TECHNOPRENEURSHIP

TECHNOPRENEURSHIP

Market Research
and Validation
 Market Research and Validation

Market Research

TECHNOPRENEURSHIP
 Market Research and Validation
Market Research

➢ Market research is the process of determining the viability of a new service or product
through research conducted directly with potential customers. Market research allows
a company to discover the target market and get opinions and other feedback from
consumers about their interest in the product or service.

➢ This type of research can be conducted in-house, by the company itself, or by a third-
party company that specializes in market research. It can be done through surveys,
product testing, and focus groups. Test subjects are usually compensated with
product samples or paid a small stipend for their time. Market research is a critical
component in the research and development (R&D) of a new product or service.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Research

➢ The purpose of market research is to look at the market associated with a particular
good or service to ascertain how the audience will receive it. This can include
information gathering for the purpose of market segmentation and product
differentiation, which can be used to tailor advertising efforts or determine which
features are seen as a priority to the consumer.

➢ Market research is a critical tool in helping companies understand what consumers want,
developing products that those consumers will use, and maintaining a competitive
advantage over other companies in their industry.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Research

➢ A business must engage in a variety of tasks to complete the market research process.
It needs to gather information based on the market sector being examined. The
business needs to analyze and interpret the resulting data to determine the presence of
any patterns or relevant data points that it can use in the decision-making process.

TECHNOPRENEURSHIP
 Market Research and Validation
Understanding Market Research

➢ The purpose of market research is to look at the market associated with a particular
good or service to ascertain how the audience will receive it. This can include
information gathering for the purpose of market segmentation and product
differentiation, which can be used to tailor advertising efforts or determine which
features are seen as a priority to the consumer.

➢ Market research is a critical tool in helping companies understand what consumers

want, developing products that those consumers will use, and maintaining a competitive
advantage over other companies in their industry.

TECHNOPRENEURSHIP
 Market Research and Validation
Understanding Market Research

➢ A business must engage in a variety of tasks to complete the market research process.
It needs to gather information based on the market sector being examined. The
business needs to analyze and interpret the resulting data to determine the presence of
any patterns or relevant data points that it can use in the decision-making process.

TECHNOPRENEURSHIP
 Market Research and Validation
The Development of Market Research

➢ Formal market research began in Germany during the 1920s.1 Around the same time,
market research in the United States took off during the advertising boom of the
Golden Age of Radio. Companies that advertised on the radio began to understand
the demographics that were revealed by how different radio shows were sponsored.

TECHNOPRENEURSHIP
 Market Research and Validation
The Development of Market Research

Face-to-Face Interviews

➢ From there, companies were developed that would interview people on the street about
publications that they read and whether they recognized any of the ads or
brands within the ads that were published in the magazines or newspapers the
interviewer showed them. Data collected from these interviews were compared to the
circulation of the publication in order to see how effective those ads were. Market
research and surveys were adapted from these early techniques.

➢ To get a strong understanding of your market, you should understand demand, market
size, economic indicators, location, market saturation, and pricing.2

TECHNOPRENEURSHIP
 Market Research and Validation
The Development of Market Research

Phone Research

➢ Data collection then shifted to the telephone, making face-to-face contact

unnecessary. A telephone operator could collect information or organize focus
groups—and do so quickly and in a more organized and orderly fashion. This method
improved the market research model greatly.

TECHNOPRENEURSHIP
 Market Research and Validation
The Development of Market Research

Online Market Research

➢ With people spending more time online, many market research activities have shifted
online as well. While the platform may have changed, data collection is still mainly done in
a survey-style form. But instead of companies actively seeking participants by finding
them on the street or by cold calling them on the phone, people can choose to sign up
and take surveys and offer opinions when they have time. This makes the process far
less intrusive and less rushed since people can do so on their own time and by their own
volition.

TECHNOPRENEURSHIP
 Market Research and Validation
What are the Main Types of Market Research?

➢ The main types of market research are primary research, which includes focus groups,
polls, and surveys, secondary market research, which includes articles, infographics, and
white papers, qualitative research, which gives insights into how customers feel and
think, and quantitative research, which uses data and statistics, such as website views,
social media engagement, and subscribers.

