Market Research – Part 3

This is the third in the market research series and I will cover issues in market research.


Accuracy vs. authenticity?

I have often wondered how important is it to have your market sized up to the last decimal point vs. knowing that what you have comes from a reliable source of data, which in all probability have covered only about 60-70% of the relevant market applications. In which case some of their numbers may be way off, but the rest will be in the ball park.

The lemon vs. apple vs. pineapple phenomena

In fact, when you look at market data, it is generally important to know whether the market is too small to enter, in which case you might be chasing a lemon or is it too large to dig your teeth into, and is a pineapple. One is generally seeking a market that is sizable and manageable to begin, like an apple. So, stating what those limits are for you and figuring out whether the market falls in that range is sufficient for top level market research. Beyond this – all you will do is purchase costly reports and try to triangulate them by spending equally costly resources searching for the information that does not exist and may not prove valuable in decision making.

Fast changing landscape

Also, given the nature of today’s environment, for a market research professional it is more important to know what are the factors that can possibly swing your data widely and know what might cause them to occur. Modeling possible scenarios based on market trend assumptions makes one realize a realistic limit for the market forecasts based on the trend assumptions.

When is being in the ballpark not sufficient?

Consider that you are launching a production line and the estimate and forecasting you make decides what kind of capacity is installed or purchased and it is not easy to upgrade. You can have large sunk costs or lost opportunity costs if the numbers varying up or down from the forecasts. At this stage, it is important to use forecasting techniques based on historical data (if you have any for your product in the market) or a parallel market (that best represents what you are launching).

When information is just not available

Generally, post a quick and dirty search for information sources on Google, the next resort for most market research professionals is to go after research reports. While, it is not a bad idea and gives credibility to your data when presenting before top management, I have found that the purchased costly reports generally either don’t meeting quality standards, that is they will not match data from random other sources or they will not be deep enough to be useful for an in-depth product launch level analysis.

Forecasting markets based on triangulated primary information

Now, your current or future competitors in the market publish a wealth of data in their annual reports, investor conference calls and meetings – only if you listen. People who have worked in the relevant industries are all around you and have an opinion on the market and trends and can help you validate/invalidate your assumptions and even, data sometimes – again, only if you look around and ask. Reaching out and listening to what they have to say is key. Beyond that it is up to your interpretation, your task at hand and what your management wants to see…

All the best with your market research and feel free to ping me if I have missed some obvious issues or if I have some concepts grossly mistaken, will be glad to get comments and feedback…


0 Responses to “Market Research – Part 3”

  1. Leave a Comment

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Blog Stats

  • 29,601 hits

Enter your email address to subscribe to this blog and receive notifications of new posts by email.

Join 1,281 other followers


%d bloggers like this: