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2. Finding or creating a market?
CHAPTER 5
Finding or creating a market?
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Cube faces applied…
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Learning outcomes
To differentiate customer and market types
To define and plan market research
To develop questions fit for purpose
To Explore ethical issues and codes of research practice
To define the story of change
To analyse data and segment markets
To discuss the minimal viable product
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Market? Definitions
A place – physical or virtual – where buyers and sellers meet to exchange / purchase and sell goods / services
No actual contact between buyer and seller needed
All buyers of a particular good / service
Market for toothpaste
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Market types
Mass market
Large group of consumers with similar profile(s)
Niche market
Small highly differentiated group of buyers
Multi-sided market
Different buyers: free newspapers – free for readers – paid for through advertising by businesses
Geographical market
Differentiated by location: city / rural
Demographical
Age, gender, ethnic origin
Marital status
Education, profession
Employment status
Income
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Market types
Business-to-business B2B
Businesses selling to other businesses
Business-to-consumers B2C
Businesses selling to end users / consumers
Business-to-government
Businesses selling to government funded organisations or government directly
Consumer-to-consumer
Consumers selling to consumers
Third sector-to-government
Non-profit organisations selling to government funded organisations or government directly
Third sector-to-Third sector
Non-profit organisations selling to other non-profit organisations
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8. Four steps to finding the optimal buyers (after Blank, 2006)
Customer discovery
Customer validation – changed by Hill, 2015 to validation of sufficient numbers of customers to make the product marketable and viable
Customer creation
Company building
According to Hill, 2015 the sustainable start-up is not aimed at creating necessarily the next scaleable multi-million pound business.
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Customer types
Innovators 2 %
Early adopters 15 %
Mass followers 39 %
Late adopters 38 %
Laggards 6 %
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Market research
Market research, which includes social and opinion research, is the systematic gathering and interpretation of information about individuals or organisations using the statistical and analytical methods and techniques of the applied sciences to gain insight or support decision making.”
accessed June 10, 2014
For the sustainable start-up:
Focus on identifying the attitudes, feelings, consumption and / or usage behaviour of potential buyers of the product under development.
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11. Purpose of your market research
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12. 1 - Identify research purpose
Develop research questions
Select research design and methods
Develop questions for research
Select research participants / sample and ways to contact them
Test the research instruments
Collect insight and data
Analyse insight and data
Finetune product idea
Figure 5.2 Steps in the market research process for gaining customer insight
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13. Most common market research methods for primary research
Survey
Interview (structured and semi-structured)
Focus group
Observation
Field trial or product testing
Increasingly – social media research and e-research:
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14. Minimal viable product = MVP
Offers those core features that allow the product to be used
= Minimum feature set
To gain further feedback from a subset of possible customers who are
more forgiving if something does not work and
eager to give feedback
= a strategic tool in the process to developing the final desirable end product
(see Ries, 2011)
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15. Minimal viable product cont.
Establishes a direct link to the potential customers through researching reactions and use
To learn as much as possible as soon as possible from them
Before investing lots of money into purchasing equipment, stock etc.
To prevent waste of time and money
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16. Minimal viable product example
Create a mock website for the product and purchase online advertising to direct traffic to the site.
Mock website may consist of
a marketing landing page with
a link for more information or purchase.
The link does not lead to a possibility for purchasing anything, but instead clicks are recorded and measure customer interest.
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17. Aim of using the minimal viable product
Apply alertness and co-creation:
Create the customer persona
Matching
The product / service with features that are essential for them to buy the product
That offer a solution that makes a sufficiently big difference to their lives
At work or at home or when travelling
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18. Stakeholders impacting on the start-up and being affected by it
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19. Example: benefits versus features of a solution to a customer problem
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20. Ethical issues and codes of research practice
Ethical principles:
Voluntary participation
Informed consent
Avoid risk of harm as result of participation
Confidentiality
Anonymity
Codes of conducts:
Market Research Society
ESOMAR
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Summary
There are many customer and market types.
A careful creation and selection of customer groups needs to be based on insightful market research.
Only focused market research leads to useful results that help to define your first customer.
Spending time fine-tuning questions is a necessary investment.
Ethical considerations are essential for professional research that respects the future customer and buyer.
Benefits the customer gains when using the features you value is at the core of what you need to find out about.
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Questions?
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