Strategic Planning: Research New Markets
Good market research ensures that you don’t spend a lot of time and money on strategic plans and marketing campaigns that customers don’t jibe with or new products that they won’t pay for. To be effective, organizations need good information about their customers’ needs, wants, and characteristics. Generally, if the result of your decision impacts the customer, ask the customer for input into your decision before you make it.
Market research is an entire discipline, which is too overwhelming to cover in depth here. Instead, this section focuses on how to conduct market research for the purpose of making strategic decisions about which target markets to enter. Those markets result in actions within your strategic plan.
Before beginning any research effort, clearly state your information needs. Undoubtedly, some holes and unknowns about new markets you want to pursue may exist, but you also want to have a better idea of how attractive the potential target market is and whether it identifies with the need you’re trying to solve. Ask yourself the following questions about each market you’re considering:
What market are we trying to serve? How big is our market in terms of number of customers, units sold, or dollar volume?
Are there obvious segments in our market?
What are the overall trends and developments in our industry?
What is the rate of market growth or shrinkage over time? Are there any differences in market growth by time of year?
How big are our competitors? What companies have what portions of the market?
What products or services do our competitors offer? How do they differ from ours?
How does competitors’ pricing compare with ours?
What marketing strategies and tactics does the competition use and to what degree of success?
What are the key factors for success in the market we’re trying to serve? Are there any specific media outlets that reach this market directly?
How do customers perceive the problem the offering is intended to solve? How serious do they believe the problem is? What benefits of the proposed offering would be of most importance to them?
How do customers solve the problem today?
What costs do customers incur now to solve the problem?
The list is pretty long, but don’t feel overwhelmed. You and your team don’t need to answer all these questions. Just focus on the following key steps in processing your answers:
Use the preceding questions to help you identify what specific information you need about potential new markets.
Clearly state these needs in one or two objectives.
Use these objectives to guide your research efforts.
If the information you locate doesn’t achieve the stated objectives, file that info somewhere else or delete it.