TECHNOPRENEURSHIP
 Market Research and Validation
What is Online Market Research

➢ Online market research is market research that is conducted over the

Internet. Online market research can be either qualitative or quantitative
and follow the same format as primary and secondary market research
methods.

TECHNOPRENEURSHIP
 Market Research and Validation
What are Paid Market Research Surveys?

➢ Paid market research involves a group of individuals that are paid to

partake in a research study. This can involve filling out surveys, partaking
in group studies, research panels, and more. The individuals are usually
pre-selected and monetarily rewarded for their time and effort.

TECHNOPRENEURSHIP
 Market Research and Validation
What is a Market Study?

➢ A market study is the proactive analysis of market demand for a product or

service. A market study looks at all of the factors involved in the market
that influence the demand for that product or service. This includes price,
location, competition, substitutes, and general economic activity.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Research

➢ Market research allows companies to understand the demand and viability

of their product and to see how it might perform in the real world. Market
research is conducted either through primary information or secondary
information, both providing unique insights into a company's offering.
Market research is a key component of a company's research and
development (R&D) stage and is a key aspect of its success and growth.

TECHNOPRENEURSHIP
 Market Research and Validation

Market Validation

TECHNOPRENEURSHIP
 Market Research and Validation
Market Validation

❑ Market validation is the process of determining if there’s a need for your product in
your target market. Validating your business idea can enable you to reasonably predict
whether people will buy your product or service, and whether your business will be
profitable.

❑ It’s important to validate your idea early in the entrepreneurial process to ensure you
don’t waste time and resources creating a product that isn’t a good fit. Securing market
validation can also instill confidence among investors, crowdfunders, and banks that are
considering funding your startup.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Validation

❑ By going through the process of validating your business idea, you can gain a deeper
understanding of how your product does or doesn’t meet your target customers’ pain
points. The insights you gain can help you create an offering that not only addresses
your market segment’s needs, but earns you your first paying customers.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Validation

1. Write Down Goals, Assumptions, and Hypotheses

❑ Writing down the goals of your business is the first step in market validation. The
process of articulating your vision can illuminate any assumptions you have and provide
an end goal.
❑ Ask yourself:
What’s the value of my product?
Who’s the target audience, and what assumptions have I made about them?
What differentiates my product from existing ones?
What hypotheses do I have about my product, pricing, and business model?
❑ Answering these questions can help you communicate the value and differentiating
factors of your product, and illuminate assumptions and hypotheses you’ve made that
are yet to be tested and verified.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Validation

2. Assess Market Size and Share

❑ Before moving forward with your venture, estimate the size of your target market and
the share of it you could potentially capture. By doing so, you can gauge your
business’s potential and justify its launch.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Validation

3. Research Search Volume of Related Terms

❑ Another way to gauge the market validity of your business idea is to research the
monthly search volume of terms related to your product or mission. When consumers
need a product or service, they often use a search engine to see what the market has to
offer.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Validation

4. Conduct Customer Validation Interviews

❑ Conducting interviews with your target market segment can be an effective way to learn
about your product’s potential. This initiative might include hiring a market research
company to conduct focus groups, sending out an online survey, or simply requesting a
conversation with someone.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Validation

5. Test Your Product or Service

❑ Once you’ve determined there’s space for your product in the market, ensure you’re
putting the most useful, intuitive version of it into the world. You can achieve this
through alpha and beta testing.
▪ Alpha testing is when internal employees test a product in a staged setting. The purpose of
alpha testing is to eliminate any bugs, issues, or idiosyncrasies in the product before it’s available
to outside users.
▪ Beta testing is when a product is tested by a limited group of real, external users who are
specifically told to identify problems. In the case of a software or app, beta testing might be
open to the public with a notice letting users know the version they’re testing is unfinished.

TECHNOPRENEURSHIP
 Market Research and Validation
Market Validation

5. Test Your Product or Service

❑ Testing your product with real users can prove invaluable when assessing market
validity. If there’s a need in the market, but your product is faulty, complex, or difficult to
use, customers may opt for a competitor’s offering. The feedback you get from beta
testers can help you better leverage and meet customer needs.

TECHNOPRENEURSHIP