Market research - don't trust your success to a guesstimate!

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Author:Finola Jennings Clark

for the Cultural Development

Foundation, Saint Lucia

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MARKET RESEARCHDon’t trust your success to a

GUESSTIMATE!




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Market Testing Your Product Idea

• We tend to think our customers have the same tastes, income, lifestyle that we do…

• Why is this so? Well, as creatives, we tend to make items that we like, therefore, logically, people like us should be our market, right?

• In fact, the reality is very often not like this at all…• The importance of making sure you understand

your market cannot be overstated!• Just think for a minute how much time, effort and

money you could waste if you make your products and they don’t sell – if that happened – would you know why? 2




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• The feasibility and ease of conducting market testing today leaves NO excuse for not including this as part and parcel of your business!

• Granted, you won’t be able to carry out an exhaustive survey, but you CAN gather sufficient information to help you make sound decisions

• Google Forms; Survey Monkey provide free options to conduct a survey – Google forms collates your responses into a spreadsheet and you can easily include product pictures and a wide variety of questions

• A photo, or album of photos on any social media platform can be a market test – Facebook, Instagram, Pinterest or your own Blog – just ask people to answer a few well-crafted questions that relate to the product pictures. And if you need to give them an incentive, offer a random draw prize, or early-bird discounts to all who participate

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• Meet your TRIBE - go ‘Old School’ and get out in the public. Ask a supermarket or high-traffic area in a mall if you can put up a table / display and conduct a survey for your product

• Nothing beats being able to see people face to face - While online surveys are great, you can’t match the power of meeting the people who might buy your product – they will connect with you and you can SEE their reactions as well as record their answers – an invaluable combination!

• Nothing beats letting people see, touch, taste your product: A real product that can be touched, turned over, tasted/smelled, tried out, will always be more effective than just a picture – people are able to give you much more accurate answers and insights when they can do this.

• Note: If you do an in-person survey, it is useful to have a team of people who are familiar with your product and know all the answers to questions, so you can gather enough data at one go.

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Working out your Poll Size• The number of persons you need to poll can be

scientifically calculated (see here: https://www.checkmarket.com/sample-size-calculator/ ) however, you can still use whatever results you get – just poll as many as you can.

• Let us still look at working out a sample size though, so we have a good idea what would be ideal:

• You first need to know approximately how many people are in the geographical area you will first sell your product: Lets say it’s the whole of Saint Lucia – that’s 180,000 people.

• But it’s unlikely that the ENTIRE population is your true target market – especially for start up, so think about who you believe are most likely to buy your products –

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https://www.checkmarket.com/market-research-resources/sample-size-calculator/




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• Is it women? Men? What age range? Income level? Geographical area?

• For Saint Lucia, go to http://204.188.173.139:9090/stats/index.php/statistics/population

• Click the “online database link” go to ‘Basic Tabulations” “persons” and choose the options illustrated below (or whatever options suit your need)

• In our case we are choosing “Sex” and “Age” and not selecting a geographical area smaller than the island

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http://204.188.173.139:9090/stats/index.php/statistics/population






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• say your target market is males between the ages of 25 – 40 years: according to the statistics that is a total population of about 20,000 persons

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According to the Check Market website, we need to invite 1885 people to take our survey. This will yield us (at 20% response rate @ 5% margin of error) the required sample size of 377 completed surveys




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• This number allows a 5% Margin of Error and a 95% confidence level – which means our estimates will not be super accurate, but since this activity aims to ‘give you a good idea’ what your market wants, we don’t have to insist on a super-accurate survey.

• In reality, you may find it VERY difficult to get almost 400 completed surveys unless you put in a really good ‘lure’ like a prize or something and make sure the survey is short and easy to do

• Unless you are investing in something that requires large amounts of money and time, you can safely say, If you get 100 - 150 surveys completed, it will still give you good insights into

what people want and what they are likely to do.

