Marketing Planet

Market Research… or the search for a market!


This is the first of a series of articles about ImFusio’s creation from a marketing point of view. More about this series:.

Their previous article of this chronicle: Finding your business idea

Introduction

So we had it! Our own business idea. We were going to manage Japanese tourists, and help them make the most of their stay with a comfortable furnished apartment filled in with elements from Japan and France, as a “trait-d’union†between the two cultures.

It was – so we felt – a «brilliant» and, moreover, very motivating business idea. Yet, thinking on your own is not sufficient. We had to take this idea from a constraint-free environment to a competitive one. The first step for this is Market Research: our first rendez-vous with the real thing - marketing in action!

From an «business idea» to a «business deal»

We had multiple challenges: where to start from? What were we researching? Who would be our clients? Our competitors? What was the frame of our competitive field, precisely? Where to find the necessary information? How to find it? What could we expect?

It was clear: before going any further, we needed to go back to basics – the field. All these questions needed to be organized and phased. Doing everything at once was certainly not the right solution.

We split the process in 3 steps:

  1. Benchmark and competitive review: Looking for best practices in a sector or an industry, as well as identifying and classifying key competitors. It is designed to help us frame the scale of our project, what we are facing, and adapt our ambition with a (sometimes cruel) existing market situation.
  2. Customer surveys: They are meant to give us a laboratory understanding of customer behaviours faced with our concept or product. Customer feedback helps identify main pitfalls.
  3. Analysis and conclusions for action

1 - Benchmark and competitive review

Benchmarking and looking at our competitors was not as easy as we thought initially. In this phase, we did our first – and very soft – confrontation with reality. Well, it was not so good, and dimmed a little our excitement.

Starting with a search on the Web, we quickly realized two things: first of all, we were not the only ones going for this market. And secondly, we were actually quite behind!

We concentrated the review in a limited period of 30 days, using the Internet as main source of information. We found approximately 80 companies doing something that was more or less what we wanted to do. And this number was for the Paris region only, not even the entire country! We also found about half a dozen specialized in the Japanese market, with Japanese management for all of them. The fact that a non-japanese management did not exist meant that either nobody had the guts or that they all failed!

We also quickly identified the 20% top companies dominating the market. You do not need to have figures, it shows by their offering, the staff, the services, the quality of their communication tools, etc. This identification helped us understand the standards in this market.

We also classified our competitors in sub-categories, to have a better understanding of the market’s dynamics, and try to see where we fit best. We understood that key categories were: volume-based transactions, family-runned (very) small businesses and niche-market service offerings.

By being aware of the standards, we had the ability to:

  • make sure we would provide to our clients what they expected in terms of offerings and services. You have to match with market standards
  • identify innovation holes, where we could differentiate ourselves strongly

What were the learnings of this first analysis?

  • If we could not (or did not want to) go for volume, we needed to create a very qualitative, therefore Premium priced, service.
  • We decided to continue to focus on the Japanese niche market. We also realized at that point it was necessary to open our market and go for the B2B target, especially the short-term assignments. This decision is a key finding, as it has had a tremendous impact in our evolution: it has become the cornerstone of a «revolution», in the Copernican meaning. But more on this later.
  • We found room for innovation and we realized that our idea of bringing elements of their own culture was clearly a good proposition

2 - Customer surveys

Because we identified Premium Service as the right strategy, we needed to understand what our future customers were expecting.
Thanks to personal relationships (it is key: use your network to get professional tools at a very limited price), we were able to build an on-line questionnaire, in both English and Japanese, and distribute the questionnaire to all our contact lists. We received just enough responses to analyze data, with a little over 100 completed questionnaires.

To be honest, it was quite disappointing at first, given the efforts we put into it. But then, when we looked at how we considered surveys before doing our own, it’s no surprise and quite a good score actually. What’s sure is that we now respond to questionnaires, especially those coming from entrepreneurs!

We had surprises in the results, with, for examples, some very exciting ideas receiving a negative feedback from our target. This survey helped us narrow people’s expectations, filtering our ideas to keep the most relevant.

3 - Analysis and conclusion

It took us a little over 2 month’s full time to complete this work. The end-result was more than useful:

  • It helped clarify our offering
  • It helped gather quantitative and qualitative information on our market. This info was useful when talking to people or financial institutions
  • It gave us reassurance and therefore confidence in our decisions and choices
  • And it was from this analysis that our final positioning and offering started to build up.

Another important thing we learned in this market research process is that of attitude toward quantitative survey results: this process will have an effect on your initial idea. You must adapt to the results, it has very positive benefits. This period of work is ideal to challenge your initial thoughts, to stay open and to be creative and adapt subsequently. Otherwise, you are just wasting your time doing this.

You also need to keep in mind that a survey is nothing compared to launching your idea in the real world. The small bumps that you drive onto are very limited compared to what you will face later. But if you leave these bumps as they are, they will grow and eventually become a very big wall in front of you. Anything you spot or identify during your survey is gold for your future deployment.

And finally, if you need to remember one thing from this article: the key information is not in your survey, but it is rather this little thing that bothers you when you work on your project. This thing that is not truly conscious and yet already in the back of your mind. Well, keep it, don’t let it go, work on it: it is more than probable that your project will fail or will expand thanks to it.

Conclusion

Doing a Market Research (of any kind) is a key step: it’s a step forward, it’s a step into reality, it’s also a key moment to modify your project accordingly, and fit with your market as best as possible.
What you’ll get from a research can be various: understanding that your idea is not economically viable, discovering that your market is too small to survive or that you should go for the big one that initially scared you a little bit, or simply finalizing your business plan.

But overall, doing a market research is the moment when you go from idea to project, and that is a big milestone in your business development process.

Tips

  • Persevere: it takes time, it is sometimes repetitive and not exciting to benchmark competitors, but the reward is worth it.
  • Give yourself a deadline: you could spend a year looking for information and never complete your survey
  • Be curious, and «waste» time going to new directions, different fields of competition. It is helpful to broaden your perspectives in the beginning; you will always have time to narrow them.
  • Objectivity is the last and most important tip: you have to look at competitors without judgement, looking for what they do best. If you find your exact idea in one competitor’s, don’t close your eyes and use it: call them, test them, become a client, search more. You have a terrific field of investigation to find best practices and innovations.

Web sites and references

  • All our thanks (again) to Tequila Japan, who helped us run our on-line survey, using their technology: TEQUILA\ASK. You can find more details on the website of Tequila Japan.
  • French speaking readers can go to Creatests.com. They provide survey support for entrepreneurs.
  • Do not hesitate to contact Business Schools: you can find students ready to run a survey with or for you, for limited costs
  • Use Google smartly: you can register for free to «google alerts», and receive daily or weekly new sites mentioning the words you have selected.

The next article to this chronicle on ImFusio can be found right here: Entrepreneurship vs. employment: a genuine difference