Once set with an idea and research on it is completed, the next step is to determine market appeal for your product or service. A good idea is only as good as the customer believes it is. Identifying how your product or service differs from the competitions’ is vital. Pin down who you feel your customer will be, where they are, how much they earn (affordability of the product or service), and who your competitors are. How is your product or service different? Why will customers come to you? Some key avenues to conducting market competition research follow.            

Interviews

As when conducting general research, conducting market research can be accomplished via interviews. Include those you know and strangers for an overall honest approach, and tabulate similar information together. Comparing apples to oranges does nothing except to increase confusion. Consider a focus group: Invite a cross-section of people to meet somewhere where you can ask questions aloud or have them fill out a short form as well. Focus group participants may expect compensation of some sort, but it could be something affordable such as discount coupons that you may have lying around your home. Be upfront about the compensation.

When tabulating results, again be sure to compare like information.

Surveys

You may use the same questions as in the interviews when conducting surveys. In fact, it may be preferred to keep the information consistent. Offer an incentive such as a small discount on the first purchase to encourage participation. Otherwise, surveys can get lost in the shuffle. In mailings, include a self-addressed, stamped envelope for convenience. Consider conducting surveys in person.

Test Marketing

Test marketing may be a bit more expensive and time consuming, but a valuable tool in conducting market analysis with a product. Analyzing results may be difficult in that you will have to measure the five Ps of marketing: price, packaging, product, promotion or placement. When analyzing information try to isolate one or more sole factors in order to yield useful results.

Business Customers

If you will provide your product or service to other businesses, be sure to include business owner input in your research. Include businesses competitive in nature as well as those similar or dissimilar to yours. 

Customer Profiles

To whom is your competitor selling? What types of people are they? What age group(s), background, economic status are they in? This is all pertinent information, as you may wish to sell to a somewhat different market. Your competitor may offer financial services, but it may be to higher-income customers. You may offer financial services for the average person making less than $80,000 per year, for instance.

Industry versus Market Method of Research

Conducting general market research of all those who would potentially become your customers is good, but another method is conducting industry research. This involves researching only the competition specifically offering the same product or service as you intend. Thus, your financial services business should be compared only to other businesses offering financial services and should not, in this form of research, include related businesses such as banks or finance companies.

The End Results

You may discover a lack of interest in your product, its pricing, availability and so forth, or arrive at an impasse But this does not necessarily mean scrapping the idea altogether. Most business start-up ideas require some form of tweaking at the start for successful launching. Perhaps a flower shop is not in the cards for you at this time, but maybe offering fake flower arrangements is. Consider aligning with another existing company as well. The future may allow you to create your own offshoot company.