Sunday, April 21, 2013

Performing Market Research is Key to the Development of a New Product or Invention

imageThis article was written by John Rau, SCORE Orange County Business Mentor

The major focus of market research is to “do your homework” before moving forward with your idea for a new product or invention. Generally speaking, you wouldn’t buy a car, a house or other products without doing some basic research; therefore, you should approach the development of your idea or invention in the same manner. However, to accomplish this you need a plan that addresses what you are looking for.

You should start out with an initial market research plan that “gets you going”. It should be flexible as the plan may change over time depending on the results of your search. To develop such a plan, basic suggested steps are as follows:

Step 1 Identify and list what types of information/data you need, that is, the questions you need to get answers to. For example, what like or similar products (if any) are already in the marketplace and what are the characteristics of these like or similar products in terms of their features, price and who manufactures them.

Step 2 For each item listed in Step 1, identify the potential sources of information/data such as trade associations, published reports, etc. A “matrix type of approach” might be helpful here where you list as rows the specific types of information/data that you need and list as column headings the potential source. Then place an “X” in the appropriate cell. The advantage of this approach is that it will reveal for you the fact that some sources may meet more than one of your information/data needs. For example, trade association publications typically provide sales trends and information regarding companies involved in your market area and published market research reports typically provide market assessments, past and future, as well as a discussion of potential competitors. One column heading should be “Visit Stores and Walk the Aisles” whereby doing so you can get some idea as to what like or similar products may already be in the market place. Another similar and related column heading would be “Trade Shows” where by attending and again “walking the aisles” you can get further insight as to what like or similar products might be “out there”. (Note: One should be careful here in the sense that just because you didn’t find any like or similar products when you “walked the aisles”, that doesn’t necessarily mean that there aren’t any. You just may not have found them!)

Step 3 For each potential information/data source listed, identify how to “access” it. Going to stores and trade shows is obvious, but you may need librarian type assistance as to how to find secondary sources of information. Key word or phrase research on the internet is always worth doing. Never rely solely (if ever) on the “singing Sirens” associated with the “dial 1-800” television company advertisements that claim to have “manufacturers waiting and ready to buy your idea and to make you a multi-millionaire” as a source of market information.

Step 4 Develop a timetable/master schedule outlining the time-phased steps for implementing your market research plan. Build in check points and milestones to enable you to assess where you are and, in particular, whether or not it makes any sense to go any further. At some point in time, you may find that you already have enough information/data to make a meaningful decision as to how to proceed.

Step 5 Implement your plan in the sense of gathering the information/data that you have identified as needed in order for you to proceed with your invention idea.

Step 6 Analyze the information/data obtained to assess whether or not you have been able to gather all that you need. If not, then identify the “holes” and go back and fill them.

Step 7 Based on the results obtained in Step 6, make a decision as to moving forward with your invention or moving on to another idea.

I strongly recommend that inventors always implement some type of market research plan as outlined in the above 7-step process at least initially (perhaps not to the level of detail described) before moving forward and filing for a patent. The obvious rationale is that it makes no sense to pay an attorney and filing fees if your initial research indicates that your idea or invention doesn’t have a reasonable chance of making money.