Mapping the Process - "New Product Development"
Market Research
AN ANALYSIS OF THE MARKET
Definition - market research is an orderly, objective way of
learning about people - the people who buy from you or might buy from
you!!
The purpose of market research is to develop a detailed profile of
the "ideal" consumer in the market segment you are trying to reach.
Market Research will provide answers to six basic questions!
i) Who Will Purchase Your Product?
- What are the characteristics that would make the consumer choose
to purchase your product?
- Consider that selling transactions may involve several people.
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Initiators, Influencers, Deciders, Buyers,
Consumers, Evaluators |
- In many cases, one person may play all six roles. BUT be aware
of situations where the person who actually uses the product (The
Consumer) may be different than the person who actually makes the
purchase (The Buyer).
ii) Why Will The Consumer Purchase Your Product or Service?
- Research has found that our behaviour is directed at the
satisfaction of various needs.
- More importantly, it is not a satisfied need that
motivates our behaviour, but rather an unsatisfied need.
- The decision to buy or not to buy often comes from what we
anticipate will be the consequences of our decision.
- Consumers almost always evaluate their purchase decision.
- Consumers tend to choose the alternative with the highest
perceived net rewards.
- Therefore, as an agricultural entrepreneur it is necessary to
examine what consumers may view as positive and negative outcomes of
buying your product.
| Case Study
Example: Buckwheat Cookie |
Buckwheat Specialty Cookie
available at Gourmet Food Stores |
Positive Consequences:
- Personal Indulgence.
- Do not have to bake cookies at home. |
Negative Consequences:
- Not an essential food item.
- Requires trip to specialty store. |
iii) What Do Consumers Buy?
- What people buy may be divided into two main categories.
* Consumer Products
* Industrial Products
Consumer Products - Are those intended for the ultimate
consumer. Consumer products can be subdivided into four sub-groups.
* Convenience Items
* Shopping Items
* Specialty Items
* Unsought Items
Industrial Products - Are those used directly or indirectly
in producing other products for resale.
- Further research into these product categories will provide the
entrepreneur with valuable information describing the
characteristics of consumers who purchase a specific product type.
iv) How Do They Buy?
- Review the advantages and disadvantages of offering credit
options to your customers.
v) Where Do They Buy?
Where consumers choose to buy depends on time utility and place
utility.
Time Utility: Products are available when consumers want to
buy.
Place Utility: Products consumers want to buy are available
where they want to buy.
Consumer demands on place and time utility will vary according to
the product they wish to purchase.
| - |
Time Utility is important
when selling specialty items. It is essential to have the goods on
hand when consumers want them. |
| - |
Place utility is not as important, as
customers will go to great lengths to get what they want!! |
vi) When Do They Buy?
- Observe the times of day when you are likely to do volumes of
business and arrange operating hours accordingly.
vii) Other Questions To Consider
- What are the requirements of your customers?
- What price will they pay for your product?
- What type of packaging do they prefer?
- Who is producing the same or similar product? Can you compete?
- If no one else is producing your product, why not?
- What advantages can you offer over your competition?
- Is the market saturated or is there room for your product?
- Does trend data indicate an increase in consumption of your
product?
- What do you see as the future for your business. Do you want
your product on the shelves of large supermarkets or gourmet
specialty foods stores?
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