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Which market research method for a new concept, product or service ?

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Recently I was approach by a large group in the hospitality industry which wanted to conduct a market research for a new concept they had in mind. This hospitality concept had been broadly sketched.
What the client wanted was a market research to understand whether its idea could pick up, whether demand existed on the market for this concept. We were surprized to hear what competitors had proposed.

Which market research methodology for a new concept ?

Testing a new concept is a very tricky market research exercise. When no similar concept in your country, how do you ask customers ? When no points of comparison exist, how do you survey their minds ?
In such cases respondents are very likely to be unable to answer direct questions or, even worse, to give you biased answers.

Don’t use surveys !

In the introduction we wrote we were surprised to read what our competitor had proposed : a paper-and-ink survey conducted in the streets in the neighborhood of the not-yet-existing hospitality concept. This made absolutely no sense. What are you going to survey when you :

  • have no idea of the fit between your respondents and the future clients
  • don’t even know whether future customers actually walk in the streets (what if they use only taxis to move from A to B within the city ?)
  • have no real environment for respondents to test and give their feedback

As we keep repeating to our clients, quantitative methodologies (like surveys) should be used to “quantify” whereas qualitative methodologies are suited for the “qualification” of a problem.
In this case, not knowing what to quantify, you should first proceed with a qualifying phase.

Use qualitative methods instead

The project described above requires to use exploratory technique to qualify the fit between the concept and the market demand for such a concept. It’s therefore important to use methods and techniques that enable to understand the customers’ expectations as a whole and the very concept’s value proposal.
Whereas the value proposal is likely to be expressed precisely by the firm which developed the concept, end-customers’ expectations are more complicated to approach. Out of all market research techniques we have described in our exhaustive 3-part article (part 1, part 2, part 3) we recommend using face-to-face interviews with open questions. This will allow you to understand the context as a whole and analyse the fit between unsatisfied expectations and the new value proposal. In a second step, you may want to confirm your results with a focus group (see our recommendations as far as focus groups are concerned and in particular focus groups in a retail setting).
A very interesting technique to complement such interview is to profile customers of similar concepts abroad. It’s indeed very unlikely that you’ll find no equivalent for a business concept (especially in the retail sector) abroad. As part of your market research assignment, you should therefore carefully investigate competitors abroad. Once you have identified them, why not profiling their own customers ? This will help you better target your own customers. We use an amazing Big Data-based technique to realize such analysis worldwide. If you are interested, drop us a line.

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Author: Pierre-Nicolas Schwab

Pierre-Nicolas est Docteur en Marketing et dirige l'agence d'études de marché IntoTheMinds. Ses domaines de prédilection sont le BigData l'e-commerce, le commerce de proximité, l'HoReCa et la logistique. Il est également chercheur en marketing à l'Université Libre de Bruxelles et sert de coach et formateur à plusieurs organisations et institutions publiques. Il peut être contacté par email, Linkedin ou par téléphone (+32 486 42 79 42)

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