if there is a market in the gap for your product. If not, then your product idea may not be viable.

After that, we’ll move on to market product requirements. This is important because you need to know what the market wants and needs from a product like yours. Only then can you assess whether your product idea is likely to be successful.

Then, we’ll help you identify routes to market. This is important because you need to know how you’re going to get your product to market. There’s no point in developing a product if you don’t have a way of getting it to the people who want to buy it.

Get in touch with us if you want to know more about market research. We are regularly releasing seats for access to our training groups and courses and we would be happy to have you onboard!