Market Research is Key to Commercialization Success
Tags: federal funding, Market Research, SBIR, SBIR/STTR reauthorization, Strategic Planning, STTR
Articulating a compelling commercialization strategy in your SBIR/STTR proposal is more important than ever for funding success. A credible commercialization plan must be built on a foundation of current and relevant information about the commercial opportunity you’re pursuing. The process of gathering, analyzing and interpreting that information is called Market Research. Market research is used for developing effective strategies, weighing the pros and cons of a proposed decision, determining the future path of the business, and much more. Competitive Intelligence is an important component of determining market strategy.
Primary research gathers information directly from end-users, prospective customers, or other individuals with knowledge of the market. Techniques used for primary research include:
- Interviews (either by telephone or face-to-face)
- Surveys (online or by mail)
- Questionnaires (online or by mail)
- Focus groups gathering a sampling of potential clients or customers and getting their direct feedback
Relevant information includes product usage patterns, as well as attitudes, preferences, and opinions about current or future products. Questions might include:
- What factors do you consider when purchasing this product or service?
- What do you like or dislike about current products or services currently on the market?
- What areas would you suggest for improvement?
- What is the appropriate price for a product or service?
Citing primary research data in your commercialization plan increases its credibility because it demonstrates that you’ve begun the process of engagement with various stakeholders in your target market. This is probably one important reason why graduates of NSF’s I-Corps “customer discovery” program have reported a significantly higher funding success rate with Phase I proposals.
Secondary research analyzes data that has already been published. Secondary data allows you to identify competitors, establish benchmarks and identify target segments. Those segments might include people who fall into your targeted demographic-for example, those who live a certain lifestyle, exhibit particular behavioral patterns or are within a predetermined age group.
The validity of secondary market information obviously depends on its source. Does the responsible organization or individual have sufficient knowledge and experience in the market to make them credible? Even when they do, the danger for an entrepreneur is in relying solely on expert opinion and secondary research for the market analysis. The experts will not be buying or using your product so their opinions must be validated by talking with real people before you finalize your commercialization strategy. In this case, the caveat might well be “seller beware.”
“Failure to do market research before you begin a business venture or during its operation is like driving a car from Texas to New York without a map or street signs,” says William Bill of Wealth Design Group LLC. “You have know which direction to travel and how fast to go. A good market research plan indicates where and who your customers are. It will also tell you when they are most likely and willing to purchase your goods or use your services.” As usual doing your homework will pave your way to success.
Michael Kurek, PhD, Partner, BBCetc
Thanks to Mike Aistrup for contributing to this post.