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Asking the Right Questions

• So, what are you trying to find out? • You want to know if your product is really going to sell• You want to know how much your target market will

pay for it• You want to know how many they will buy and how

often• You want to know if the people you think will buy it are

really the ones who will• You want to know where they prefer to buy it from• You want to know if there are things you could adapt

that would make them pay more or buy more• You want to know if they have any useful feedback for

you

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• So, what should you ask? • There are a few logical, time-tested steps to doing a

good market survey – You will not be able to ask ALL the questions possible; this would take too much time. So decide what is most important – we will go through some of the most fundamental ones here:

• Do try to survey as many people as you can and first, find out a bit about WHO THEY ARE before you ask about your product – this will help you clearly identify who will and who won’t buy your product

• What questions can you ask to achieve this ? Focus on what is called ‘Demographics’ 10




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• Try these questions first, they tell you who you are talking to - the demographics

• Are you Male / Female? (Only when not a person to person survey! Don’t ask if you can see them and answer this for yourself!)

• What is your Age?• Are you employed?• If yes, how much do you earn? • Now you can start to ask questions that will

help you define your TARGET MARKET? • Perhaps ask – • Do you, or anyone you purchase for, wear

formal men's shirts? 11




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• If they answer “Yes” you can safely say they might be open to buying cufflinks right? But you would not be very sure yet.

• If they answered “No”, does it mean they will not buy cufflinks? That is hard to say, but it would seem like they would be less likely than people who buy formal shirts right? So at this point, you could decide only people who buy formal shirts are your main TARGET MARKET

• So, now you would want to ask another question that helps you find out more about who they are and then if they would use your product you could ask

• Where do you shop for formal shirts? – this will let you know possible places to try to sell your item

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Now you want to be ask more specific questions that relate to your product – you could ask: Do you, or the person you buy for, ever use cufflinks?If they answer “Yes” you will take them through a longer survey – as outlined in slides below - that will help you define how much your market is worth and other useful information.But If they answer “No”, you may think you should let them go, BUT it is useful to find out more about the people before you let them go – maybe they don’t buy cufflinks for a reason that your product may be able to solve?So, find out WHY they never use cufflinks and then find out if your product may change their minds

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To find out what you need to know, you could ask: Which of the following is the main reason for you not buying or using cufflinks?Don’t leave answers open, always give the respondents specific options – this helps you to accurately quantify responses. Try the following type of answer options:• Cufflinks are old fashioned – If your cufflinks are amodern style

may be appealing to them; • Cufflinks are too difficult to use - If your cufflinks are easier to

use, they may buy• Cufflinks are expensive - If your cufflinks are lower price this may

appeal• Affordable cufflinks don’t last long - if you have both lower

price and good quality, they may buy• Other reason – please explain - This is your only open answer –

it allows you to get information you may not have thought of. If enough people have the same “other reason”, then it could be an issue you should pay attention to – if not for a primary market, then for when you are ready for a secondary market

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• To someone who says they do buy cufflinks, you need to ask more questions to quantify your market: e.g.• How much do you normally pay for cufflinks? • Give options, eg1) <$20 2) $25-$30 3) $40-50 4) $60-

70• Should reflect the price range you are hoping for but include at least 1

lower than your lowest acceptable price and at least 1 significantly higher than the price you hope for

• On average, how many times a year do you buy cufflinks?• Less than once Once 2 times 4 times • Options should reflect what would be ‘normal’ frequency

• Where do you normally buy your cufflinks?• If you know there are specific shops that sell cufflinks you can

make a list of these, you can also ask if they buy online at some online stores you could sell via and if they buy direct from artisans/makers

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http://www.freeimages.com/photographer/coolza-53830

http://www.freeimages.com/photographer/beermug-77396

The Moment of Truth! Now that you have found out their shopping habits, it’s time to present your product and find out what they think about it!There are a number of ways to present your product, such as:• Verbally present your Customer Value

Proposition• Show a Concept Board• Display samples of your products• Demonstrate your product• Give customers a chance to try your productYour CVP is key – various combinations of the others can be used alongside

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Product Concept BoardIt’s great to have a product for people to see, feel, touch, taste, but you may not be able to provide a prototype and even if you can, there is more you want them to really take in and react to and one of the tools you can use is a Product Concept Board• You can create an engaging Product Concept Board

with:• Good/emotive photograph or illustration of

• the happy person and/ or• stylish setting that • represents how you want your customers to feel

• Short phrases from your Product Value Proposition that highlight your products best features

• Think of it like laying out a great full-page magazine advert

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Sample Product Concept Board

Used with permission: www.jerrymctigue.com/new-product-copywriter.html

Note the image evoking feelings of relaxation, enjoying life, holidays and a picture of the product with real fruit and then some key info about the product and what makes it special

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Product Presentation• If you can’t create a whole Concept Board with professional

images, you can still print a sign with your• Product name • Clear photo• Main selling points (benefits and advantages)• Price(s)• You can also create an engaging atmosphere by :• Having a few models with branded t-shirts, or colours that relate

to your product, holding/demonstrating/distributing samples of your products. These don’t have to be professionals, they can be friends if needs be.

