Tuesday, March 9

Problems in Conducting New Market Research

When it comes to market research it seems evidently easier to conduct research in existing markets and in established markets. There is more data available, established best practices and it is easy to conduct quantitative or qualitative research. Conversely conducting new market research would seem initially to rely on less concrete data and overcoming this problem is necessary if we are to be able to develop an understanding of the potential in a new market. 

In light of this problem we’re now going to examine the problems of conducting new market research and ways of avoiding these pitfalls. In new markets it is generally better to use a market research company with extensive experience of the field as they can overcome many of the problems we now turn to.
Pinning down demographics

In new markets pinning down demographics is the key to understanding the tenability of a new market. With an existing product you can conduct new market research to establish its appeal or lack thereof to a group outside of your regular audience. With an untested market, you will need to conduct broad research that provides a detail picture of your potential demographics and their initial feel for a product or service.

Pinning down demographics in a new market then initially requires a broad spectrum of analysis and extensive survey based research. A sample size of at least several thousand respondents will give you a picture of an overall market but only if demographic analysis is thorough throughout. The larger the survey sample size the more useful the collected data will be. When conducting market research of this kind segmentation techniques need to play a crucial role as we need to identify directly groups that will be our potential customers. Without this insight our marketing efforts are likely to fail.

Developing marketing strategy

When conducting market research the marketing options and methods available need to be at the forefront of the research. If we can identify a new market then we also need to understand how to market to that market. In existing markets marketing strategy is established and of course with all marketing there are standardized best practices. But in new markets we have the additional problem of not knowing what the most effective marketing technique will be for any particular product or service. Appealing to demographic data and to similar markets is incredibly relevant here and cross market analysis into similar sectors needs to be undertaken to come up with comparative marketing models. This needs to form an integral part of new market research.

Susceptibility and stability research

With any new market we encounter the additional problems of stability and trends as well as unforeseeable susceptibilities our products or services may face. It can be very problematic trying to pin down market patterns as no data exists. Judging the stability of the market is equally problematic as it is new and we can have no direct knowledge. Comparative research then needs to influence our decisions in this sector but we also need to track and monitor the market itself from day one and ensure that our extensive market research identifies potential problem areas and potential shifts that may occur in the market. Whilst this must be prediction it can be undertaken on the basis of quantitative data that draws parallels between markets; thus remaining integral and necessary to good practice.

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