In search of marketing data
A primary need in starting a new food business is to gauge the market potential and research should involved all aspects related to the market.
Determining if there is a market for your food product is essential and most likely the first information you should obtain. What is the likelihood that your product will provide new attributes not currently available in the marketplace? Understanding the wants and needs of your potential customers will determine if your product is in line with their values and expectations. This foundation of the number of customers and their motivations will lead to an understanding of what your message should be and how to deliver it.
Market research information falls into two general categories; primary and secondary. Primary sources are written materials including online resources from reliable sources that can help you avoid the need for purchasing data. Purchased marketing plans can range in cost from ten to 200,000 dollars. Secondary sources are created by the business itself through conducting surveys on experience and market research just by walking around and visually inspecting the market place. This type of information will help you see who generally wants your product and if they are in line with the customers you want.
Two types of information help to form an understanding of your potential market: demographic and psychographic data. Psychographic information paints the picture of your potential customers’ needs, values and their expectations. Demographic information is available from many free sources including census data and food market maker. Census data reveals information through tract, age, educational levels, gender, household income and size and marital status, while food market maker reveals grocery outlets in each of the census tracts.
An additional research tool you may find helpful in determining market potential is sensory testing to determine if the taste is palatable and the texture is acceptable. Even the visual aspects of both the product and the packaging might lead to some adjustments that could increase demand. This can be coordinated through the MSU Product Center. While market research can help reduce uncertainties, it does not eliminate them. Informed decision-making increases the probability you will attain your marketing objectives.
A helpful acronym in the product development cycle is RAISIN. Well-constructed research, analysis of the data, developing an initiative and implementation, which should result in sales and the collection of more information that will generate the next steps.
Michigan State University Extension educators working with the MSU Product Center assist potential and existing food businesses develop market analysis.