Why Market Research Is Non-Negotiable
So, you’re launching your own brand. You’ve thought about it for some time now, with random bursts of inspiration coming to you at 2am on how to escape ‘the rat race’. You’re excited, positive and have watched dozens of videos on those who’ve done just that, like Gary Vaynerchuk or Tony Robbins, and feel ready.
But as the optimism flows, so does the anxiety. I’ve been there, and I can tell you, the feeling of bringing something new and innovative to the market is matched only by the fear of falling flat.
The reality is that 42 per cent of start-ups fail because they didn’t manage to confirm there was a need for that product in the market to begin with – and that’s why market research isn’t just a step in the process; it’s your safety net.
The Value of Market Research
Market research becomes your compass. It’s how you discover what your audience really wants — what makes them tick, what problems they need solved. It’s about asking the right questions: is there an actual demand for your product? Who are your true competitors? What pricing strategy will make your target audience inquisitive? Without these insights, you’re just theorising. And let’s face it: theory is risky.
Take Tropicana’s 2009 fiasco. Despite its research, Tropicana misjudged consumer sentiment with a redesign that led to a 20 per cent drop in sales in just two months. It was a 30-million-dollar mistake which drives home the point: it’s not just about gathering data; it’s about getting the interpretation right.
In my circumstance, we launched aloe vera drinks at the same time when coconut water – primarily Vita Coco – had also launched, unlocking a new, niche market with it known as ‘Functional Beverages’. As the market began to gather traction with the help of millions of dollars’ worth of marketing and product awareness, the penny dropped: customers were starting to make conscious pivots towards healthier, more organic drinks as opposed to sugar-clad alternatives.
But when we became the first company to launch the UK’s first aloe vera drink, we vastly underestimated how much groundwork would need to be done to build the Functional Beverages market to begin with. We are a small family-run business, and it was only from directly selling our drinks in shopping centres for the first two years were we able to draw one-to-one engagement with customers.
We got direct feedback on taste, packaging, pricing and NPD. But the strong start led to a very challenging period, because other companies – both small and well-funded conglomerates – cottoned on what we had created and joined the market. At the aloe vera drink market’s height, there were as many as eight companies vying for shelf space and listings.
Now, 10 years on, ‘Just Drink Aloe’ is one of the most recognisable drink brands in its segment and represents almost half of all the aloe vera drink brands in the UK and parts of Europe. We are recognised as being one of the pioneers that led to the birth and subsequent growth of the Functional Beverage and Alternative Health Soft Drinks categories.
But how? It was only after learning and implementing the habitual practice of researching the market that we were, and continue, to stay in the game. A most recent example is launching our ‘Just Drink Bubble Tea’ - the first bubble tea in a can for the convenience market. It’s a testament to our ability to adapt and evolve as the consumer base does.
Common Market Research Mistakes You Can Avoid
Trusting Your Gut Alone:
I can’t tell you how many times I’ve been tempted to trust my instincts and run with an idea I’m passionate about. Passion is crucial, but it’s not enough on its own. Remember, 42 per cent of start-ups fail because they didn’t validate the market need. Your gut might set your sails in one direction, but it’s thorough research that will get you to the finish line.
Let’s go back to the aforementioned Tropicana example. In 2009, PepsiCo decided to rebrand Tropicana with a refreshed look. It was confident the new persona is just what modern consumers would resonate with. Unfortunately, this turned out to be a very costly error, as sales nosedived by 20 per cent in just two months.
Soon after, the packaging was reverted, and Tropicana could put this disaster spell to bed. The key takeaway? Trends can be tempting, especially to try and elevate your market share, but ultimately what customers want, know and trust is what really matters.
Overlooking the Power of Niche Markets:
Another pitfall I’ve seen is the assumption that broader is better. It’s easy to think that casting a wide net will bring in more customers. but focusing on a niche can lead to stronger brand loyalty and better profits. Look at the organic food market - it’s growing at 13 per cent annually, and brands that cater to this niche have incredibly loyal customers.
I recently read a book about the ‘New Coke’ disaster of 1985, where Coca-Cola tried to appeal to a broader audience by sweetening its formula. But in doing so, it alienated its most loyal consumers, sparking a backlashed which forced the brand to bring back the traditional formula just several months later. A more recent example of this is when Coca-Cola, through stevia, launched its ‘Life’ product. It’s a classic example of why trying to please everyone often pleases no one.
How to Get Market Research Right
1. Start Early: Don’t wait until you’re about to launch. Begin your research during the development phase to ensure you’re on the right track.
2. Use Multiple Methods: Relying on just one type of research doesn’t give you the full picture. Combine surveys, focus groups and data analytics to understand your market from every angle.
3. Consider Hiring Experts: If your budget allows, bringing in professionals can be a game-changer. They can help you dig deeper and find insights you might have missed on your own.
Final Thoughts
Market research isn’t just an optional step; it’s the foundation of your product’s or success. It helps you make informed decisions, improve customer engagement, avoid costly mistakes and, ultimately, launch a product that truly resonates with your audience.
From my own experience, I can’t stress enough how important it is to invest in thorough market research. Don’t gamble with your product’s future - make sure you’re building something that the market actually wants. It’s the smartest investment you’ll ever make.
Devin Chohan
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