Imagine that you find yourself in any of the following situations:
- You are currently working for someone else, and you have an idea for a new product or service.
- You own a small business and you have been successful with your first product or service. Now you have an idea for a new product.
- You work for a large corporation, and the product that you manage has started to lose sales even though the market appears to be growing.
In situation #1, the question you are asking yourself is, "Should I quit my job and start a new business to sell this product?" The sub-question is "Will this idea work?" If the idea is going to work, and you can make a significant profit by starting the business and selling the product, then starting the new business is something you should consider. If not, then starting a new business is the wrong decision. To start your new business, you will need to quit your job, get a second mortgage on the house, work incredibly hard getting everything going and so on. If the idea does not work after doing all of that, it will be a major disappointment and a big financial loss.
In situation #2, the scenario is similar. Your small business is up and running and making a profit. Should you risk that profit on a new product? Is it worth it to invest the profit in this new product, or should you put the profit in the bank and wait for a better idea?
In situation #3, you have a mystery. A product that has been working is now losing sales for some reason. Your job is to find out why so that you can correct the problem.
Somehow you need to reach out to potential customers and/or current customers and find out what they are thinking. You need to ask questions and get some concrete answers. Do people need the product or service you are offering? If so, how many people need it? Which features are important to these people and which are not? What price would customers be willing to pay, and why?
The process that you use to get answers to questions like these is called market research. There are two ways to look at the process: From a business standpoint, market research is a way to get answers to important questions before investing a lot of time and money creating a new product or service. From a consumer standpoint, there are many people who enjoy being a part of the market research process. And they can even make a little money by participating in focus groups and surveys.
In this article, you will have the opportunity to learn about the market research process from both a business perspective and a consumer perspective.