Market Research

Market research concerns the collection and evaluation of data about the marketplace and

industry as a whole to gain information about its size, nature, and development.

It promotes market and industry knowledge that can help make business decisions by reducing

uncertainty and therefore risk.

 However, eliminating all risk is impossible for two reasons.

I) First, it is impossible to account for all factors that may affect the outcome - there will always

be "unknown unknowns".

II)Second, market research is time-consuming and expensive, resulting in a diminishing return.

 The best level of market research depends on the risk perception and attitude of the
entrepreneur.

 Generally, the objective is to reduce decision uncertainty and make a conscious decision,
with a calculated risk.

 The entrepreneur can use it to discover and evaluate the potential of the target segment,
but also to effectively position the new product compared to competitors in the
marketplace.

 Despite a limited budget, money spent on market research is money well spent, because it
prevents obvious mistakes.

 Although market research can be expensive, even with a small budget, we can gather
valuable insights from, for example, the internet, customers, and experts.

 Market research is, however, much easier for ongoing business than for start-ups with
radically new products.

 Radically new products may change product categories - and whole industries.

 Therefore, current market data may be obsolete (outdated).

  However, market and industry information is still required to understand the current
situation and thus the context of the entrepreneur's market opportunity.

 Although true innovative technology leads to a " different method of playing the game in
an existing business," the ability to establish a business model and plan is essential.

 Market data and arguments will help in understanding the market size and how things
may develop. It can back up the entrepreneur's business model narrative with facts.

 People who argue that seeking customer feedback on problems and prototypes is not
market research should reconsider.

SUMMARY:

MARKET RESEARCH IS IMPORTANT TO REDUCE RISK IN THE ENTREPRENEURS DECISION BY HELPING

VALIDATE ASSUMPTIONS MADE AT DIFFERENT STAGES OF THE START-UPS INNOVATION PROCESS.

BOTH SECONDARY AND PRIMARY DATA CAN HELP. THE FIRST IS FREELY AVAILABLE AND PROVIDES A
VIEW OF THE MARKET. THE LATTER IS COSTLY BUT ADRESSES THE ENTREPRENEURS SPECIFIC
QUESTIONS AND NEEDS.

MARKET RESEARCH REQUIRES KNOWLEDGE OF METHODS AND MODELS. IF THIS IS LACKING, SEEK
ASSISTANCE.

BY DOING RESEARCH THE INTREPRENEUR WILL LEARN THE IMPORTANCE OF CUSTOMER AND MARKET
INFORMATION FOR MAKING DECISIONS AND BUILDING CAPABILITIES.

MARKET RESEARCH IS BEST CONSIDERED AND ORGANISED AS A CONTINOUS PROCESS EVOLVING INTO A
MARKETING INFORMATION SYSTEM.

PROVLEM INTERVIEWS AND CUSTOMERS CO-CREATION ARE FORMS OF QUALITATIVE RESEARCH AND
ARE PRONE TO SELETION BIAS.