• Create a display with risers, multiples of your product if it’s small, or just one if it’s big. You can add a few props that show how it might be used or create a striking contrast as a backdrop ***they must not detract from the focus on your product though!

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Creative DIY Promotional Display Ideas

http://www.99pallets.com/pallet-furniture/pallet-coffee-cup-holder-tutorial-do-it-yourself/

facebook.com/TeachingIdeas

http://www.enzocreative.com/blog/?p=952




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Getting to the Nitty-Gritty…• Once you have made your pitch, remember you need to

find out • if they would actually buy and if so, • what price they will pay.

Ask:• “Would you buy this product?”

• if they say “No” then go to the last set of questions• If they say “Yes” then ask

• “What price range would you expect to pay?” • Give them specific answer options (these should include a price below

your minimum, your minimum and at least 1price higher than you think you can get)

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Would not buy go to last questions

Would buy at $15-20

Would buy at $25-30

Would buy at $40-50

Would buy at $75-90

This helps you to establish the potential $-value of the market




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Now you need to establish how many of your product they are likely to buy.You can ask: “How often would you purchase this product and how many at a time?” or “How many of this product would you expect to buy in a year/month/week” (choose depending on your product type’s normal average frequency)Answer options should reflect what you think normal purchase amounts/rates would beIt is also important to, at minimum, include one lower and one higher than what you think is normal: e.g.

22 1-2 a month 3-6 a month 7-10 a month 10-12 a month




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What else can you find out?Don’t miss the opportunity to ask for additional information that might improve your product in the customer’s eye – Ask:

• Can you make any suggestions for improving this product?

• Is there anything you’d like to see added or changed that would increase the appeal to you?

• Would you like to be more likely to buy if (eg packaged differently, available in other size, sold in multiple packs…)

Where possible create a selection of options for each question so it is easier to quantify the responses.And do ask, one last time if you can: “any other suggestions?”And of course, when you are done, end by saying Thank You!

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http://www.freeimages.com/photographer/sundesigns-49917




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http://www.freeimages.com/photographer/SailorJohn-52514

Putting a $-Value to your MarketSo we can get an idea of how many people in our Target Market will be likely to buy at a given price by counting up how many said yes – Lets say we choose a price of $45 because of the 100 people we surveyed the biggest group – 40 people - said they’d buy at $40 – 50 priceThis means a fairly safe calculation of potential income from this market for the year is: 40% of 20,000 x $45 = $360,000

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But what about at a higher price?Lets say only 7 people said they would buy at $75-90 – would it be worth considering selling at the middle of that range? Let’s say $85?7% x 20,000 x $85 = $119,000




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Well you have a few factors to consider in choosing what price to sell – yes, it would appear you can make the most by selling at $45 in your Target Market – but maybe at this price your profit margin (on your wholesale price which let’s say is $27) is only $2 – Let’s take a closer look at the numbers:40% of 20,000 = 8,000 units are needed 1) Can you make that many?Each unit yields $2 profit – So that’s a total of $16,000 in profit2) Is that sufficient profit for your business?

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At the higher price though, your wholesale price would be about $50, so you are making $25 profit off each unit. But you will only sell (and only need to produce) 1,400 units and these will yield $ 36,000 in total profit

Which would you choose?




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• You can now better identify your target market• You can see what people like/don’t like about your

product and maybe make some changes• You may have some important new ideas to adapt

your product• You can review your Customer Value Proposition

and make it MUCH more targeted to your ideal market

• You can fairly safely settle on a price you want your product to at retail. • Note: Please make sure you can cover your real costs AND afford to sell wholesale at that price – remembering that depending on where you sell to, wholesale may be 50% or half of your retail price!

