When you are looking to launch a new product to market, it’s essential to be able to approximate the potential sales opportunity available to you and determine the size of market you can penetrate. If you can do this, it will help shape and scale the approach you take for your launch strategy and increase the chances of your product being successfully embraced by the market.
Surveys can help determine the true market size for a new product launch
While at first glance the potential addressable market for your product offering might seem to include a large volume of people, it’s important to realise that most of these individuals will not immediately adopt or accept your offering.
Therefore, if you are to estimate the true market size for your product launch, it’s imperative to identify who within your potential addressable market will actually use your product based on a problem or need that it’s able to solve for them.
Online surveys are an invaluable and efficient research tool in enabling you to achieve this, by asking questions that help determine who, how and why people in your target market might want to use your product. Consequently, this will enable you to forecast the likely impact of your new product in the market place.
Best practices to follow when determining the market size for your new product launch
While there are numerous methods you can use to determine your market size, online surveys offer the most cost-effective, convenient and direct route, by simply asking people if they are interested in your product offering.
However, there are three best practices you should always keep in mind if you’re to ensure the greatest degree of accuracy in determining your market size.
1) Quantitative data is easier to measure than qualitative data:
While qualitative data can be useful when you are trying to get a valuable insight into what people are feeling, it’s less effective when you need hard facts, such as in trying to determine a market size.
For this you’re better off using quantitative questions, which are more likely to result in data that is simpler to convert into objective, numbers-based analysis that you can more easily measure.
For example, when investigating and examining the potential market size for a new product, you will want to find out more about peoples’ preferences and behaviours. In this scenario, you may use similar questions to those below to find out more about the potential buying patterns of your target audience:
- Do you ever purchase _______?
- If yes, how often do you purchase _______?
- What is your typical budget for _______?
- Where do you go when you are looking for _______?
To help provide further analysis of your target audiences’ behaviours, preferences and emotions you may like to mix these up with Likert Scale questions. These rating style questions typically offer respondents 5 answer options ranging from Strongly Agree to Strongly Disagree, which will give you another way of measuring what your target audience is thinking. We’ve also discussed Likert Scale questions in previous pieces – most notably in our “Advantages of Using Likert Scale Questions” if you would like to explore in more detail the benefits that these questions can offer.
2) Carefully review all your questions prior to distributing your survey:
Before conducting any survey and even more so for one whose responses you will use as the basis for determining a market for a new product, it’s prudent to review all your questions. Firstly, you’ll want to ensure your overall survey is not too long, so your respondents don’t fall victim to survey fatigue. And secondly, you’ll need your questions to be worded and structured in a way that best supports the answers you are looking to get back.
For example, surveys that are created for the purpose of collecting data to help inform market size estimation are the most effective when they include demographic and population segmentation questions. This will enable you to get a clearer picture of your respondents’ gender, age, income, level of education, residency location and other key factors that are pivotal in determining your true target market size.
All these factors can have a major bearing on purchasing decisions, so you’ll need to be as clear as you can when presenting demographic and segmentation questions to your respondents.
3) Avoid leading questions:
Again, this is important for any survey, particularly when you are trying to estimate market size from your survey insights.
Leading questions are by their very nature, questions that will persuade respondents to answer in one way or another.
For example, “Would you purchase a home if it meant you could live forever?”
Since most people will be interested in living in a home that they own, and most people fear death, this question would be biased with more respondents likely to answer “yes.”
If you’re looking for more information on best practices for eliminating survey or market research bias, and how you can use logic in your survey questionnaire to limit this, you might be interested in reading our “Eliminate Survey Bias with Skip Logic” post.
More tools to help determine and validate the market for your new product launch
Depending on the online survey provider you are working with, there are more tools which can help you to identify the right target audience and demographics for your product.
One of the most effective is Consumer Panels, which allows you to buy responses to your survey’s questions from a Live Consumer Audience, drawn globally from a range of panel owners that includes publishers, media outlets and market research agencies. As the service is extremely fast, often generating responses inside an hour, it can provide an invaluable way to quickly determine and validate if there is a sizeable and profitable enough market for your new product. For more information about how to buy responses and how this can help you with your market research, why not take a look at our Consumer Panels page.
We’ve already touched on the importance of accuracy when you are trying to determine your target market. So, another tool that can help you in this process is the sample size calculator. This can help you to calculate how many responses you would need to validate your assumptions, based on the population size of your target market. To find out more about how this works and try out some test calculations for yourself, you might like to try our own Sample Size Calculator.
Creating the conditions for a smooth and successful new product launch
Launching a new product to market is a major undertaking for any business, that will always carry some level of risk. However, with the use of a survey, the right best practices to support this and a review of some of the other survey tools available, you will be much clearer about the size of market and audience you need to reach, and in a better position to deliver a successful product launch.