Our planet is overflowing with projects, each as innovative as the last. Over 1,600 patents applications are submitted in France every year according to INPI’s 2016 records. Some of them have great potential that will make them a certain success, whilst many others find no markets and languish in bottom drawers.
Knowing that an innovation has no real value until it finds its market, it is thus essential to discover any real potential markets by carrying out market research to confirm or discount a project’s potential and dispel any uncertainty.
For budget reasons, you’ll likely be tempted to carry out the market research yourself without using any specialist tools. There are however many disadvantages to this method that could impact the performance of your market research and thus its results.
What is a market research study?
A market research study enables you to collect information on your target markets and better understand how the market actors you aim to sell to react to your value proposition.
Yes, the term “market research study” can be impressive or perhaps a little scary, but it’s completely justified and relevant if you want your innovation to find the right market.
Remember that nearly 45% of innovative companies carry out no market research study, and those who do carry them out fail to use them for anything. It’s thus no surprise that “75% of innovation failures can be ascribed to this marketing failure”, as noted by Paul Millier in his book L’étude des marchés qui n’existent pas encore (Researching markets that do not yet exist).
A market research study collects opinions from its targets, discovering the needs of the market, the level of competition, strategies used and current prices. It enables you to:
- Make the right decisions
- Ensure the market is ready to adopt your innovation
- Understand where the value of your project lies from the point of view of users or future industrial partners.
- Identify barriers that need to be overcome to convince the market.
- Position your innovation in relation to competing solutions.
- Expand the scope of your project by discovering other possible applications.
A market research study can give you an insight into opportunities for and threats to your project, as well as helping you make informed decisions (investment/abandoning the project, etc.).
Long, laborious work
Whether you’re the director of a startup, a research manager in a technology transfer organization, or even the director of a large group, the problem of time is an issue for all. You take your lunch breaks on the go and you need to ensure your innovation projects have a relatively short launch to market. It is therefore essential that you understand the details of your market to make a decision as early as possible, before you invest.
The main issue with a free study is that it is very time-consuming. To do it you’ve got to get stuck in and venture into resource libraries to unearth statistical data for your sector. You also need to get out into the field to meet your competitors and your future clients and ask them the right questions. You start by identifying a panel of qualified targets that will enable you to gather relevant opinions.
That’s all well and good, but is it really that simple?
First you need to identify them, find their details and contact them without having any real network to support you. Then you need to persuade each of them to give you a little of their time.
Consider the following scenario:
You want to speak to professionals working in the oil sector about protective equipment. But this kind of professional doesn’t necessarily have a desk. Their cell number might not necessarily be listed. No company directory can help you here. You then need to search for a recruiter in the oil platform field to recruit on your behalf. Through a drilling contractor you learn of a conference in a hotel on the other side of the country. You jump on the first plane out and walk through the conference center asking attendees to join you for a short interview. Finally, you have a discussion group, providing they accept of course. Now you need to get them to talk.
At the end of it all, you’ll have spent several weeks or even months to find around twenty target professionals, if the local market has made even finding that many possible.
You’ll need to manage things the old way and use all the creativity and persistence at your disposal to get qualified feedback. This will take a lot of time and energy for results that will not necessarily reliable.
A market research study must be reliable if you want to use its results to persuade an investment committee or potential partners. The relevance of the feedback cannot be called into question if the professionals questioned are carefully targeted and qualified. To find them you could of course consult a directory of experts to find their details. This technique is a good solution to get concrete technical responses for a particular field, however these results cannot constitute a reliable analysis as they are not market orientated.
To ensure your results are relevant, you need to obtain opinions from people who will be involved in and impacted by the project:
- Users and clients
- Industrial development partners
For even greater reliability, you of course need objective responses. If you choose to question professionals manually, you risk focusing solely on your own network and those related to it. Knowing potential interview subjects may also bias responses, particularly if the responses are not anonymized. Respondents will be obligated (even if only unconsciously) to respond in your favor, to say what you want to hear and not what the market wants.
If there’s one thing not to joke about in the field of market research, it’s representativeness. If you don’t have that, you may as well throw your results in the trash.
The more closely linked a project is to an industry, the more important it is to find specially qualified professionals, which by default limits their numbers.
You can use so-called community platforms to present your project and obtain opinions from interested professionals, but only in very limited numbers. Basing your decisions on just a few market responses (3 to 4 responses) is insufficient and is likely to bypass other potentially interested actors. This also causes difficulties in understanding the overall market, something that is very important in the exploratory phase.
Challenges and opportunities limited to a national scale
Depending on the innovative product or service you want to evaluate, you may want to explore several countries. Would my innovation be a success in the Chinese market? Would it be well received in the USA? All these elements will enable you to judge the interest in your innovative project in different markets.
Even if you only foresee national deployment in the mid-term, without worrying about other countries for the moment, nothing will stop international actors from entering your own country. So it’s better to find out what is going on beyond your country’s borders sooner rather than later.
The disadvantage of carrying out a market research study yourself is that you can only speak to accessible professionals, and you restrict yourself to a mainly national scope. Your responses will thus be neither representative nor adapted for your ambitions. A professional active in your country would be unlikely to be able to explain the ins and outs of the market in another country as it relates to your innovation.
Poor interpretation of results
In addition to correctly carrying out a complex market research study for your innovation, you’ll also need to know how to analyze and interpret the results. Once the study has been carried out, you’ll then need to sit with a 40-page report with over 100 comments that are both varied and relevant. How can you spot the useful elements? How do you sort the information to get that all-important overview for the exploratory phase?
You need to study your data long and hard. You then need to familiarize yourself with your data; avoiding rushing into the interpretation and analysis, and most importantly, taking the time to validate and check the data collected. You’ll need to be able to step back and be good at summarizing to analyze these results and demonstrate complete objectivity.
You need to limit yourself to understanding the results as they are, and not attribute any value according to what you would like to see. If you’re careless, you risk making errors in your interpretation, which could have a serious impact on the reliability of your results.
Today, with companies undergoing a digital transformation, modes of operation have changed drastically and information can be spread with a single click. By exploiting the power of the web and professional networks, new monitoring and analysis tools are being developed to quickly collect qualitative opinions from target professionals around the world in record time.
As you can see, thanks to the automation of processes brought by these new technological platforms, companies are saving money and time, carrying out exploratory market research with much higher levels of productivity, enabling them to make decisions much more quickly.