| By Arnold Sandness, SCORE Counselor
You have a fantastic idea for starting your own business and you have researched your market in Part 1. Now you need to analyze the market appeal of your product or service to help you make decisions that will increase your chances of success.
There are four basic methods of measuring reactions to the appeal of your product or service: interviews, surveys, focus groups or test markets. No matter what type of research you conduct, formulating a good questionnaire is a key factor for success. The questions must be straight-forward, easily understood, and able to be completed quickly. Each method also requires a review of the situations in which the questions are asked and detailed summaries of the results. Comparisons of the results of the different methods can lead to reliable decisions to accept or reject a set of data.
Here are some tips on the four main types of evaluation methods.
1. Interviews - When conducting interviews, you can start with friends, neighbors and relatives, but you must include strangers to achieve a more objective set of answers. Be sure to tabulate answers in a way that can also be used for the results from surveys and focus groups.
2. Surveys - Use the same questions in surveys as you did for interviews. Surveys can be conducted by mail, telephone or in public places. Recognize that surveys often involve costs in postage, time and labor. The percentage of people responding will be low without some sort of incentive.
3. Focus groups - Focus groups usually require payment to each individual for the time they spend in each session. So be sure to consider the cost factor in using this method of research. In some locations, the marketing department of a university may be willing to conduct the focus group for a reasonable fee. The facilitator (leader) should introduce each of the questions used for surveys and individual interviews. Comments from the group should be tabulated into the same categories as other results so that they can be compared.
4. Test marketing - Test marketing is a way to expose your product or service idea to the real world. This method of research can be more difficult to analyze because the results, or sales, can be influenced by any one of the five Ps of marketing: product, packaging, price, promotion or placement. Try to isolate one of the factors in order to get meaningful results.
So, is your fantastic idea for a business going to result in ultimate success or plunge you into a world of mystery? Good meaningful research can help you answer that question and make the right decisions.
For help with market research or evaluating your great idea, consult with a professional. Seek help from your nearest SCORE office or online counselor.
Arnold Sandness spent his 33-year career as a marketing executive at General Motors, Delco Products Division. After retiring from GM, he became a marketing consultant until 1995 and joined SCORE in 1996. Arnold has been a SCORE leader at the chapter and district level, and served for the past three years on SCORE’s Marketing Advisory Council, which represents the field in regards to SCORE’s national marketing effort. Under Arnold’s leadership, the Dayton, Ohio SCORE chapter was named 2002 National SCORE Chapter of the Year.
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