• You can estimate what you could earn in a year26

Takeaways – what you learnt




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• Choose one of your new product concepts & develop a USP and a Customer Value Proposition

• Write your Survey giving consideration to who you think your main target market might be (in our examples, people who purchase formal shirts)

• Create your survey tools (Images for online survey, Concept Board or Product Presentation etc)

• Conduct your survey • Analyse your results –

• work out market value possibilities and• adapt your product and marketing tools if your

survey suggests

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Practice – time to try your own




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Here are a few of the surveys designed by the students at OAS Craft Enhancement Business & Marketing Training

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Sample Surveys

Hair Care - Bee Natural Survey – ( phone / online)1.Do you buy Hair Products for: Styling Conditioning when washing

Deep conditioning2. How much are you willing to pay for one of our items that lasts a few months? (US$)$5-9 $10 - 14 $15 - $19 $21 - $25

$26-$303. If you are not interested in buying - could you tell us why?Don’t trust locally made products Too expensive Buy a certain Brand (which)___________ Other-please say what? __________________________ (go to Occupation) 4.Would it change what you are willing to pay if you knew these items were made by persons with disabilities? I would pay more I would want to pay less No Difference




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5. Would it change what you are willing to pay if you knew these items were all natural?I would pay more □ I would want to pay less □ No Difference □6. Would it change what you are willing to pay if you knew these items were all locally made?I would pay more □ I would want to pay less □ No Difference □7. Would you order items made in Saint Lucia online? Yes / No / Maybe8. Where do you normally purchase your hair care products?8. Is there anything else you can tell us about that influences your buying choices? What is your occupation? ________________________ What country are you from? _____________________Do you mind telling me your age? _________ Male / FemaleThank you for your time




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KAYZ Kreations Research Survey1 Would you buy items made from burlap material? Y N Maybe2. If no, why not? __________________________________3. Would you buy something like these as a souvenir from Saint Lucia? Y N Maybe4. How much would you normally pay for a local craft item or souvenir for friends and family? US $

$2-5 $6-10 $11-20 $21-45 $46-605. How much would you normally pay for a local craft item or souvenir for yourself? US $

$2-5 $6-10 $11-20 $21-45 $46-606. Where do you normally buy local gift items? Check the answer that applies. Beach Vendors at hotel Hotel Shops Craft shops outside hotel Direct from Artisans Other: __________________________________7. Do you feel local crafts are: cheap priced ok expensive8. Would you order items made in Saint Lucia online? Yes / No / Maybe 9. Do you have any suggestions you think would improve the quantity you would buy or price you would pay?What is your occupation? ________________________ What country are you from? _____________________Do you mind telling me your age? _________ Male / FemaleThank You for your time!




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Kids Aprons by Tuhpuh and Pohtay survey1. Do you think these aprons are: Practical Fun Durable2. If you said ‘Yes’ to any of the above, would you buy them for your kids / another person’s? Y/N3. How much would you pay in US$: $5 – 10 $11 - 15 $16 - 25 $26-35 $36 -504. How many do you think you’d buy a year? 1 2 4 65. Which of the following colours do you prefer for these aprons? Natural 1 bright multicolour6. Would it change what you are willing to pay if these items were all biodegradable?I would pay more □ I would want to pay less □ No Difference □7. Would it change what you are willing to pay if you knew these items were locally made?I would pay more □ I would want to pay less □ No Difference □8. Would you order items made in Saint Lucia online? Yes / No / Maybe What is your occupation? ________________________ What country are you from? _____________________Do you mind telling me your age? _________ Male / FemaleThank you for your time – we hope you’ll become a satisfied customer!




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Kids Aprons by Tuhpuh and Pohtay survey1. Do you think these aprons are: Practical Fun Durable2. If you said ‘Yes’ to any of the above, would you buy them for your kids / another person’s? Y/N3. How much would you pay in US$: $5 – 10 $11 - 15 $16 - 25 $26-35 $36 -504. How many do you think you’d buy a year? 1 2 4 65. Which of the following colours do you prefer for these aprons? Natural 1 bright multicolour6. Would it change what you are willing to pay if these items were all biodegradable?I would pay more □ I would want to pay less □ No Difference □7. Would it change what you are willing to pay if you knew these items were locally made?I would pay more □ I would want to pay less □ No Difference □8. Would you order items made in Saint Lucia online? Yes / No / Maybe What is your occupation? ________________________ What country are you from? _____________________Do you mind telling me your age? _________ Male / FemaleThank you for your time – we hope you’ll become a satisfied customer!