Tweak Your Biz » Growth » When Market Research Reveals An Ugly Truth: Breathe A Sigh Of Relief

When Market Research Reveals An Ugly Truth: Breathe A Sigh Of Relief



What do you want from market research? Ideally confirmation – of your expectations for the future development of your business.

More often than not, this is what happens. Your instinct and market knowledge has served you well: the segment does hold potential, their business idea is competitive, and the market value is significant.

Sometimes however, this isn’t the case. Here’s an example of where it all went wrong, and when the ugly truth was revealed.

The story so far

Company X was expanding its existing business to the UK market. Management had estimated ten thousand units as their market size, and all were strong potential sales for them. They built a sales and marketing strategy, and were beginning to action these, when a stakeholder recommended formal market research.

Problems revealed

We carried out a thorough market research and analysis exercise. Our conclusions when reporting back to the client were (in a nutshell):

  • Market size figures were significantly overestimated: your market size is no more than two thousand five hundred (just 25% of the original estimate of ten thousand).
  • Yes there is demand for your product in the UK marketplace: customers have expressed a strong interest in it
  • Pricing must be keen, as the economic recession has focused customers on looking for the most cost effective services.

Quick thinking and innovation

While the bad news about their market size estimates was indeed that – very bad news – the company re-adjusted its plans accordingly. The initial shock and dismay quickly turned to positive thinking about how close they’d come to a really bad decision.

This company took on board the realities that market research revealed, and acted quickly. They were nimble and innovative enough to get back to basics, create an alternative business model for their company and change direction.

So what seemed like a disaster when they read our research quickly turned into a new opportunity. And what could have been a disaster was averted through research.

What do you expect from market research? Have you ever started a business with unrealistic expectations of your market or are you an effective market research user?



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The Author:

Revealing opportunities, pitfalls and the true value of the market a business is entering, Roisin uses research to helping companies to successfully grow and expand their business. Roisin's work is backed up with 15 years' experience in desk based market research for business of all shapes and sizes, from start ups to blue chips. http://www.knowledgeworks.ie

Add Your Comment

  • http://twitter.com/fredchannel Fred

    Good post Roisin. Welcome to Bloggertone!
    I guess that’s ideally what should happen: the data provides X result that we must learn from and take action, even if that means taking a different direction. It would be worse, being reactive and making that move in the middle of the storm.
    I wonder how many people actually do market research just to prove that they are right and they end up convincing themselves regardless of the results…

  • http://www.btbtraining.com/blog Niall Devitt

    Hi Roisin, welcome to Bloggertone! Asking the right questions can sometimes prove a difficult bit, , I think questions can sometimes be loaded rather than open.

  • http://www.knowledgeworks.ie Roisin Bell

    Hi Fred

    I think most people do heed the results of the research they commission. The danger is when people have a suspicion that all may not be right, and as a result, decide not to commission the research. It’s a little like Seth Godin’s ‘Lizard brain’ theory.

    Thanks for your comment!

    Roisin.

  • Roisin Bell

    You’re right Niall – asking the right research questions is absolutely vital. One of the reasons to leave it to the professionals – they’re used to getting the most out of the process. Questions with Yes/No answers (or as you say ‘loaded’ questions) can be a waste of time – or worse: can lead to misleading results.

    Thanks for your comment!

    Roisin.

  • Anonymous

    Thanks for that Roisin. Research is overlooked far too often, I think particularly with start-ups (not all, some) that people are so in love with their idea that they can be blinded to any negative feedback.

    Agree too about loaded questions, and that’s often the trouble when companies do their own research….

  • http://www.seefincoaching.com/blog Elaine Rogers

    What do you expect from market research?

    A Reality check ;)

  • http://www.tweakyourbiz.com Niall Devitt

    Thanks Ben, glad you liked them :)

  • Anonymous

    Niall,nnThank you for including my webinar! I deeply appreciate your generosity!

  • Liran Hirschkorn

    Thanks for the warm welcome! Appreciate the nice comments. Key man is important, business owners need to wear many hats and protecting their business is extremely important.

  • http://www.leadsandappointments.com/ Anika Davis

    Another excellent write ups on business and life insurance. Life insurance is one of most important insurance in the business industry. And this life insurance policy has the power to change the course of the lives of the people you care about and the business you help to build.

  • Liran Hirschkorn

    Agreed!