"Actionable Market Research"

I'm often asked why a company should invest in market research before they enter a new market. I sometimes ask them; did you do any research before you bought a car? How about your house? Heck most of us even research different cell phones and service provider plans. So it often baffles me why it seems so unusual to research an entirely new market before you enter it. Most entrepreneurs only have enough capital to do it right the first time or they're out of money/time packing it in and wondering what they did wrong.


From a market entry consultant's perspective market research such as country demographics are nice to have but not really something we recommend paying for since its readily available at places like http://www.fedstats.gov/ . What we often recommend is allocating a budget for what I call "Actionable Market Research". This includes a range of research dependent on the client's current knowledge base and management team but often contains competitor research such as how are they selling their product or service (channel strategy) and how are they pricing / distributing it, how do they compare to you? It should also look at potential customers - what does your potential client look like, what are the potential changeover costs and why is your product better, cheaper or faster than your competitors? Another area that is often forgotten is influencers i.e., who will your end customer go to in order to research your competitors or you and who tracks companies in your space. This isn't just the Gartners http://www.gartner.com/ or Aberdeen's http://www.aberdeen.com/ it also includes bloggers, hard copy and soft copy magazines.


There is much more involved in developing a really strong market research project but at the end of the day your market research should reduce market uncertainties, give you a good window into whether you should even enter the market and give you the base information required to develop your market entry strategy. That is why quality actionable market research is so valuable to a successful entry and should be part of any new market entry budget.